Document:

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

EXECUTIVE EMPLOYMENT
AND SEVERANCE AGREEMENT 

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

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

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

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

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

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

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

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

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

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

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

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

2 

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

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

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

3 

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

For purposes of this
Section 2(e): 

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

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

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

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

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

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

4 

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

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

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

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

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

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

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

5 

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

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

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

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

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

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

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

6 

        3.    Employment
of Executive 

	 	        (a)    Position. 

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

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

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

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

7 

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

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

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

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

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

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

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

8 

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

        5.    Payments
upon Termination.  

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

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

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

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

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

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

9 

	 	        (i)                   Company
shall pay Executive the Severance Payment in a lump sum within ten (10)
               days following the Executive’s Separation from Service, or if later,
the                date on which the General Release is no longer revocable, or if later,
the date                on which the amount payable under Section 6 is determined, but in
no event may                be payment be made more than 21⁄2 months after the year
in which                Executive’s Separation from Service occurs;  

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

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

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

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

10 

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

        7.    Covenants
by Executive. 

11 

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

	 	        (b)    Non-Competition/Non-Solicitation.  

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

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

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

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

12 

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

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

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

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

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

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

13 

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

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

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

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

14 

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

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

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

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

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

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

15 

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

EXECUTIVE 

/s/ Erik Birkerts 
Signature 

Erik Birkerts  
Printed Name 

February 21, 2008  
Date 

________________________________
Address 

ORION ENERGY SYSTEMS,
INC. 

By: /s/ Neal R. Verfuerth 

Name: Neal R. Verfuerth 

Title: President and
Chief Executive Officer 

16efc8-0363_6544259ex101.htm

    Exhibit 10.1

     

    EXECUTION
COPY

    

     

    AGREEMENT

     

    

    THIS
AGREEMENT (this “Agreement”), dated as
of February 21, 2008, between BROADPOINT SECURITIES GROUP, INC. (f/k/a First
Albany Companies Inc.), a New York corporation (the “Company”), and
MATLINPATTERSON FA ACQUISITION LLC, a Delaware limited liability company (the
“Investor”),

     

    WITNESSETH:

     

    WHEREAS,
the Company and the Investor are parties to that certain Investment Agreement
dated as of May 14, 2007 (the “Investment
Agreement”, with capitalized terms used and not otherwise defined in this
Agreement that are defined in the Investment Agreement being used herein with
the meanings set forth therein) providing for the sale and issuance by the
Company to the Investor and certain Co-Investors, and the purchase by the
Investor and such Co-Investors of certain shares of the Company’s Common Stock
(the “Purchased
Shares”, as more fully defined in the Investment Agreement);

     

    WHEREAS,
Section 2.1(b)(ii) of the Investment Agreement provides that the number of
Purchased Shares issued to the Investor and the Co-Investors will be increased
in accordance with a prescribed formula in the event that the Final Net Tangible
Book Value Per Share is less than $1.60 (the “NTBV Purchase Price
Adjustment”);

     

    WHEREAS,
the parties have arrived at a mutual determination of the Final Net Tangible
Book Value Per Share and the number of Purchased Shares to be issued to the
Investor and the Co-Investors, as set forth below;

     

    NOW,
THEREFORE, in consideration of these premises and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:

     

    1.  The
Final Net Tangible Book Value Per Share for the purpose of the NTBV Purchase
Price Adjustment is $1.25.

     

    2.  The
total number of additional Purchased Shares agreed to be issued by the Company
based on this Agreement and the NTBV Purchase Price Adjustment calculation is
3,632,009, of which 3,589,878 shares are allocated to the Investor and 42,131
shares are allocated to the Co-Investors (with 9,443 shares being allocated to
Robert M. Fine and 32,688 shares being allocated to Robert M.
Tirschwell).  Such additional Purchased Shares shall be issued by the
Company to the Investor and the Co-Investors promptly following the execution
and delivery of this Agreement.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, the Company and the Investor have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above-written.

     

    

                BROADPOINT SECURITIES
GROUP, INC

    

    

    

                By: /s/ Lee
Fensterstock                      
                  

                Name: Lee
Fensterstock

                Title:  Chief
Executive Officer and Chairman

    

    

                MATLINPATTERSON FA
ACQUISITION LLC

    

    

    

                By: /s/ Larry M.
Teitelbaum                                         

                Name: Larry M.
Teitelbaum

                Title: President and
Treasurer

    

     

    ACKNOWLEDGED
AND AGREED TO BY

    EACH OF
THE CO-INVESTORS:

     

    

    

    /s/ Robert
Tirschwell                                              

    Robert Tirschwell

    

    

    

    /s/ Robert M.
Fine                                                  

    Robert M. Fine

    

     

     

     

    2

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