Document:

exv10w1

EXHIBIT 10.1

SIDNEY HINTON

SECOND AMENDED AND RESTATED

EMPLOYMENT AND NON-COMPETITION AGREEMENT

 

 

SECOND
AMENDED AND RESTATED

EMPLOYMENT AND NON-COMPETITION AGREEMENT

     This
 SECOND AMENDED AND RESTATED EMPLOYMENT AND NON-COMPETITION AGREEMENT (this “Agreement”) is made
and entered into as of December 17, 2009 by and between PowerSecure International, Inc., a Delaware
corporation (the “Company”), and Sidney Hinton, an individual who resides in Wake Forest, North
Carolina (“Officer”).

Recitals

     WHEREAS, Officer is the President and Chief Executive Officer of the Company and of
PowerSecure, Inc. (“PowerSecure”), a Delaware corporation and wholly-owned subsidiary of the
Company; and

     WHEREAS, the Company and Officer had previously entered into an Employment and Non-Competition
Agreement, dated as of August 15, 2007, as amended and restated as of December 31, 2008, which set
forth the terms and conditions of Officer’s employment with the Company; and

     WHEREAS, the Company and Officer desire to amend certain terms and conditions of this
Agreement in order to extend the term of Officer’s employment and to modify certain other terms and
conditions of his employment and compensation hereunder; and

     WHEREAS, the continued involvement and leadership of Officer in the business and affairs of
the Company and its subsidiaries, including PowerSecure, is vital to the success of the Company and
its subsidiaries; and

     WHEREAS, the Company desires to continue to employ Officer, and Officer desires to continue to
serve the Company, upon the terms and subject to the conditions set forth herein;

Agreement

     NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements
set forth herein, and of other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Company and Officer, intending to be legally bound hereby, agree
as follows:

     Section 1. Employment. The Company hereby agrees to continue to employ Officer, and
Officer hereby agrees to continue to serve as an employee of the Company, upon the terms and
subject to the conditions set forth herein.

     Section 2. Term. The term of Officer’s employment hereunder shall continue until and
expire on December 31, 2015, unless earlier terminated in accordance with the provisions of Section
5. In the event that this Agreement has not been earlier terminated in accordance with the
provisions of Section 5, the term of Officer’s employment hereunder shall be automatically extended
without further action by the Company or Officer for additional successive one-year periods unless
either party, for any reason or no reason, shall have given written notice of termination to the
other party no less than 90 days prior to the commencement of any one-year extension period. The
term of

 

 

Officer’s employment hereunder, including any extension period, is sometimes hereinafter referred
to as the “Employment Term.”

     Section 3. Duties of Officer.

          (a) General Duties and Responsibilities. During and throughout the Employment Term,
Officer shall faithfully and diligently, to the best of his ability, serve as the President and
Chief Executive Officer and a member of the Board of Directors of the Company and of PowerSecure,
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.
Officer 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.
Officer shall use his best efforts to promote the best interests of the Company. Officer shall
always be subject to the direction, approval and control of the Board in the performance of his
duties. Officer 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.

          (b) Performance of Services. During and throughout the Employment Term, Officer shall
devote his full time, attention, skill, ability and energy during normal business hours (and
outside such hours when reasonably necessary to perform Officer’s duties hereunder) exclusively to
the business and affairs of the Company and the performance of his duties under this Agreement.
Officer shall not, directly or indirectly, render any services of a business, commercial or
professional nature to any Person without the prior written consent of the Board; provided,
however, that the provisions this Section 3(b) shall not preclude Officer from devoting time,
ability, energy and attention outside normal business hours throughout the Employment Term to
reasonable participation in community, civic, charitable or similar organizations, or the pursuit
of personal legal and financial affairs which do not interfere or conflict with the performance of
Officer’s duties hereunder and are not adverse to the business or best interests of the Company.

          (c) Place of Employment. Officer shall perform his services hereunder at the Company’s
principal executive offices in Wake Forest, North Carolina or at such other location as mutually
agreed with the Board; provided, however, that Officer agrees to undertake all reasonable travel
required by the Company to be conducted in connection with the business of the Company and the
performance of Officer’s duties hereunder.

     Section 4. Compensation. During and throughout the Employment Term, as
compensation for the services performed and other covenants made by Officer to the Company
hereunder, the Company shall pay and provide or cause to be provided to Officer the following:

          (a) Base Salary. The Company shall pay Officer a base salary equal to $550,000 per
year (the “Base Salary”), commencing January 1, 2010, payable in approximately equal installments
in accordance with the Company’s customary payroll practices. Officer’s Base Salary shall be
reviewed by or under the authority of the Compensation Committee of the

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Board (the “Compensation Committee”) no less frequently than annually and may be increased (but
never decreased) in the sole discretion of the Board or the Compensation Committee (although
neither the Board nor the Compensation Committee has any obligation to do so) based upon whatever
factors the Board or the Compensation Committee deems appropriate including, but not limited to,
Officer’s individual performance, the overall performance, profitability and prospects of the
Company and prevailing economic and industry factors.

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

               (i) Annual Incentive Bonus. Officer shall participate in and be entitled to receive a
bonus (the “Annual Incentive Bonus”) under an Annual Incentive Plan for each fiscal year of the
Company during the Employment Term, in an amount, based on the factors and metrics and on the terms
and conditions annually established by the Compensation Committee, provided that the target for
each Annual Incentive Bonus shall be in an amount equal to no less than 100% of Officer’s Base
Salary at the time the Annual Incentive Plan is established for each fiscal year of the Company.

               (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.

          (c) Restricted Stock Grant. The Company has granted to Officer an award of
Restricted Shares (as defined below) under the Company’s 1998 Stock Incentive Plan, as amended and
restated from time to time, upon the following terms and conditions. The award consists of 600,000
shares of Common Stock, par value $.01 per share, of the Company (the “Restricted Shares”) that are
subject to the terms and conditions of a Restricted Stock Agreement approved by the Compensation
Committee of the Board of Directors of the Company, consistent with the terms and conditions of the
grant as set forth in this Agreement. The Restricted Shares shall vest in accordance with the
following vesting schedule: (i) 300,000 Restricted Shares shall vest on August 8, 2012, provided
Officer has been employed continuously with the Company from the date hereof through such vesting
date (the “Service Restricted Shares”); and (ii) 300,000 Restricted Shares shall vest in five equal
annual installments for fiscal years 2007 through 2011 only if the Company achieves the “Restricted
Share Performance Goal” for each such fiscal year (the “Performance Restricted Shares”). The
Restricted Share Performance Goal for each fiscal year shall be as set forth in that certain
Restricted Stock Agreement, dated as of August 15, 2007, as amended and restated on the date
hereof. In the event of a Change in Control of the Company (as defined below), any unvested
Restricted Shares (regardless of whether they are Service Restricted Shares or Performance
Restricted Shares) shall immediately vest in full upon the effective date of the Change in Control.

          (d) Vehicle. The Company shall provide to Officer a Company-owned or leased vehicle
suitable and appropriate for Officer to perform his duties hereunder, and Officer shall be
permitted to use such vehicle for personal use so long as it is not used for any purpose that
violates applicable law or is detrimental to the Company. In lieu of the foregoing, but only

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with the consent of Officer, the Company may pay an automobile allowance to Officer in an amount
sufficient to meet its obligations in this Section 4(c).

          (e) Club Membership. The Company shall pay or reimburse Officer for one country club
membership, including initiation fees and annual membership fees and dues, at a club selected by
Officer.

          (f) Annuity. The Company will purchase an annuity payable to Officer upon the terms
set forth herein (the “Annuity”). Under the Annuity, upon the terms and conditions set forth
herein, Officer shall receive, commencing when Officer reaches the age of 53 and continuing until
his death, monthly payments (“Monthly Annuity Payments”) in an amount equal to the product of (x)
$1,500 (the “Base Amount”), multiplied by (y) the total number of years Officer served as an
employee of the Company and its subsidiaries (it being acknowledged that Officer commenced serving
as an employee on May 8, 2000) as of the time his employment with the Company is terminated;
provided, however, that (i) the amount of the Monthly Annuity Payments shall not exceed $20,000 per
month regardless of the number of years of Officer’s service, and (ii) Officer may, at his election
at least five (5) years in advance and in accordance with any other applicable requirements of
Section 409A, commence receiving the Monthly Annuity Payments when he reaches the ages of 54, 55,
56, 57 or 58, and the Base Amount to be used in computing the amount of the Monthly Annuity
Payments shall be increased by $100 for each year of age Officer is above the age of 53 when he
commences receiving such payments (provided such Monthly Annuity Payments shall not in any event
exceed $20,000 per month). Officer shall have the right to receive the Monthly Annuity Payments
only if two conditions are satisfied: (i) Officer shall have continued to remain employed with the
Company though the earlier of (A) August 8, 2012, (B) the effective date of a Change in Control (as
defined below) of the Company, or (C) Officer’s employment is terminated by the Company without
Cause (as defined below); and (ii) Officer’s employment with the Company has terminated before he
commences receiving the Monthly Annuity Payments; provided that if either of events (B) or (C)
occurs, the amount of the Monthly Annuity Payments shall be computed as if Officer had remained
employed with the Company through August 8, 2012. The Company will use its commercially reasonable
best efforts to fund the Annuity through a third party provider such as an insurance company or
similar financial institution, provided that the Company and Officer agree to reasonably cooperate
in agreeing to the design, funding, terms and conditions of such plan.

          (g) Employee Benefit Plans. Officer shall be entitled to participate in all pension,
401(k), retirement, life, disability and health insurance, hospitalization, major medical and other
the employee benefit plans and arrangements, if any (as in effect and as amended from time to
time), to the extent that his position, tenure, salary, age, health and other qualifications make
his eligible to participate, generally made available by the Company to comparable level employees,
subject to and on a basis consistent with the terms, rules and regulations, conditions and overall
administration of such plans and arrangements. Notwithstanding the foregoing sentence, the Company
may discontinue at any time any such employee benefit plan or arrangement, to the extent permitted
by the terms of such plans or arrangements, and shall not be required to compensate Officer for the
elimination of any such employee benefit plans or arrangements.

          (h) Expenses. The Company shall, upon presentment by Officer of appropriate receipts
and vouchers therefor, reimburse Officer for all reasonable, ordinary and

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necessary out-of-pocket business expenses incurred by Officer in connection with the performance of
his duties under this Agreement, provided that such expenses are incurred and accounted for in
accordance with and subject to the normal policies and procedures of the Company.

          (i) Vacation. Officer shall be entitled to reasonable paid vacation time in accordance
with the policies of the Company applicable to executive officers of the Company.

          (j) Contract Amendment Payment. In consideration for Officer amending the terms of
his severance arrangements under Sections 5(e)(ii) and 5(f), the Company shall pay to Officer the
sum of $550,000 after January 1, 2010, which amount shall have no effect on Officer’s Annual
Incentive Plan for the Company’s 2010 fiscal year.

     Section 5. Termination of Employment. Notwithstanding the provisions of Section 2,
the Employment Term and Officer’s employment hereunder shall terminate as follows:

          (a) Death. Officer’s employment hereunder shall automatically terminate upon his
death, and the Company shall pay to his designated beneficiaries (or, if none, to his estate) the
pro rata portion of his Base Salary and all other accrued and vested but unpaid compensation
through the date of his death. In addition, the Company shall pay for and provide for the benefit
of Officer and his beneficiaries a term life insurance policy in the amount of $5,000,000 on the
life of Officer, and Officer shall have the unilateral right to name the beneficiaries of such life
insurance policy.

          (b) Disability. The Company shall have the right, in its sole discretion, to
terminate Officer’s employment hereunder in the event of Officer’s Disability (as defined below)
upon giving at least 30 days written notice to Officer of its intention to terminate Officer’s
employment. In such event, the Company shall pay to Officer the pro rata portion of his Base
Salary and all other accrued and vested but unpaid compensation through the date of termination.
In addition, the Company shall pay for and provide for the benefit of Officer a disability
insurance policy that provides for payment benefits to Officer in an amount equal to no less than
60% of his Base Salary. Upon termination by the Company in the event of Officer’s Disability,
Officer shall be entitled to receive the following: (i) the accrued but unpaid portion of his Base
Salary and any bonuses and other compensation that are earned, accrued or vested but unpaid through
the date of termination; (ii) an amount equal to one-third of the full Severance Amount, computed
and payable as provided in Section 5(j), except that the average of the Annual Incentive Bonus
shall be computed based only on the three fiscal years preceding the fiscal year in which Officer’s
employment is terminated, and the severance shall be payable in approximately equal installments in
accordance with the Company’s customary payroll practices over the 12 months following the
termination of Officer’s employment; (iii) in the event such termination of employment occurs after
August 8, 2012, then Officer shall be entitled to the Annuity and to receive the Monthly Annuity
Payments as provided in Section 4(f); (iv) for a period of three years from the date of
termination, the Company shall pay for, or otherwise provide for at Company expense, the
continuation of the same (if available, and to the extent not available similar) life, accidental
death, disability, medical, dental and other insurance plans and benefits in which Officer and his
family participated prior to such termination; and (v) any other rights and benefits of any of the
employee benefits earned, accrued or vested (including under any plans in which he was
participating) as of the date of such termination, subject to the terms

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and conditions of such plans and benefits, but Officer shall not attain vested status in any plans
or benefits in which he is not vested on the date of termination. For purposes of this Agreement,
“Disability” shall have the meaning given to such term under Section 409A in Treas. Reg. Section
1.409A-3(i)(4).

          (c) By the Company for Cause. The Company shall have the right, in its sole
discretion, to terminate Officer’s employment hereunder at any time for Cause (as defined below)
immediately upon giving written notice of termination to Officer. Upon his termination for Cause,
Officer shall be entitled to receive only the accrued but unpaid portion of his Base Salary through
the date of termination, plus any accrued and vested but unpaid bonuses and other compensation as
of such date, but Officer shall not be entitled to any other bonus or incentive compensation for
the fiscal year in which he was terminated. In addition, any unvested portion of any option to
purchase shares of Common Stock, and any unvested portion of the Restricted Shares, shall expire
without vesting. Officer shall have no right to receive any other or further compensation or
benefits. For purposes of this Agreement, “Cause” means only the following:

               (i) The failure or refusal by Officer to perform any of his material duties hereunder, or
the breach by Officer of any of his obligations, covenants, representations, warranties or
acknowledgments hereunder, which failure, refusal or breach is confirmed by a resolution adopted by
the Board and that remains unremedied or uncured for a period of 30 consecutive days after specific
written notice thereof is given to Officer by on or behalf of the Board;

               (ii) Any act of dishonesty, fraud, breach of fiduciary duty or bad faith by Officer that is
materially detrimental to the Company or that results in substantial personal enrichment of
Officer; or

               (iii) The conviction of Officer, or the entering of a guilty plea or a plea of no contest by
Officer with respect to (A) a felony, or (B) a misdemeanor that involves theft, fraud or
dishonesty, results in Officer’s imprisonment or materially impairs Officer’s ability to perform
his duties hereunder or materially damages the reputation or business of the Company.

          (d) By the Company Without Cause. The Company shall have the right, in its sole
discretion, to terminate Officer’s employment hereunder at any time, without Cause, which
termination shall be effective upon the giving of written notice of such termination to Officer (or
at such later date as the notice provides). In such event, Officer shall be entitled to receive
the following: (i) all amounts of the Base Salary and any bonuses and other earned but unpaid
compensation that are earned, accrued or vested but unpaid through the date of termination; (ii) an
amount equal to the Severance Amount, computed and payable as provided in Section 5(j); (iii) any
unvested portion of the Restricted Shares shall vest as follows: (A) the Service Restricted Shares,
if then unvested, shall immediately vest, and (B) the unvested Performance Restricted Shares
applicable for the fiscal year in which the termination occurs shall vest in the event the Company
attains the applicable Performance Goal for that fiscal year; (iv) for a period of three years from
the date of termination, the Company shall pay for, or otherwise provide for at Company expense,
the continuation of the same (if available, and to the extent not available similar) life,
accidental death, disability, medical, dental and other insurance plans and benefits in which
Officer and his family participated prior to such termination; and (v) any rights and benefits of
any of the employee benefits earned, accrued or vested (including under any plans in which he was
participating) as of the date of such termination, subject to the terms and conditions of such
plans

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and benefits, but Officer shall not attain vested status in any plans or benefits in which he is
not vested on the date of termination.

          (e) By Officer.

               (i) With Good Reason. Officer shall have the right, in his sole discretion, to
terminate his employment hereunder for Good Reason (as defined below) at any time effective upon
the giving of at least 60 days written notice of termination to the Company. Upon such termination
for Good Reason by Officer, Officer shall be entitled to receive the same compensation, payments
and benefits as if the Company had terminated the employment of Officer without Cause, as provided
in Section 5(d). In addition, in the event such termination of employment occurs after August 8,
2012, then Officer shall be entitled to the Annuity and to receive the Monthly Annuity Payments as
provided in Section 4(f). For purposes of this Agreement, “Good Reason” shall have the meaning
given to such term under Section 409A in Treas. Reg. Section 1.409A-1(n)(2).

               (ii) Without Good Reason. Officer agrees not to voluntarily terminate his employment
hereunder, without Good Reason, except by giving at least 60 days written notice to the Company.
Upon such voluntary termination by Officer, Officer shall be entitled to receive the following: (i)
the accrued but unpaid portion of his Base Salary and any bonuses and other compensation that are
earned, accrued or vested but unpaid through the date of termination; (ii) in the event such
termination of employment occurs after August 8, 2012, then Officer shall be entitled to the
Annuity and to receive the Monthly Annuity Payments as provided in Section 4(f); and (iii) any
rights and benefits of any of the employee benefits earned, accrued or vested (including under any
plans in which he was participating) as of the date of such termination, subject to the terms and
conditions of such plans and benefits, but Officer shall not attain vested status in any plans or
benefits in which he is not vested on the date of termination. In exchange for the receipt of the
foregoing consideration, Officer agrees to be subject to the covenants set forth in Section 6,
including but not limited to the covenant not to compete, during the Employment Term and for one
year thereafter.

          (f) Compensation Upon Termination of Employment Following a Change in Control.

               (i) Amount of Compensation. If, during the Employment Term, a Change in Control (as
defined below) of the Company occurs, and within three years after such date the Company shall
terminate Officer’s employment without Cause or the employment of Officer shall be terminated by
Officer for Good Reason, then:

(A) The Company shall pay to Officer in a lump sum in cash within 30 days after the
date of termination the aggregate of the following amounts:

(I) To the extent not theretofore paid, the Base Salary through the date of
termination at the rate in effect on the date the notice of termination was
given along with any earned but unpaid bonuses or other compensation; and

(II) the Severance Amount; and

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(III) In the case of compensation previously deferred by Officer, all amounts
of such compensation previously deferred and not yet paid by the Company; and

(B) The Company shall, promptly upon submission by Officer of supporting
documentation, pay or reimburse to Officer all costs and expenses paid or incurred
by Officer prior to the date of termination which would have been payable under this
Agreement if Officer’s employment had not terminated; and

(C) For a period of three years from the date of termination, Officer and his family
shall be permitted to continue to participate in all life, accidental death,
disability, medical, dental and other insurance plans of the Company. If, despite
the provisions of this Section 5(f), benefits shall not be available under any of
such plans because Officer is no longer an employee of the Company, then the Company
itself shall, to the extent necessary, pay or provide for payment of similar
benefits to Officer and/or Officer’s family.

               (ii) Definition of Change in Control. For the purpose of this Agreement, a “Change
in Control” shall have the meaning given to such term under Section 409A in Treas. Reg. Section
1.409A-3(i)(5).

          (g) Expiration of Employment Term. In the event of the expiration of the Employment
Term (including any renewal or extension period hereunder) without further renewal or extension,
Officer shall be entitled to receive (i) all amounts of the Base Salary and any bonuses and other
compensation earned, accrued or vested but unpaid through the date of expiration; (ii) an amount
equal to one-third of the full Severance Amount, computed and payable as provided in Section 5(j),
except that the average of the Annual Incentive Bonus shall be computed based only on the three
fiscal years preceding the fiscal year in which Officer’s employment is terminated, and the
severance shall be payable in approximately equal installments in accordance with the Company’s
customary payroll practices over the 12 months following the termination of Officer’s employment;
(iii) the Annuity and the Monthly Annuity Payments as provided in Section 4(f); and (iv) any rights
and benefits of any of the employee benefits earned, accrued or vested (including under any plans
in which he was participating) as of the date of such termination, subject to the terms and
conditions of such plans and benefits, but Officer shall not attain vested status in any plans or
benefits in which he is not vested on the date of termination.

          (h) No Further Obligation to Officer. The payments and benefits (if any) required to
be made or provided to Officer pursuant to this Section 5 shall be in full and complete
satisfaction of, and shall constitute the full settlement and release of the Company by Officer
with regard to, all obligations of the Company owed to Officer pursuant to this Agreement. After
the date of termination of Officer’s employment hereunder, the Company shall have no further
obligations to Officer under this Agreement except as otherwise set forth herein.

          (i) Survival of Officer’s Obligations. Notwithstanding the termination of this
Agreement by either party hereto for any reason, the obligations of Officer under Section 6 and the
other provisions thereof shall survive the termination or expiration of this Agreement or Officer’s
employment hereunder and shall remain in full force and effect for the period provided

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therein.

          (j) Computation and Payment of Severance Amount. For purposes of this Agreement, the
term “Severance Amount” shall mean an amount equal to three times the sum of the following: (I) the
“Base Salary Component,” which shall be equal to the highest Base Salary of Officer during the
Employment Term, plus (II) the “Bonus Component,” which shall be equal to the average of the Annual
Incentive Bonus awarded to Officer for the two fiscal years of the Company immediately preceding
the fiscal year in which Officer’s employment is terminated and of the Annual Incentive Bonus that
would have been awarded to Officer (if his employment had not terminated) for the fiscal year in
which his employment is terminated based on the formula set forth in Section 4(b), or, if greater,
for the three fiscal years preceding the fiscal year in which his employment is terminated;
provided that in any event, regardless of the formula set forth in Section 4(b), the Bonus
Component shall be no less than one time the Base Salary Component and no more than two times the
Base Salary Component. The Severance Amount shall be payable in approximately equal installments
in accordance with the Company’s customary payroll practices over the 36 months following the
termination of Officer’s employment hereunder.

          (k) Release of Claims. Upon termination of Officer’s employment for any reason, other
than by the Company for Cause, Officer agrees to execute a release of all claims against the
Company and its subsidiaries, affiliates, directors, officers, employees, stockholders, agents an
representatives, substantially in the same form as standard releases used by the Company in
employee terminations, and the Company agrees to execute a similar mutual release of all claims
against Officer.

          (l) Six Month Deferral of Payments. Notwithstanding any other provision of this
Agreement to the contrary, in the event that Officer is deemed to be a Specified Employee (as
defined below), then no Severance Payments or any other amounts payable hereunder upon or after
termination of Officer’s employment shall be paid to Officer until six months and one day after the
date of termination of his employment (the “First Distribution Date”), provided that on the First
Distribution Date, the Company shall pay to Officer all amounts that, but for this Section 5(l),
would have been paid to Officer hereunder, including but not limited to Severance Payments. For
the purpose of this Agreement, the term “Specified Employee” shall have the meaning given to such
term under Section 409A in Treas. Reg. Section 1.409A-1(i).

     Section 6. Covenants. In consideration in part for the compensation to be paid to
Officer hereunder by the Company, and in order to induce the Company to enter into this Agreement,
Officer hereby makes the following covenants to the Company:

          (a) Covenant Not to Compete. During the Employment Term and for a period of the
lesser of (x) three years thereafter, if Officer’s employment is terminated by the Company for any
reason other than for Cause or by Officer for Good Reason or if the Employment Term expires without
being renewed, or (y) no years thereafter, if Officer’s employment is terminated by Officer without
Good Reason and Officer is not entitled to and does not receive any portion of the Severance Amount
(the “Restricted Period”), Officer shall not, directly or indirectly, alone or in association with
others, whether as owner, shareholder, employee, Officer, director, partner, manager, member,
lender, investor, consultant, principal, agent, independent contractor, co-venturer or in any other
capacity, invest in, engage in, have a financial interest in, be in any other way connected or
affiliated with, or render advice or services to, any Person that is in competition with

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the Company in the United States or in any other country in which the Company does a material
amount of business or otherwise has material operations.

               (i) Competition with the Company. For purposes of this Agreement, (A) the phrase “in
competition with the Company” shall be deemed to include competition with the Company and its
subsidiaries and Affiliates, or their respective successors or assigns, or the businesses of any of
them, and (B) a business shall be deemed to be in competition with the Company if it is engaged in
any business activity or has products or services that are the same or similar to the business
activities, products or services of the Company during the Employment Term. Notwithstanding the
foregoing, nothing herein contained shall prevent Officer from acquiring and holding for investment
up to five percent (5%) of any class of securities of any corporation, if such securities are
listed or traded on a national securities exchange or the Nasdaq Stock Market or in the
over-the-counter market.

               (ii) Interpretation of Covenant. The parties hereto acknowledge and agree that the
duration and area for which the covenant not to compete set forth in this Section 6(a) is to be
effective are fair and reasonable and are reasonably necessary for the protection of the Company
and its business and good will, and Officer hereby waives any objections to or defenses in respect
thereof. In the event that any court determines that any portion of the time period or the area,
or both of them, are unreasonable, arbitrary or against public policy, and that such covenant is to
such extent unenforceable, illegal or invalid, the parties hereto agree that this Section 6(a)
shall be deemed amended to delete therefrom such provisions or portions adjudicated to be
unenforceable, illegal or invalid so that the covenant shall remain in full force and effect for
the greatest time period and in the greatest geographical area that would render it enforceable,
legal and valid. The parties intend that the covenant set forth in this Section 6(a) shall be
deemed to be a series of separate covenants, one for each and every county of each and every state
of the United States of America and one for each and every political subdivision of each and every
other country where the covenant is intended to be effective and is not proscribed by law.

          (b) Covenant Regarding Disclosure or Use of Confidential Information.

               (i) Officer acknowledges that during the Employment Term and as a result of his employment by
the Company, he has and will continue to learn, obtain and have access to confidential and
proprietary information regarding the business and affairs of the Company and its Affiliates.
Officer hereby agrees that at all times during and after the Employment Term he shall keep strictly
confidential and hold in confidence all Confidential Information (as defined below), and shall not,
directly or indirectly, use any Confidential Information for Officer’s own benefit or for the
benefit of any other Person or divulge, disclose, communicate or otherwise reveal any Confidential
Information to any Person in any manner whatsoever, other than to the directors, employees and
agents of the Company, and then only in the course of the Company’s affairs to the extent necessary
for them to perform services to and responsibilities on behalf of the Company.

               (ii) As used herein, “Confidential Information” means any and all information, however
documented, which is confidential property or otherwise non-public, related to the business and
affairs of the Company and its Affiliates, including, but not limited to, their assets, properties,
operations, finances, practices, procedures, policies, methods, contracts, agreements and
arrangements, lending policies, pricing policies, price lists, financial plans, business plans,
financial information, financial projections, budgets, marketing strategies and techniques; the
identity and

10

 

location of all past, present and prospective customers, suppliers, affiliates, debtors, creditors,
lenders, employees, consultants, advisors, agents, distributors, wholesalers, clients and others
who have dealings with the Company; trade secrets, processes, photographs, graphics, product
specifications, formulas, compositions, samples, inventions, ideas, research and development;
patents, patent applications; copyrights and copyright applications (in any such case, whether
registered or to be registered in the United States or any foreign country) applied for, issued to
or owned by the Company; any and all processes, computer programs and software (including object
code and source codes, database, technologies, engineering or technical data, drawings, sketches or
designs, manufacturing or distribution methods or techniques; and any other information known to
Officer to be confidential, proprietary, secret or otherwise non-public information.

               (iii) Officer hereby acknowledges and agrees that, as between the Company and Officer, all of
the Confidential Information, however documented, whether or not developed, created or modified by
Officer, is the exclusive property of the Company.

               (iv) Upon the termination or expiration of the Employment Term, Officer shall leave with or
return to the Company, without making or retaining any copies, or other records of, all
Confidential Information including all copies, summaries, abstracts thereof and all memoranda,
notes, records, reports, books, letters, customer lists, manuals and other writings or documents
whatsoever pertaining thereto. Notwithstanding the foregoing, as used herein Confidential
Information does not mean or include any information that is generally available to the public
other than as a result of a direct or indirect disclosure by Officer.

          (c) Covenants Regarding Business Relationships. Officer agrees that during and
throughout the Employment Term and the Restricted Period, except when acting on behalf of the
Company, he shall not, directly or indirectly, (i) employ, solicit, induce, engage or cause any
director, officer, employee, independent contractor, consultant, salesman or other agent of the
Company (whether now or hereafter engaged by the Company) to (A) terminate his employment or
engagement with the Company, (B) accept employment or engagement or otherwise render services to
any other Person or business (wherever located, and regardless of type of business conducted), or
(C) interfere with the business of the Company; or (ii) solicit any clients or customers of the
Company or interfere in any business relationship between the Company and any other Person,
including any Person who was at any time an employee, consultant, contractor, advisor, supplier,
lender or customer of the Company. Officer shall not, at any time during or after the Employment
Term, disparage the business reputation of the Company or any of its shareholders, directors,
officers, employees or agents or take actions that are harmful to the Company’s good will with
others.

          (d) Intellectual Property. During and throughout the Employment Term and the
Restricted Period, Officer agrees to disclose to the Company any and all ideas, improvements,
techniques, modifications, processes, inventions, developments, discoveries, trade secrets,
trademarks, service marks, copyrights, trade names, business plans and any work of authorship
(“Intellectual Property”) developed, conceived, created, made, devised, discovered, acquired or
acquired knowledge of, by Officer during the Employment Term, either by himself or in conjunction
with any other Person, which relates in any way, directly or indirectly, or may be useful in any
manner in the business of the Company or its Affiliates, and any such item that is based upon or
utilizes Confidential Information, whether or not the Company or its Affiliates obtains a patent,
trademark, service mark or copyright thereon. Officer hereby agrees that the Intellectual Property

11

 

shall become and remain the sole and exclusive property of the Company. Officer hereby acknowledges
that all of Officer’s writing, works of authorship and other Intellectual Property are works made
for hire and the property of the Company, including patents, trademarks, service marks, copyrights
and other intellectual property rights pertaining thereto. Officer shall, at the request and cost
of the Company or any of its Affiliates, render assistance as the Company deems necessary or
desirable to secure, prosecute and/or defend the rights thereto by patent, trademark, service mark,
copyright to otherwise to the Company or its Affiliates, including without limitation the
assignment, transfer and conveyance to the Company or its Affiliates of all of Officer’s right,
title and interest in and to the Intellectual Property.

          (e) Officer’s Acknowledgment. The Company spends considerable amounts of time,
money and effort in developing and maintaining good will in its industry. Officer agrees the
covenants contained within this Section 6 (i) are reasonable and necessary in all respects to
protect the goodwill, trade secrets, confidential information, and business interests of the
Company; (ii) are not oppressive to Officer; (iii) do not impose any greater restraint on Officer
than is reasonably necessary to protect the goodwill, trade secrets, confidential information and
legitimate business interests of the Company; and (iv) will not, upon the termination, of Officer’s
employment with the Company for any reason whatsoever, cause Officer to be unable to earn a living
that is suitable and acceptable to Officer.

          (f) Equitable Relief. Officer hereby acknowledges and agrees that his services to be
rendered to the Company hereunder and his obligations contained in this Section 6 are of special,
unique and personal character which gives them a peculiar value to the Company, that the Company
cannot be reasonably or adequately compensated in money damages in an action at law in the event
Officer breaches any obligations under this Section 6, and that the provisions of this Section 6
are reasonable and necessary to protect the business of the Company. Officer therefore expressly
agrees that, in addition to any other rights or remedies which the Company may have at law or in
equity or by reason of any other agreement, the Company shall be entitled to injunctive and other
equitable relief in the form of temporary, preliminary and permanent injunctions without posting
bond or other security in the event of any actual or threatened breach of any such obligation by
Officer and without the necessity of proving actual damages, and to discontinue any salary, bonus,
benefits and/or insurance continuation provided hereunder. Nothing in this Agreement shall be
construed to prohibit the Company from pursuing any other remedy, and Officer agrees that all
remedies of the Company are cumulative.

          (g) Nature of Covenants. Officer’s covenants in Section 6 are independent covenants,
and the existence of any claim by Officer against the Company under this Agreement or otherwise
will not excuse Officer’s breach of, or waive Officer’s obligation to perform, any covenant in this
Section 6. If Officer’s employment hereunder terminates for any reason, or the Employment Term
expires, this Section 6, and the other terms and conditions of this Agreement necessary or
appropriate to enforce the covenants of Officer in Section 6, shall survive and remain in full
force and effect.

12

 

     Section 7. Representations and Warranties of Officer. Officer represents and
warrants to the Company that (a) Officer is under no contractual or other restriction, arrangement
or obligation which is or will be breached by or in conflict or inconsistent with his execution and
delivery of this Agreement, the performance of his duties hereunder, or the other rights of the
Company hereunder, and (b) Officer is under no physical or mental disability or incapacity that
would hinder the performance of his duties under this Agreement.

     Section 8. Consolidation, Merger or Sale of Assets. Nothing in this Agreement shall
preclude the Company from consolidating with, merging into, or transferring all or substantially
all of its assets to another entity which assumes all of the Company’s obligations and undertakings
hereunder. Upon such a consolidation, merger or transfer of assets, the term “Company” as used
herein shall mean such other entity, and this Agreement shall continue in full force and effect.

     Section 9. Officer Acknowledgment; Counsel. Officer acknowledges by executing this
Agreement and delivering it to the Company that (i) he has read all of the terms and conditions
hereof, including his obligations, covenants, representations and warranties to the Company; (ii)
the covenants of Officer in Section 6 are essential elements of this Agreement, and the Company
would not have entered into this Agreement without Officer’s agreement to comply with such
covenants; (iii) each and every term, covenant and restriction in this Agreement is reasonable and
necessary for the proper protection of the Company’s business; and (iv) he has been advised by the
Company that he should consult with independent counsel of his choice and have such counsel review
this Agreement and render advice thereon to Officer, and Officer has either done so or voluntarily
elected not to do so.

     Section 10. Taxes. All payments required to be made by the Company hereunder to
Officer shall be subject to withholding of such amounts relating to taxes as the Company may
reasonably determine it should withhold pursuant to any applicable federal, state or local law or
regulation. In lieu of withholding such amounts, in whole or in part, the Company may, in its sole
discretion, accept other provision for payment of taxes, provided it is satisfied that all
requirements of law affecting its responsibilities to withhold such taxes have been satisfied.

     Section 11. No Attachment. Except as required by law, no right to receive payment
under this Agreement shall be subject to anticipation, commutation, alienation, sale, assignment,
encumbrance, charge, pledge or hypothecation or to execution, attachment, levy, or similar process
of assignment by operation of law, and any attempt, voluntary or involuntary, to effect any such
action shall be null, void and of no effect.

     Section 12. General Provisions.

          (a) Governing Law. This Agreement shall in all respects be governed by, and construed
in accordance with, the internal substantive laws of the State of Delaware, without giving effect
to any conflict or choice of law principles or rules.

          (b) Amendment. This Agreement may not be amended or modified in whole or in part in
any manner except in a writing which makes reference to this Agreement executed by both parties
hereto.

13

 

          (c) Assignment. Neither the Agreement, nor any rights, obligations or duties
hereunder, may be assigned or delegated by any party hereto without the prior written consent of
the other party hereto; provided, however, that this Agreement shall inure to the benefit of and be
binding upon the successors and assigns of the Company upon any sale of all or substantially all of
the Company’s stock or assets, or upon any merger, consolidation or reorganization of the Company
with or into any other Person, so long as such successors or assigns assume all of the Company’s
obligations hereunder. As used in this Agreement, the term “Company” shall be deemed to refer to
any such successor or assign of the Company referred to in the preceding sentence.

          (d) Successors and Assigns. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective successors and permitted assigns.

          (e) Entire Agreement.

               (i) This Agreement (along with the Restricted Stock Agreement) sets forth the entire agreement
and understanding of the parties hereto with respect to the subject matter hereof and supersedes in
their entirety all prior and contemporaneous written and oral agreements, arrangements,
understandings, negotiations, communications, covenants, representations and warranties among the
parties hereto relating to the subject matter hereof.

               (ii) Officer acknowledges that from time to time, the Company may establish, maintain or
distribute the employee manuals or handbooks or personnel policy manuals, and officers or other
representatives of the Company may make written or oral statements relating to personal policies
and procedures. Such manuals, handbooks and statements are intended only for general guidance. No
policies, procedures or statements of any nature by or on behalf of the Company (whether written or
oral, and whether or not contained in any the employee manual or handbook or personnel policy
manual), and no acts or practices of any nature, shall be construed to modify this Agreement.

          (f) Notices. Any and all notices, demands, requests, elections and other
communications required or permitted to be given hereunder shall be in writing and shall be deemed
to have been duly given (i) upon personal delivery; (ii) upon confirmation of receipt when sent by
facsimile transmission; (iii) one business day after deposit during normal business hours with a
nationally recognized overnight courier, specifying next day delivery, with written verification of
receipt; (iv) five business days after being sent by first class (certified or registered) mail,
postage prepaid, return receipt requested, in each case to the following addresses:

If to the Company:

PowerSecure International, Inc.

1609 Heritage Commerce Boulevard

Wake Forest, NC 27587

Attn: Chairman of the Board

Telephone: (919) 556-3056

Facsimile: (919) 556-3596

14

 

With copies to:

PowerSecure International, Inc.

1609 Heritage Commerce Boulevard

Wake Forest, NC 27587

Attn: Chief Financial Officer

Telephone: (919) 556-3056

Facsimile: (919) 556-3596

and:

Paul R. Hess, Esq.

Kegler, Brown, Hill & Ritter Co., L.P.A.

65 E. State Street, Suite 1800

Columbus, Ohio 43215

Telephone: (614) 462-5400

Facsimile: (614) 464-2634

If to Officer to:

Sidney Hinton

                                        

Wake Forest, NC 27587

Telephone: (919) 818-5338

Any party hereto may send any notice, demand, request, election or other communication to the
intended recipient at its address set forth above using any other means (such as expedited courier,
messenger service, telecopy, telex, ordinary mail or electronic mail), but no such notice, demand,
request or other communication shall be deemed to have been given until it is actually received by
the recipient. Any party hereto may change its designated address by giving written notice to all
other parties.

          (g) Waiver. The obligations of any party hereunder may be waived only with the written
consent of the party or parties entitled to the benefits the obligations so involved. Any waiver
of a breach or violation of or default under any provision of this Agreement shall not be construed
or operate as, or constitute, a waiver of any other or subsequent breach or violation of or default
under that provision or any other provision of this Agreement. The failure of any party to insist
upon strict compliance with any provision of this Agreement on any one or more occasions shall not
be construed or operate as, or constitute, a continuing waiver of, or an estoppel of that party’s
right to insist upon strict compliance with, that provision or any other provision of this
Agreement.

          (h) Severability. The provisions of this Agreement shall be deemed severable. If any
provision of this Agreement is determined to be illegal, invalid or unenforceable in any situation:
(i) the parties hereto shall agree to a suitable and equitable provision to be substituted
therefor in order to carry out, so far as may be valid and enforceable, the intent and purpose of
such invalid or unenforceable provision; and (ii) the remainder of this

15

 

Agreement shall remain in full force and effect, and the application of such provision in any other
situation shall not be affected.

          (i) Counterparts. This Agreement may be executed in any number of counterparts
(including counterparts executed by less than all parties hereto), each of which shall be deemed to
be an original, but all of which together shall constitute one and the same instrument.

          (j) Headings. The headings used herein are solely for convenience of reference and
shall not be given any effect in the construction or interpretation of this Agreement.

          (k) No Third Party Beneficiaries. Nothing in this Agreement, express or implied,
in intended to create or confer and shall not be construed or operate as creating or conferring,
any rights or remedies under or by reason of this Agreement, upon any Person other than the parties
hereto and their respective successors and permitted assigns.

          (l) Further Assurances. The parties hereto agree to take or cause to be taken all
actions, which are necessary, convenient or desirable in order to effect the transactions
contemplated by this Agreement.

          (m) Best Efforts. Each of the parties hereto shall act in good faith and use its best
efforts to bring about the transactions contemplated by this Agreement.

          (n) Expenses. Except as otherwise expressly provided herein, each of the parties to
this Agreement shall pay his or its own costs and expenses incurred in connection with this
Agreement and the consummation of the transactions contemplated hereby.

          (o) Construction. In the event an ambiguity or question or intent or interpretation
arises, this Agreement shall be construed as if drafted jointly by the parties hereto and no
presumption or burden of proof shall arise favoring or disfavoring any party hereto by virtue of
the authorship of any of the provisions of this Agreement.

          (p) Specific Performance. Each of the parties hereto acknowledges and agrees that
the other parties hereto would suffer irreparable damage for which an adequate remedy at law would
not be available in the event any of the provisions of this Agreement is not performed in
accordance with its specific terms or otherwise is breached. Accordingly, each of the parties
hereto agrees that the non-breaching parties shall be entitled to an injunction, restraining order
or other form of equitable relief from any court of competent jurisdiction to prevent breaches of,
and to specifically enforce, the provisions of this Agreement.

          (q) Section 409A. This Agreement is intended to comply with Section 409A.
Notwithstanding any other provision of this Agreement to the contrary, in the event that either the
Company or Officer reasonable believes that any provision of this Agreement would subject Officer
to any excise or additional tax, interest, charges or penalties under Section 409A (“409A
Charges”), then the Company shall have the right to take any actions and to modify any provision
hereunder required to comply with Section 409A or to minimize any such 409A Charges with respect to
any payment or benefit due to Officer under this Agreement, including

16

 

delaying making or providing payments or benefits due to Officer hereunder until six months after the date of termination of
Officer’s employment hereunder, provided that all such payments and benefits due to Officer
hereunder that are so delayed or deferred shall be made or provided at the earliest time
practicable without Officer incurring such 409A Charges, and further provided that any such
modification or deferral does not adversely affect, in any material respect, the economic benefit
to Officer of such payments or benefits.

          (r) Interpretation of Certain Provisions. Except as otherwise expressly provided
herein, as used in this Agreement:

               (i) Any reference to any federal, state, local or foreign statute or law shall be deemed also
to include a reference to all rules and regulations promulgated thereunder.

               (ii) The term “including” means “including, without limitation”.

               (iii) The term “Entity” means and includes a corporation, partnership, limited liability
company, joint venture, trust, association, unincorporated organization, governmental or regulating
body or authority, or any other form of business or entity.

               (iv) The term “Person” means and includes an individual and an Entity.

               (v) The number and gender of each noun and pronoun and the terms “Person” and “Persons” and
the like shall be construed to mean such number and gender as the context, the circumstances or its
antecedent may require.

               (vi) The terms “hereof”, “herein”, “hereunder” and words of similar import refer to this
Agreement as a whole, and not to any Section, subsection or clause of this Agreement.

               (vii) Each reference to a Section means such Section of this Agreement.

               (viii) The term “fiscal year” in reference to the Company shall mean the year ending December
31, or such other date as the Company designates as its fiscal year in its financial statements.

* * * * * * * * *

17

 

     IN WITNESS WHEREOF, this Second Amended and Restated Employment and Non-Competition Agreement
has been executed and delivered by or on behalf the parties hereto, effective as of the date first
above written.

	 	 	 	 	 
	 	THE COMPANY:

POWERSECURE INTERNATIONAL, INC.

 	 
	 	By:  	/s/ Christopher T. Hutter
 	 
	 	 	Christopher T. Hutter, Vice President 	 
	 
	 	Attest:

 	 
	 	By:  	/s/ John A. (Andy) Miller
 	 
	 	 	John A. (Andy) Miller, Chairman of the 	 
	 	 	Compensation Committee 	 
	 
	 	OFFICER:

 	 
	 	/s/ Sidney Hinton
 	 
	 	Sidney Hinton 	 
	 	 	 

18exv10w2

EXHIBIT 10.2

SIDNEY HINTON

AMENDMENT NO. 2 TO RESTRICTED STOCK AGREEMENT

 

 

AMENDMENT NO. 2

TO

RESTRICTED STOCK AGREEMENT

     This AMENDMENT NO. 2 TO RESTRICTED STOCK AGREEMENT (the “Amendment”) is made and entered into
as of December 17, 2009 (the “Effective Date”), by and between PowerSecure International, Inc.
(formerly known as Metretek Technologies, Inc.), a Delaware corporation (the “Company”), and Sidney
Hinton (the “Grantee”).

Recitals

     WHEREAS, the Company and the Grantee have previously entered into that certain Restricted
Stock Agreement, dated as of August 15, 2007, amended as of December 31, 2007 (as from time to time
amended and restated, the “Restricted Stock Agreement”), pursuant to which the Company has granted
to the Grantee restricted shares of Common Stock, par value $.01 per share (“Common Stock”), of the
Company, subject to vesting and other terms and conditions set forth in the Restricted Stock
Agreement; and

     WHEREAS, the Company and the Grantee desire to amend the terms of the Restricted Stock
Agreement as set forth herein;

Agreement

     NOW, THEREFORE, in consideration of the premises and the mutual covenants set forth herein,
and other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intend to be legally bound hereby, agree as follows:

     1. Definitions. Capitalized terms used in this Amendment and not otherwise defined
herein shall have the respective meanings given to them in the Restricted Stock Agreement.

     2. Amendment. The “Vesting Schedule” for the Restricted Shares that were Unvested
Shares on the date hereof is hereby modified and amended as set forth on Schedule I hereto.

     3. Effectiveness of Amendment. This Amendment shall be effective as of the date
first above written, and all references to the Restricted Stock Agreement, including the terms
“this Agreement,” “hereof,” “herein” and the like contained in the Restricted Stock Agreement,
shall, as of and after such date, be deemed to be references to the Restricted Stock Agreement as
modified by the terms of this Amendment. Except as and to the extent expressly modified by the
terms of this Amendment, the Restricted Stock Agreement shall remain in full force and effect in
accordance with its terms.

     4. Governing Law. This Amendment shall be governed by and construed in accordance
with the laws of the State of Delaware, without regard to provisions governing conflicts of laws.

     5. Successor and Assigns. This Amendment shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted assigns.

 

 

     6. Captions. The captions contained in this Amendment 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 Amendment.

     7. Counterparts. This Amendment may be executed in any number of counterparts
(including counterparts executed by less than all parties hereto), each of which shall be deemed to
be an original, but all of which together shall constitute one and the same instrument.

(Next page is the Signature Page)

2

 

SIGNATURE PAGE

     IN WITNESS WHEREOF, this Amendment No. 2 to Restricted Stock Agreement has been executed and
delivered by or on behalf of the parties hereto as of the date first set forth above.

	 	 	 	 	 
	 	POWERSECURE INTERNATIONAL, INC.

 	 
	 	By:  	/s/ Christopher T. Hutter
 	 
	 	 	Christopher T. Hutter, Vice President and 	 
	 	 	Chief Financial Officer 	 
	 
	 	GRANTEE:

 	 
	 	/s/ Sidney Hinton
 	 
	 	Sidney Hinton 	 
	 	 	 

3

 

	 	 	 	 	 

SCHEDULE I

Vesting Schedule for Unvested Shares (As Amended)

	 	 	 	 	 
	Vesting Percentage	 	 	 	 
	(Number of Shares)	 	Vesting Date	 	Vesting Condition
	 
	 	 	 	 
	Service Shares
	 	 	 	 
	 
	 	 	 	 
	50% (300,000)

	 	August 8, 2012
	 	Continuous Employment
	 
	 	 	 	 
	Performance Shares
	 	 	 	 
	 
	 	 	 	 
	10% (60,000)

	 	Day Form 10-K for
Fiscal Year 2009 is filed
	 	Shares Vest on Vesting Date
	 
	 	 	 	 
	10% (60,000)

	 	Day Form 10-K for
Fiscal Year 2010 is filed
	 	Company achieves Restricted Share

Performance Goal for Fiscal Year 2010*
	 
	 	 	 	 
	10% (60,000)

	 	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.

Restricted Share Performance Goal for Unvested Shares

	 	 	 	 	 	 	 
	Fiscal Year	 	No. Performance Shares	 	Restricted Share Performance Goal
	 
	 	 	 	 	 	 
	2009

	 	 	60,000	 	 	Shares Vest on Vesting Date,

No Performance Goal
	 
	 	 	 	 	 	 
	2010

	 	 	60,000	 	 	10% increase over the Company’s

2009 consolidated net income
	 
	 	 	 	 	 	 
	2011

	 	 	60,000	 	 	10% increase over the Company’s

2010 consolidated net income

4

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