AMENDED AND RESTATED EMPLOYMENT
AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT
(the “Agreement”) is made as of the 24th day of
September, 2008, by and between PIKE ELECTRIC CORPORATION, a
Delaware corporation (“Employer”), and JOSEPH ERIC
PIKE, an individual domiciled in the State of North Carolina
(“Executive”).
Executive is currently employed by Employer
pursuant to an Employment Agreement dated as of July 20, 2005
(the “Predecessor Agreement”). Employer and Executive
have agreed to amend and restate the Predecessor Agreement, as set
forth herein.
1.1. Position . Subject to the terms and
conditions of this Agreement, Employer hereby employs Executive,
and Executive hereby accepts employment, as Chief Executive Officer
of Employer commencing on the Effective Date and ending upon the
termination of the Term. Executive shall perform the duties of his
position as determined by the Board of Directors of Employer (the
“Board”) in accordance with the policies, practices and
bylaws of Employer. Executive shall report directly to the
Board.
1.2. Time and Effort . Executive shall
serve Employer faithfully, loyally, honestly and to the best of his
ability. Executive shall devote all his business time and best
efforts to the performance of his duties on behalf of Employer.
During his term of employment, Executive shall not at any time or
place or to any extent whatsoever, either directly or indirectly,
without the express written consent of the Board, engage in any
outside employment or in any activity competitive with or adverse
to Employer’s business, practice or affairs. This is not
intended to prohibit Executive from engaging in nonprofessional
activities such as personal investments or conducting to a
reasonable extent private business affairs, as long as they do not
conflict or interfere with Executive’s responsibilities to
Employer, provided that Executive shall not serve on other boards
of directors without the prior consent of the Board. Participation
to a reasonable extent in civic, social or community activities is
encouraged.
1.3. Term . The term (“Term”)
of this Agreement shall commence on and as of the July 1, 2008 (the
“Effective Date”) and, unless earlier terminated
pursuant to Article IV, shall continue for a period of one
year (the “Initial Term”). Thereafter, the Term shall
be automatically extended for additional one-year periods (each, an
“Additional Term”), subject to either party’s
right to terminate this Agreement by giving the other party written
notice of its intention to do so at least sixty (60) days
prior to the expiration of the Initial Term or the Additional Term,
as the case may be.
2.1. Base Salary . Employer agrees to pay
Executive, and Executive agrees to accept, as compensation for the
services and obligations set forth herein, base salary (herein
“Base Salary”) in cash equal to the sum of Seven
Hundred Eighty Thousand and No/100 ($780,000), which sum shall be
paid to Executive by Employer, less any taxes required to be
withheld under federal, state and local law, in accordance with
Employer’s standard payroll practices for executive
personnel, as same may change from time to time. The amount of Base
Salary shall be subject to adjustment as provided in
Section 2.2 below.
2.2. Adjustments to Base Salary . Upward
adjustments to Executive’s Base Salary shall be determined by
the compensation committee of the Board (the
“Committee”) in its sole discretion. For so long as
Executive is employed by Employer there shall be no reductions in
Executive’s Base Salary, as adjusted.
2.3. Annual Bonuses . Subject to
Section 10.1 below, in addition to the Base Salary described
above, Executive shall receive an annual bonus in such amounts and
on such terms and conditions as adopted or approved by the
Committee from time to time.
2.4. Long-Term Incentive Plan . Subject
to Section 10.1 below, Executive shall be entitled to
participate in a long-term incentive plan of Employer in such
amounts and on such terms and conditions as adopted or approved by
the Committee from time to time.
2.5. Additional Compensation . Executive
shall further be eligible to participate in any other management
incentive plans of Employer to the extent such plans are adopted or
continue in effect (as determined in the discretion of the
Committee), and to receive such additional compensation as may be
provided by such plans from time to time or as otherwise approved
by the Committee.
ARTICLE III
EXECUTIVE BENEFITS
3.1. Employer Policy . Executive shall be
entitled to all executive benefits currently offered or adopted by
Employer during Executive’s employment with
Employer.
3.2. Business Expenses . Employer will
reimburse Executive for all reasonably incurred business expenses,
subject to the travel and expense policy established by Employer
from time to time, incurred by Executive in the performance of
Executive’s duties pursuant to this Agreement, provided that
Executive furnishes to Employer adequate records and other
documentary evidence required to substantiate such
expenditures.
3.3. Personal Use of Employer Aircraft .
Employer will provide Executive with personal use of any of
Employer’s aircraft for up to 50 flight hours per year,
provided such use does not interfere with the normal business use
of the aircraft. Executive agrees to schedule his personal use of
the aircraft in advance, upon reasonable notice to
Employer.
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3.4. Excise
Tax Gross-Up .
(a) In the event it shall be determined
that any payments or distributions by Employer to Executive or for
Executive’s benefit (whether paid or payable or distributed
or distributable pursuant to the terms of this Agreement or
otherwise, but determined without regard to any additional payments
required under this Section 3.4) (“Payments”) are
subject to the excise tax imposed by Section 4999 (or any
successor provisions) of the Internal Revenue Code of 1986, as
amended (the “Code”), or any interest or penalty is
incurred by Executive with respect to such excise tax (such excise
tax, together with any such interest and penalties, the
“Excise Tax”), then Executive shall be entitled to
receive an additional payment (a “Gross-Up Payment”) in
an amount such that, after payment by Executive of all taxes
(including any income taxes and Excise Tax imposed on the Gross-Up
Payment (and any interest and penalties imposed with respect
thereto)), Executive retains an amount of the Gross-Up Payment
equal to the Excise Tax imposed upon all such Payments; provided,
however, that, if no Excise Tax would be imposed on such Payments
were the aggregate amount of all such Payments reduced by an amount
not to exceed 5% of such aggregate amount, then Executive shall
forfeit and Employer shall not be obligated to pay the amount of
such Payments (which shall not exceed 5% of such aggregate amount)
necessary to avoid imposition of the Excise Tax on such Payments (a
“Payment Reduction”), and Executive shall be entitled
to designate the particular Payments (and the amounts thereof) to
be so reduced.
(b) Subject to the provisions of
Section 3.4(c), all determinations required to be made under
this Section 3.4, including whether and when such a Gross-Up
Payment or Payment Reduction is required, the amount of such
Gross-Up Payment or Payment Reduction and the assumptions to be
utilized in arriving at such determination, shall be made by Ernst
& Young LLP (or its successor) (the “Accounting
Firm”) which shall provide detailed supporting calculations
both to Employer and to Executive within thirty (30) business
days of the receipt of notice from Executive that there has been a
Payment subject to Excise Tax, or such earlier time as is requested
by Employer. In the event that the Accounting Firm is serving as
accountant or auditor for the individual, entity or group effecting
the change of control of Employer that gives rise to the Excise
Tax, Employer shall appoint another nationally recognized
accounting firm to make the determinations required hereunder
(which shall then be deemed to be the Accounting Firm). All fees
and expenses of the Accounting Firm shall be borne solely by
Employer. Any Gross-Up Payment as determined pursuant to this
Section 3.4 shall be paid by Employer to Executive within ten
(10) business days of the receipt of the Accounting
Firm’s determination. If the Accounting Firm determines that
no Excise Tax is payable by Executive, it shall furnish Executive
with a written opinion that failure to report the Excise Tax on
Executive’s applicable federal income tax return would not
result in the imposition of a negligence or similar penalty. Any
determination by the Accounting Firm shall be binding upon Employer
and Executive. As a result of the uncertainty of the application of
Section 4999 of the Code at the time of the initial
determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments which will not have been made by Employer should
have been made (“Underpayment”). In the event that
Employer exhausts its remedies pursuant to Section 3.4(c) and
Executive thereafter is required to make a payment of any Excise
Tax, the Accounting Firm shall determine the amount of the
Underpayment that has occurred, and any such Underpayment shall be
promptly paid by Employer to Executive.
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(c) Executive shall notify Employer in
writing of any claim by the Internal Revenue Service or other
taxing authority that, if successful, would require the payment by
Employer of the Gross-Up Payment. Such notification shall be given
as soon as practicable but no later than five (5) days after
Executive or his representative is informed in writing of such
claim and shall apprise Employer of the nature of such claim and
the date on which such claim is requested to be paid. Executive
shall not pay such claim or take any other action with respect
thereto prior to the expiration of the thirty (30) day period
following the date on which Executive gives such notice to Employer
(or such shorter period ending on the date that any payment of
taxes with respect to such claim is due). If Employer notifies
Executive in writing prior to the expiration of such period that it
desires to contest such claim, Executive shall (a) give
Employer any information reasonably requested by Employer relating
to such claim, (b) take such action in connection with
contesting such claim as Employer shall reasonably request in
writing from time to time, including accepting legal representation
with respect to such claim by an attorney reasonably selected by
Employer, (c) cooperate with Employer in good faith in order
effectively to contest such claim and (d) permit Employer to
participate in any proceedings relating to such claim; provided,
however, that Employer shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in
connection with such contest and shall indemnify and hold Executive
harmless, on an after-tax basis, for any Excise Tax or income tax
(including interest and penalties with respect thereto) imposed as
a result of such representation and payment of costs and expenses.
Without limiting the foregoing, Employer shall control all
proceedings taken in connection with such contest and, at its sole
option, may pursue or forego any and all administrative appeals,
proceedings, hearings and conferences with the taxing authority in
respect of any such claim and may, at its sole option, either
direct Executive to pay the tax claimed and sue for a refund or
contest the claim in any permissible manner, and Executive agrees
to prosecute such contest to a determination before any
administrative tribunal, in a court of initial jurisdiction and in
one or more appellate courts, as Employer shall determine;
provided, however, that if Employer directs Executive to pay such
claim and sue for a refund, Employer shall advance the amount of
such payment to Executive, on an interest-free basis, and shall
indemnify and hold Executive harmless, on an after-tax basis, from
any Excise Tax or income tax (including interest or penalties with
respect thereto) imposed with respect to such advance or with
respect to any imputed income with respect to such advance; and
provided, further, that any extension of the statute of limitations
relating to payment of taxes for Executive’s taxable year
with respect to which such contested amount is claimed to be due is
limited solely to such contested amount. Furthermore,
Employer’s control of the contest shall be limited to
issues
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