Exhibit 10.1
EMPLOYMENT AND NON-COMPETITION AGREEMENT
This EMPLOYMENT AND
NON-COMPETITION AGREEMENT (this “Agreement”) is
made and entered into as of December 10, 2007 by and between
PowerSecure International, Inc. , a Delaware corporation
(the “Company”), and Christopher T. Hutter , an
individual who as of the date hereof resides in Simsbury,
Connecticut (“Officer”).
Recitals
WHEREAS, Officer was engaged as an
employee and appointed as the Vice President and Chief Financial
Officer of the Company on December 10, 2007; and
WHEREAS, the Company desires to
employ Officer, and Officer desires to serve the Company, upon the
terms and subject to the conditions set forth herein; and
WHEREAS, the Company and Officer
desire to set forth the terms and conditions of such employment in
this Agreement;
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 10,
2012, 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 Vice
President and Chief Financial Officer of the Company, and in such
additional management offices and capacities and with such
additional titles and duties as shall be designated by the
Company’s Board of Directors (the “Board”) during
the Employment Term, shall have the authority and perform the
duties and responsibilities customary for such offices, shall
report to the Chief Executive Officer of the Company (the
“CEO”) and to the Board, and shall have such other
duties as may be assigned
to him
from time to time by the CEO and 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 CEO
and 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 (including complying with Section 6 of the General
Release Agreement between Officer and ADVO, Inc., his previous
employer) 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 $275,000 per year (the “Base
Salary”), 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 Board (through its 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:
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(i) Annual Performance Bonus . Officer
shall be eligible to receive a bonus in a target amount of 35% of
his Base Salary, as from time to time in effect, for excellent
service to the Company, based upon the achievement of such
performance goals as shall be established annually by the
Compensation Committee of the Board based in part upon the
recommendation of the CEO.
(ii) General Bonus Program .
Officer’s eligibility to participate in any other bonus
program or any other form of profit-sharing participation for
senior executive officers of the Company not expressly provided for
in this Agreement shall be in the sole discretion of the Board or
the Compensation Committee.
(c) Restricted Stock Grant . The Company
hereby grants to Officer an award of “Restricted Stock”
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 25,000 shares of Common Stock,
par value $.01 per share, of the Company (the “Restricted
Shares”) that are subject to the terms and conditions of the
form of Restricted Stock Agreement attached hereto as Exhibit
A , and shall include 2,500 Restricted Shares that vest on the
date of this Agreement, 12,500 Restricted Shares that vest on
December 10, 2012, provided Officer has been employed
continuously with the Company from the date hereof through such
vesting date, subject to earlier vesting under certain
circumstances as provided in the Restricted Stock Agreement (the
“Service Restricted Shares”); and (ii) 10,000
Restricted Shares that vest in four equal annual installments for
fiscal years 2008 through 2011 based upon performance targets set
forth in the Restricted Stock Agreement (the “Performance
Restricted Shares”). In the event of a Change in Control of
the Company (either as defined below or as defined in the
Company’s 1998 Stock Incentive Plan, as amended and restated,
under which the Restricted Shares are issued), 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 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(d).
(e) Relocation Expenses . The Company shall
reimburse Officer for the reasonable out-of-pocket expenses
incurred by Officer (subject to providing reasonable documentation
to the Company thereof) in connection with (i) Officer’s
efforts to locate a principal residence in the Raleigh/Wake Forest,
North Carolina area and then relocating his family and possessions
to such new residence (excluding real estate commissions, housing
costs and mortgage expenses), and (ii) Officer’s living
expenses in Wake Forest while he serves the Company prior to such
relocation (which living expenses shall include lodging expenses at
a hotel designated by the CEO). All such reimbursements are subject
to the Company’s prior receipt of written supporting
documentation of such expenses.
(f) 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
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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.
(g) Expenses . The Company shall, upon
presentment by Officer of appropriate receipts and vouchers
therefor, reimburse Officer for all reasonable, ordinary and
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.
(h) 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.
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, including, if he dies on or after July 1 2007 of any fiscal
year, a prorated portion of any bonus that would have been earned
based on criteria established by the Board for that fiscal year,
but for his death (a “Stub Bonus”).
(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” 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. 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, including, if notice of
Disability is given on or after July 1 of any fiscal year, any Stub
Bonus applicable to that fiscal year; (ii) an amount equal to
one-half of the full Severance Amount, computed and payable as
provided in Section 5(j), except that the average Bonus shall
be computed based only on the three fiscal years preceding the
fiscal year in which Officer’s employment is terminated (or,
if less, the number of fiscal years preceding his termination that
Officer has been employed hereunder), 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) for a period of two 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
(iv) 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
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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.
For purposes of this Agreement, “Disability” means the
physical or mental inability of Officer, due to illness, accident
or other incapacity, to effectively perform the essential functions
of his duties hereunder for any period of 90 consecutive days, or
180 days during any twelve-month period, or which results from
an incapacity determined to be total and permanent as determined by
an independent physician selected by the Company.
(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” 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 two 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
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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.
(e) By Officer . Officer agrees not to
voluntarily terminate his employment hereunder, except by giving at
least 60 days written notice to the Company. Upon such
voluntary termination by Officer, Officer shall be entitled to
receive only 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; and (ii) 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.
(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 any 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
(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 two 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.
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(ii) Definition of Change in Control .
For the purpose of this Agreement, a “Change in
Control” of the Company shall be deemed to have occurred only
if:
(A) Any
person or group (as such terms are used in Sections 13 (d)
(3) and 14 (d) (2) of the Securities Exchange Act of
1934, as amended (the “Exchange Act”) acquires the
beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act), directly or indirectly, of 50%
or more of the aggregate voting power of all classes of the
Company’s then outstanding voting securities entitled to vote
generally in the election of directors of the Company; or
(B) Individuals who, as of any given date, constitute the
Board of Directors of the Company (the “Board”
generally, and as of the date hereof, the “Incumbent
Board”) cease for any reason to constitute at least a
majority of the Board within 12 months after such date,
provided that any person becoming a director subsequent to the date
hereof whose election, or nomination for election by the C
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