INDEMNIFICATION
AGREEMENT
This
INDEMNIFICATION AGREEMENT (this “ Agreement ”)
is made and entered into effective as of April 6, 2009 by and
between PowerSecure International, Inc., a Delaware corporation
(the “ Company ”), and
(“ Indemnitee ”).
WHEREAS, it is
essential to the Company to retain and attract as directors and
officers the most capable persons available;
WHEREAS,
Indemnitee is a director and/or officer of the Company;
WHEREAS, both the
Company and Indemnitee recognize the increased risk of litigation
and other claims currently being asserted against directors and
officers of corporations;
WHEREAS, the
Certificate of Incorporation and By-laws of the Company provide for
the Company to indemnify and advance expenses to its directors and
officers to the fullest extent permitted under Delaware law, and
the Indemnitee has been serving and continues to serve as a
director and/or officer of the Company in part in reliance on the
Company’s Certificate of Incorporation and Bylaws;
and
WHEREAS, in
recognition of Indemnitee’s need for (i) substantial
protection against personal liability based on Indemnitee’s
reliance on the aforesaid Certificate of Incorporation and Bylaws,
(ii) specific contractual assurance that the protection
promised by the Certificate of Incorporation and Bylaws will be
available to Indemnitee (regardless of, among other things, any
amendment to or revocation of the Certificate of Incorporation and
By-laws or any change in the composition of the Company’s
Board of Directors or acquisition transaction relating to the
Company), and (iii) an inducement to provide effective
services to the Company as a director and/or officer, the Company
wishes to provide in this Agreement for the indemnification of and
the advancing of expenses to Indemnitee to the fullest extent
(whether partial or complete) permitted under Delaware law and as
set forth in this Agreement, and, to the extent insurance is
maintained, to provide for the continued coverage of Indemnitee
under the Company’s directors’ and officers’
liability insurance policies.
NOW, THEREFORE, in
consideration of the above premises and of Indemnitee’s
continuing to serve the Company directly or, at its request, with
another enterprise, and intending to be legally bound hereby, the
parties agree as follows:
1.
Certain Definitions . As used herein, the following terms
shall have the following respective meanings:
(a)
“ Board ” shall mean the Board of Directors of
the Company.
(b) A
“ Change in Control” shall be deemed to have
occurred if (i) any “person” (as such term is used
in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”)) (other than a trustee
or other fiduciary holding
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securities
under an employee benefit plan of the Company or a corporation
owned directly or indirectly by the stockholders of the Company in
substantially the same proportions as their ownership of stock of
the Company, and other than any person holding shares of the
Company on the date that the Company first registers under the Act
or any transferee of such individual if such transferee is a spouse
or lineal descendant of the transferee or a trust for the benefit
of the individual, his spouse or lineal descendants), is or becomes
the “beneficial owner” (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of
the Company representing 20% or more of the total voting power
represented by the Company’s then outstanding Voting
Securities, or (ii) during any period of two consecutive
years, individuals who at the beginning of such period constitute
the Board and any new director whose election by the Board or
nomination for election by the Company’s stockholders was
approved by a vote of at least two-thirds (2/3) of the directors
then still in office who either were directors at the beginning of
the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute a
majority of the Board, or (iii) the stockholders of the
Company approve a merger or consolidation of the Company with any
other entity, other than a merger or consolidation that would
result in the Voting Securities of the Company outstanding
immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into Voting Securities
of the surviving entity) at least 80% of the total voting power
represented by the Voting Securities of the Company or such
surviving entity outstanding immediately after such merger or
consolidation, or (iv) the stockholders of the Company approve
a plan of complete liquidation of the Company or an agreement for
the sale or disposition by the Company (in one transaction or a
series of transactions) of all or substantially all of the
Company’s assets.
(c)
“ Disinterested Director ” shall mean a director
of the Company who is not and was not a party to the Proceeding in
respect of which indemnification is sought by
Indemnitee.
(d)
“ Expenses ” shall mean any expense, liability,
or loss, including attorneys’ fees, judgments, fines, ERISA
excise taxes and penalties, amounts paid or to be paid in
settlement, any interest, assessments, or other charges imposed
thereon, any federal, state, local, or foreign taxes imposed as a
result of the actual or deemed receipt of any payments under this
Agreement, and all other costs and obligations, paid or incurred in
connection with investigating, defending, being a witness in,
participating in (including on appeal), or preparing for any of the
foregoing in, any Proceeding relating to any Indemnifiable
Event.
(e)
“ Indemnifiable Event ” shall mean any event or
occurrence that takes place either prior to or after the execution
of this Agreement, related to the fact that Indemnitee is or was a
director, officer or employee of the Company, or while a director,
officer or employee, is or was serving at the request of the
Company as a director, officer, employee, trustee, agent, limited
partner, member or fiduciary of another foreign or domestic
corporation, partnership, joint venture, employee benefit plan,
trust, or other enterprise, or was a director, officer, employee,
or agent of a foreign or domestic corporation that was a
predecessor corporation of the Company or of another enterprise at
the request of such predecessor corporation, or related to anything
done or not done by Indemnitee in any such capacity, whether or not
the basis of the Proceeding is alleged action in an official
capacity as a director, officer, employee, or agent or
in
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any other
capacity while serving as a director, officer, employee, or agent
of the Company, as described above.
(f)
“ Independent Counsel ” shall mean the person or
body appointed in connection with Section 3.
(g) A
“ Potential Change in Control ” shall be deemed
to have occurred if (i) the Company enters into an agreement
or arrangement, the consummation of which would result in the
occurrence of a Change in Control; (ii) any person (including
the Company) publicly announces an intention to take or to consider
taking actions that, if consummated, would constitute a Change in
Control; (iii) any person (other than a trustee or other
fiduciary holding securities under an employee benefit plan of the
Company acting in such capacity or a corporation owned, directly or
indirectly, by the stockholders of the Company in substantially the
same proportions as their ownership of stock of the Company), who
is or becomes the Beneficial Owner, directly or indirectly, of
securities of the Company representing 10% or more of the combined
voting power of the Company’s then outstanding Voting
Securities, increases his beneficial ownership of such securities
by 5% or more over the percentage so owned by such person on the
date hereof, or (iv) the Board adopts a resolution to the
effect that, for purposes of this Agreement, a Potential Change in
Control has occurred.
(h)
“ Proceeding ” shall mean any threatened,
pending, or completed action, suit, arbitration, alternative
dispute mechanism, inquiry, administrative or legislative hearing,
investigation or any other actual, threatened or completed
proceeding, including any and all appeals, whether conducted by the
Company or any other party, whether civil, criminal,
administrative, investigative, or other, and in each case whether
or not commenced prior to the date of this Agreement, that relates
to an Indemnifiable Event.
(i)
“ Reviewing Party ” shall mean the person or
body appointed in accordance with Section 3.
(j)
“ Voting Securities ” shall mean any securities
of the Company that vote generally in the election of
directors.
2.
Agreement to Indemnify . The Company agrees to indemnify
Indemnitee as follows:
(a)
General Agreement . In the event Indemnitee was, is, or
becomes a party to or witness or other participant in, or is
threatened to be made a party to or witness or other participant
in, a Proceeding by reason of (or arising in part out of) an
Indemnifiable Event, the Company shall indemnify Indemnitee from
and against any and all Expenses, liability or loss, judgments,
fines, ERISA excise taxes and penalties, amounts paid or to be paid
in settlement, any interest, assessments, or other charges imposed
thereon, and any federal, state, local, or foreign taxes imposed as
a result of the actual or deemed receipt of any payments under this
Agreement, to the fullest extent permitted by applicable law, as
the same exists or may hereafter be amended or interpreted (but in
the case of any such amendment or interpretation, only to the
extent that such amendment or interpretation permits the Company to
provide broader
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indemnification
rights than were permitted prior thereto). The parties hereto
intend that this Agreement shall provide for indemnification in
excess of that expressly permitted by statute, including, without
limitation, any indemnification provided by the Company’s
Certificate of Incorporation, its By-laws, vote of its shareholders
or disinterested directors, or applicable law.
(b)
Initiation of Proceeding . Notwithstanding anything in this
Agreement to the contrary, Indemnitee shall not be entitled to
indemnification or advancement pursuant to this Agreement in
connection with any Proceeding initiated by Indemnitee against the
Company or any director or officer of the Company unless
(i) the Company has joined in or the Board has consented to
the initiation of such Proceeding; (ii) the Proceeding is one
to enforce indemnification rights under Section 5; or
(iii) the Proceeding is instituted after a Change in Control
(other than a Change in Control approved by a majority of the
directors on the Board who were directors immediately prior to such
Change in Control) and Independent Counsel has approved its
initiation.
(c)
Expense Advances . If so requested by Indemnitee, the
Company shall advance any and all Expenses to Indemnitee (an
“ Expense Advance ”) within thirty
(30) calendar days after the receipt by the Company of a
statement or statements from Indemnitee requesting such advance or
advances, whether prior to or after final disposition of any
Proceeding. Expense Advances shall be made without regard to
Indemnitee’s ability to repay the Expenses and without regard
to Indemnitee’s ultimate entitlement to indemnification under
the provisions of this Agreement. The Indemnitee shall qualify for
such Expense Advances solely upon the execution and delivery to the
Company of an undertaking in form and substance reasonably
satisfactory to the Company providing that the Indemnitee
undertakes to repay the Expense Advances if and to the extent that
it is ultimately determined that Indemnitee is not entitled to be
indemnified by the Company. Expesnse Advances shall include any and
all reasonable Expenses incurred pursuing an action to enforce this
right of advancement. If Indemnitee has commenced legal proceedings
in a court of competent jurisdiction in the State of Delaware to
secure a determination that Indemnitee should be indemnified under
applicable law, as provided in Section 4, any determination
made by the Reviewing Party that Indemnitee would not be permitted
to be indemnified under applicable law shall not be binding and
Indemnitee shall not be required to reimburse the Company for any
Expense Advance until a final judicial determination is made with
respect thereto (as to which all rights of appeal therefrom have
been exhausted or have lapsed). Indemnitee’s obligation to
reimburse the Company for Expense Advances shall be unsecured and
no interest shall be charged thereon.
(d)
Mandatory Indemnification . Notwithstanding any other
provision of this Agreement, to the extent that Indemnitee has been
successful on the merits in defense of any Proceeding relating in
whole or in part to an Indemnifiable Event or in defense of any
issue or matter therein, Indemnitee shall be indemnified against
all Expenses incurred in connection therewith.
(e)
Partial Indemnification . If Indemnitee is entitled under
any provision of this Agreement to indemnification by the Company
for some or a portion of Expenses, but not, however, for the total
amount thereof, the Company shall nevertheless indemnify Indemnitee
for the portion thereof to which Indemnitee is entitled.
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(a) Prior
to any Change in Control, the Reviewing Party shall be (a) the
Board acting by a majority vote of Disinterested Directors, whether
or not such majority constitutes a quorum of the Board of
Directors; (b) a committee of Disinterested Directors
designated by a majority vote of such Disinterested Directors,
whether or not such majority constitutes a quorum; or (c) if
there are no Disinterested Directors, or if the Disinterested
Directors so direct, by Independent Counsel (as described below in
Section 3(b)) in a written determination to the Board of
Directors, a copy of which shall be delivered to
Indemnitee.
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