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Exhibit 10.3 AMENDED AND RESTATED
EMPLOYMENT AND NON-COMPETITION AGREEMENT
This AMENDED AND RESTATED
EMPLOYMENT AND NON-COMPETITION AGREEMENT (this "
Agreement ") is made and entered into as of
December 31, 2008 by and between PowerSecure International,
Inc. , a Delaware corporation (the " Company "), and
Gary J. Zuiderveen , an individual who resides in Denver,
Colorado (" Officer "). Recitals
WHEREAS, Officer is the Vice
President of Financial Reporting, Principal Accounting Officer and
Controller of the Company; and
WHEREAS, the Company and Officer
entered into an Employment and Non-Competition Agreement on
April 16, 2007, which was amended on December 10, 2007,
setting 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 achieve compliance with Section 409A of the Internal
Revenue Code of 1986, as amended (as amended, modified or
supplemented from time to time, " Section 409A "), and
the Treasury Regulations promulgated thereunder (as amended,
modified or supplemented from time to time); and
WHEREAS, the continued involvement of
Officer in the Company’s ongoing business is vital to the
success of the Company; 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 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
thirty (30) 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
of Financial Reporting, Principal Accounting Officer and Controller
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, and shall have such other duties as may be assigned
to him from time to time by the Board, by the Chief Executive
Officer of the Company (the " CEO ") or by the Chief
Financial Officer of the Company (the " CFO "). 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, the CEO and the CFO 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 offices in Denver, Colorado 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 $195,000 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
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reviewed by or under the authority of the Board no less
frequently than annually and may be increased (but never decreased)
in the sole discretion of the Board or its designee (although the
Board has no obligation to do so) based upon whatever factors the
Board or its designee 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 Performance Bonus . Officer shall be
eligible to receive a bonus in a target amount of 25% 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)
Officer 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 the 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.
(d)
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.
(e)
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.
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(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. 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 (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,
par value $.01 per share, of the Company (the " Stock
Options ") 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 duties
hereunder, or the breach by Officer of any of his obligations,
covenants, representations, warranties or acknowledgments
hereunder, which failure, refusal or breach remains unremedied or
uncured for a period of twenty (20) business days after
specific written notice thereof is given to Officer by the Board or
the CEO;
(ii) Any
act of dishonesty, disloyalty, insubordination, 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 impairs Officer’s
ability to perform his duties hereunder or damages the reputation
or business of the Company. Notwithstanding any other provision of
this Section 5(c) to the contrary, for purposes of this Agreement,
Cause does not mean or include a bona fide dispute over accounting
principles or policy that does not involve fraud, other intentional
misconduct, or a material violation of any law, rule or regulation
applicable to the Company or Officer.
(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 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, as
defined, computed and payable as provided in Section 5(j);
(iii) an amount equal to the Separation Bonus,
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computed and payable as provided in Section 5(k); 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.
(e)
Termination by Officer . Officer agrees not to
voluntarily terminate his employment hereunder except by giving at
least sixty (60) days written notice to the Company, except as
provided in Section 4(f). 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; 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 Good
Reason (as defined in below), 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;
(III) the Separation Bonus; and (IV) 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 (2) years, 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
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longer an employee of the Company, then the Company itself
shall, to the extent necessary, pay or provide for payment of
benefits to Officer and/or Officer’s family, or where
applicable, pay or provide to Officer and/or Officer’s family
the difference between the benefits payable pursuant to this
Section 5(f) and the benefits actually payable pursuant to the
terms of such plans, in each case at the time such payments would
be payable pursuant to the terms of such plans, programs and
policies.
(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; provided,
however, that the following acquisitions shall not constitute a
Change in Control: (I) any acquisition directly from the
Company (excluding an acquisition by virtue of the exercise of a
conversion privilege), (II) any acquisition by the Company or
any subsidiary of the Company, or (III) any acquisition by any
employee benefit plan (or related trust) for employees or any
subsidiary of the Company; or (B) Individuals who, as of the
date hereof, 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, provided that any person becoming a
director subsequent to the date hereof whose election, or
nomination for election by the Company’s stockholders, was
approved by a vote of at least three-fifths of the directors then
comprising the Incumbent Board (other than an election or
nomination of an individual whose initial assumption of office is
in connection with an actual or threatened election contest
relating to the election of the directors of the Company, as such
terms are used in Rule 14a-11 of Regulation 14A promulgated
under the Exchange Act) shall be, for purposes of this Agreement,
considered as though such individual were a member of the Incumbent
Board; or (C) Approval by the Company of a reorganization,
merger, combination, or consolidation, in each case, unless,
following such reorganization, merger, combination, or
consolidation, (I) more than 50% of, respectively, the then
outstanding shares of common stock of the Company or other entity
resulting from such reorganization, merger, combination or
consolidation and the aggregate voting power of the then
outstanding voting securities of the resulting corporation or other
entity entitled to vote generally in the election of directors is
then beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the
beneficial owners, respectively, of the outstanding Common Stock
and outstanding voting securities of the Company immediately prior
to such reorganization, merger, combination, or consolidation, in
substantially the same proportion as their ownership immediately
prior to such reorganization, merger, combination, or
consolidation, and (II) at least a majority
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of the members of the board of directors of the corporation or
other entity resulting from such reorganization, merger,
combination or consolidation were members of the Incumbent Board at
the time of the execution of the initial agreement providing for
such reorganization, merger, combination or consolidation; or
(D) Approval by the Company of the sale or other disposition
of all or substantially all of the assets of the Company, other
than to a corporation or other entity with respect to which
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