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Exhibit
10.1
EMPLOYMENT AND
NON-COMPETITION AGREEMENT
This Employment and
Non-Competition Agreement (this “Agreement”), is dated
as of the 11th day of February, 2008 (the “Signing
Date”) and is entered into by and between Nexxus Lighting,
Inc. , a Delaware corporation (the “Employer”) and
Michael A. Bauer (the “Employee”).
W I T
N E S S E T H
:
WHEREAS , Employee
desires to continue his employment with the Employer and the
Employer desires to continue to employ Employee upon the terms and
conditions hereinafter set forth.
NOW, THEREFORE , in
consideration of the premises and other good and valuable
consideration, receipt and sufficiency of which is hereby
acknowledged, the Employee and the Employer agree as
follows:
Section 1. Employment of
Employee
(a) Term.
Employee’s employment hereunder will commence effective as of
January 1, 2008 (the “Effective Date”) and will
expire on December 31, 2010 (the “Initial Term”).
Employment of Employee will be extended automatically for
successive one-year periods thereafter (each a “Renewal
Term”; and together with the Initial Term, collectively, the
“Term”), unless either party gives at least ninety
(90) days’ written notice to the other party of its
desire to terminate this Agreement prior to the end of the Initial
Term or any Renewal Term, as the case may be (“Non-Renewal
Notice”). During such 90-day notice period, the Employee
agrees to continue to provide services under this Agreement. The
Employee’s employment hereunder may be terminated sooner than
the expiration of the Term pursuant to the terms and conditions
described below in Section 2. If either party provides written
notice to the other party of its desire to terminate this Agreement
at least ninety (90) days prior to the expiration of the
Initial Term or any Renewal Term, upon the expiration of the
Initial Term or any Renewal Term, as applicable, this Agreement
shall terminate. The provisions of this Agreement that may be
reasonably interpreted as surviving termination of this Agreement,
including without limitation Sections 2 and 3, shall continue in
effect after termination of this Agreement. The date on which
Employee ceases to be employed by Employer, regardless of the
reason therefore is referred to in this Agreement as the
“Date of Termination.”
(b) Duties and
Responsibilities . From the Effective Date until
December 31, 2010, Employee will continue to serve as
President and Chief Executive Officer of Employer, or in such other
positions as assigned by Employer with Employee’s consent
from time to time. Employee agrees to apply his best efforts,
entire productive time, attention, and energies to the business of
Employer and shall assume and perform such reasonable
responsibilities and duties as may be assigned to him from time to
time by the Board of Directors of Employer (the
“Board”). To the extent that the Employer shall have
any parent, subsidiaries, affiliated corporations, partnerships, or
joint ventures (collectively “Related Entities”),
Employee shall perform such duties to promote these entities and
their respective interests to the same extent as the interests of
the Employer and without additional compensation. At all times
during the Term, Employee agrees to abide by any employee handbook,
policy, or practice that the Employer has established with respect
to its employees. Notwithstanding the foregoing,
Employee shall be permitted to engage in
charitable and civic activities and manage his personal passive
investments, provided that such activities (individually or
collectively) do not materially interfere with the performance of
his duties or responsibilities under this Agreement.
(c) Location . The
location at which Employee shall perform services for Employer
shall be 124 Floyd Smith Drive, Suite 300, Charlotte, NC 28262, or
such other principal office of Employer as shall be established by
the Board from time to time. Employer may require Employee to
travel extensively to other locations on Employer’s
business.
(d) Compensation.
During the Term, as full compensation for his services hereunder
and in consideration for the Employee’s covenants contained
in this Agreement, the Employer shall pay the Employee a base
salary at the per annum rate of $215,000 payable in accordance with
the customary payroll practices of the Employer (“Base
Salary”). Commencing upon the first day of the calendar
quarter immediately succeeding the first calendar quarter during
the Term for which Employer reports net income in its publicly
filed financial statements, Employee’s Base Salary shall
increase to $235,000 (prorated for the remaining portion of the
applicable calendar year). Also during the Term, Employee shall be
eligible to receive performance bonus compensation in accordance
with the terms and conditions set forth on Schedule 1
attached hereto. After the Initial Term, performance bonus
compensation, if any, shall be based upon performance criteria to
be determined by the Board or the compensation committee of the
Board (the “Compensation Committee”) after consultation
with Employee. Based on Employee’s annual performance review
by the Compensation Committee, Employee may be eligible for future
salary increases depending on various factors, such as the
Employer’s performance and Employee’s satisfactory job
performance, provided that in no event may Employee’s annual
salary adjustment be less than 3% per annum for the Initial
Term.
(e) Stock Options
.
(i) On the Signing Date, Employer
shall grant Employee an option to purchase 75,000 shares of
Employer’s common stock at an exercise price equal to the
fair market value of such shares on the Signing Date. Subject in
all instances to Employee’s continued employment with
Employer through December 31, 2008, and provided that the
revenue and net operating income before taxes milestones set forth
in Employer’s 2008 Board approved operating plan are achieved
this option shall vest as to 25,000 shares subject to such option
on January 15, 2009 and 50,000 shares on March 31, 2009,
respectively.
(ii) Subject in all instances to
Employee’s continued employment with Employer, on
January 4, 2009, Employer shall grant Employee an option to
purchase 75,000 shares of Employer’s common stock at an
exercise price equal to the fair market value of such shares on the
date of grant. Subject in all instances to Employee’s
continued employment with Employer through December 31, 2009,
and provided that the revenue and net operating income before taxes
milestones set forth in Employer’s 2009 Board approved
operating plan are achieved this option shall vest as to 25,000
shares subject to such option on January 15, 2010 and 50,000
shares on March 31, 2010, respectively.
(iii) Subject in all instances to
Employee’s continued employment with Employer, on
January 4, 2010, Employer shall grant Employee an option to
purchase 75,000 shares of Employer’s common stock at an
exercise price equal to the fair market value of such shares on the
date of grant. Subject in all instances to Employee’s
continued employment with Employer through December 31, 2010,
and provided that the revenue and net operating income before taxes
milestones set
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forth in Employer’s 2010 Board
approved operating plan are achieved this option shall vest as to
25,000 shares subject to such option on January 15, 2011 and
50,000 shares on March 31, 2011, respectively.
If a revenue and net operating income
before taxes milestone is not achieved, but Employer achieves at
least 25% of such milestone, than an option shall vest with respect
to a corresponding pro rata percentage of shares on the relevant
vesting date. For example, if Employer achieves 50% of the targeted
net operating income before taxes milestone for 2008, 25,000, or
50%, of the shares subject to the applicable option shall vest on
March 31, 2009. All such options shall be subject to the terms
and conditions of Employer’s stock option plan pursuant to
which the options are granted and shall be conditioned upon
Employee’s execution of a stock option agreement with
Employer in the form specified by the Compensation
Committee.
(f) Expenses
. Employer agrees to pay or reimburse Employee for all
reasonable vouchered business expenses incurred during his
employment which have been submitted in accordance with any expense
reimbursement policy or practice of the Employer.
(g) Benefits .
Employer will provide to the Employee and, to the extent eligible,
his dependents, any benefit, including without limitation, medical
insurance program reimbursement, 401k savings plan, etc., which are
provided by Employer generally to its employees, subject to the
provisions of the various benefit plans, programs, or policies in
effect from time to time. Employer reserves the right to change or
eliminate these benefits at any time.
(h) Vacation; Personal
Days . During the Term, Employee shall be entitled to
twenty (20) days paid vacation annually, three
(3) personal/sick days and as many holidays as are in
accordance with Employer’s policy then in effect generally
for its employees.
(i) Life Insurance.
Employee agrees that Employer shall have the right to obtain life
insurance on Employee’s life, at Employer’s sole
expense and with Employer as the sole beneficiary thereof. Employee
shall (i) cooperate fully with Employer in obtaining such life
insurance, (ii) sign any necessary consents, applications and
other related forms or documents, and (iii) take any required
medical examinations.
(j) Car Allowance. During the
Term, Employer will provide Employee with a monthly car allowance
of $1,000 to cover the costs of insuring and maintaining an
automobile for use in the business of Employer.
Section 2. Termination of
Employment
(a) Termination by the
Employer . The Employer may terminate the employment
of Employee at any time, with or without cause, upon ninety
(90) days prior written notice. If the Employee’s
employment is terminated by Employer for any reason other than
Disability or Cause (as such terms are defined below), including
the termination of Employee’s employment upon expiration of
the Initial Term or any Renewal Term pursuant to a Non-Renewal
Notice delivered by Employer to Employee, Employee shall receive
(i) twelve months’ Base Salary payable in accordance
with the customary payroll practices of Employer over the twelve
month period immediately following the Date of Termination,
(ii) any unpaid reimbursable expenses outstanding as of the
Date of Termination and (iii) payment for accrued and unused
benefits as
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of the Date of Termination such as
vacation. In the event of a termination of Employee’s
employment by Employer for Cause (as defined below), Employee shall
receive unpaid Base Salary through, and any unpaid reimbursable
expenses outstanding as of, the Date of Termination and payment for
accrued and unused benefits as of the Date of Termination such as
vacation. If Employee’s employment with Employer is
terminated by Employer for any reason, or no reason, all of the
restrictions contained in Section 3 shall survive the
expiration or termination of Employee’s employment in
accordance with the terms set forth therein. Except as set forth in
this paragraph, if Employee’s employment with Employer is
terminated by the Employer, following the Date of Termination the
Employer shall have no further obligations under this
Agreement.
“Cause” shall be limited to
the following: (i) Employee’s refusal to perform his
duties in a satisfactory manner as contemplated by this Agreement;
(ii) dishonesty or other acts by Employee that adversely
affect Employer; (iii) a violation of Employer’s
policies or practices which justifies immediate termination;
(iv) arrest or conviction of a felony or of any crime
involving moral turpitude, fraud or misrepresentation; (v) the
commission by Employee of any act which could reasonably be
expected to injure the reputation, business, or business
relationships of Employer or any Related Entities; or (vi) any
material breach of this Agreement.
(b) Termination by
Employee. Employee agrees to provide Employer with at least
ninety (90) days’ prior written notice of his intent to
terminate his employment (“Termination Notice Period”).
Failure to provide such notice terminates Employee’s
entitlement to payment for accrued, unused benefits, such as
vacation. In the event of a termination of Employee’s
employment by Employee, including the termination of
Employee’s employment upon expiration of the Initial Term or
any Renewal Term pursuant to a Non-Renewal Notice delivered by
Employee to Employer, Employee shall receive unpaid Base Salary
through, and any unpaid reimbursable expenses outstanding as of,
the Date of Termination and payment for accrued and unused benefits
as of the date of Termination such as vacation. If Employee’s
employment with Employer is terminated by Employee for any reason,
or no reason, all of the restrictions contained in Section 3
shall survive the expiration or termination of Employee’s
employment in accordance with the terms set forth therein. Employer
reserves the right to terminate Employee before the end of the
Termination Notice Period provided that Employee shall receive the
Base Salary that he would have received from the date of the last
payroll payment to the end of the Termination Notice Period and any
unpaid reimbursable expenses outstanding as of the Date of
Termination and payment for accrued and unused benefits as of the
Date of Termination such as vacation. During the Termination Notice
Period, the Employee agrees to provide services under this
Agreement using his best efforts. Except as set forth in this
paragraph, if Employee’s employment with Employer is
terminated by Employee, following the Date of Termination, the
Employer shall have no further obligations under this
Agreement.
(c) Termination Due to
Death or Disability . If Employee’s
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