POWERSECURE INTERNATIONAL, INC. NON-QUALIFIED STOCK OPTION AGREEMENT 2008 Stock Incentive Plan (Employees)
Exhibit 10.4
This NON-QUALIFIED STOCK OPTION AGREEMENT (this “Agreement”) is effective as of the date set
forth as the Grant Date in the attached Notice of Stock Option Grant (the “Grant Date”), by and
between PowerSecure International, Inc., a Delaware corporation (the “Company”), and the individual
named as the Optionee in the attached Notice of Stock Option Grant (the “Optionee”).
Recitals
WHEREAS, the Company has adopted the PowerSecure International, Inc. 2008 Stock Incentive Plan
(as amended and/or restated from time to time, the “Plan”); and
WHEREAS, pursuant to the provisions of the Plan, the Board of Directors of the Company, acting
directly or through its Compensation Committee (the “Board”), has authorized a grant to the
Optionee of an option to purchase shares of Common Stock, par value $.01 per share (the “Common
Stock”), of the Company on the terms and subject to the conditions set forth in this Agreement;
Agreement
NOW, THEREFORE, in consideration of the premises, the parties hereto, intending to be legally
bound hereby, agree as follows:
1. Grant of Option. Upon the terms and subject to the conditions set forth in the
Plan, this Agreement and the attached Notice of Stock Option Grant, all of which are incorporated
herein by this reference the Company grants to the Optionee the option (the “Option”) to purchase
the number of shares of Common Stock set forth on the attached Notice of Stock Option Grant (the
“Option Shares”) at the purchase price set forth on the attached Notice of Stock Option Grant (the
“Exercise Price”), which Exercise Price the Board of Directors has determined to be equal to or
greater than the fair market value of the Common Stock on the Grant Date. Unless otherwise defined
herein, all terms defined in the Plan and used in this Agreement shall have the same respective
meanings in this Agreement. The Option is not intended to qualify as an incentive stock
option under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”).
2. Vesting of Option. The Option shall vest and become exercisable in accordance with
the vesting schedule set forth in the attached Notice of Stock Option Grant (the “Vesting
Schedule”).
3. Exercise of Option. To the extent the Option has vested and become exercisable in
accordance with the Vesting Schedule, the Option may be exercised by the Optionee (or by any other
person permitted by Section 8 hereof to exercise the Option) in accordance with the following
provisions:
(a) Method of Exercise. The Option may be exercised, in whole or in part, by giving
written notice of exercise to the Company at its principal executive offices stating the number of
Option Shares to be purchased upon such exercise, accompanied by payment in full of the Exercise
Price for the Option Shares to be purchased. Payment of the Exercise Price shall be made by any of
the following methods, or a combination thereof, at the election of the Optionee:
| (i) | Cash; | ||
| (ii) | Check, bank draft or money order made payable to the Company; | ||
| (iii) | Delivery of shares of Common Stock already owned by the Optionee, surrendered in proper form for transfer and valued at their Fair Market Value (as defined in the Plan) on the date of delivery; or | ||
| (iv) | Irrevocable instructions to a securities broker or dealer acceptable to the Company to sell the Option Shares and deliver all or part of the sales proceeds to the Company. |
(b) Delivery of Certificates. After payment in full for the Option Shares purchased
pursuant to the exercise of the Option has been received, the Company shall deliver to the Optionee
(or his designee) properly executed certificates representing such Option Shares as promptly
thereafter as is reasonably practicable.
(c) Tax Withholding. In the event that the Company determines that it is required to
withhold any tax as a result of the exercise of the Option, the Optionee, as a condition to the
exercise of this option, shall make arrangements satisfactory to the Company to enable it to
satisfy all withholding requirements. The Optionee shall also make arrangements satisfactory to
the Company to enable it to satisfy any withholding requirements that may arise in connection with
the vesting or disposition of Option Shares purchased by exercising this option.
4. Expiration of the Option.
(a) Expiration Date. The Option shall expire upon the “Expiration Date” set forth in
the attached Notice of Stock Option Grant (the “Expiration Date”); provided, however, that if the
Optionee ceases to be an employee of the Company or of any Subsidiary (as defined in the Plan) of
the Company prior to the Expiration Date, then the Optionee’s right to exercise the Option, to the
extent it is otherwise then exercisable pursuant to Section 2 hereof, shall be limited as provided
in this Section 4.
(b) Death. In the event of the death of the Optionee, the Option may continue to be
exercised, to the extent the Option is otherwise exercisable on the date of the Optionee’s death
(and without any further vesting), by the Optionee’s estate, personal representative or
beneficiary, until the earlier of the Expiration Date or one year after the date of death, on which
date the Option shall expire.
2
(c) Disability. In the event the Optionee’s employment with the Company is terminated
due to a “permanent disability” of the Optionee, then the Option may continue to be exercised, to
the extent the Option is otherwise exercisable on the date of termination of employment (and
without any further vesting), until the earlier of the Expiration Date or one year after the date
of termination, on which date the Option shall expire. For purposes hereof, a “permanent
disability” shall be deemed to be the physical or mental inability of the Optionee to perform the
Optionee’s duties to the Company because of a physical or mental disability expected to last for a
continuous period of at least one year.
(d) Termination of Employment. In the event the Optionee’s employment with the
Company is terminated for any reason other than those provided in Subsections (b) or (c) above,
then the Option may continue to be exercised, to the extent the Option is otherwise exercisable on
the date of termination (and without any further vesting), until the earlier of the Expiration Date
or the date that is three months after the date of termination of Optionee’s employment, on which
date the Option shall expire. For purposes of this Agreement, an Optionee shall be deemed to be
“employed” by the Company so long as the Optionee is an employee, director, officer, consultant or
advisor of the Company or any Subsidiary (as defined in the Plan) of the Company.
(e) Transfer to Related Subsidiary. In the event the Optionee ceases to be an employee
of the Company in order to become an employee of any subsidiary of the Company, or the Optionee
ceases to be an employee of any such subsidiary in order to become an employee of the Company or of
another subsidiary of the Company, then the Optionee shall be deemed to continue as an employee of
the Company for all purposes of this Agreement.
5. Change In Control. In the event of a “Change in Control” (as defined in the Plan),
the rights of the Optionee and the terms of the Options shall be governed by the Plan.
6. Adjustments in the Common Stock.
(a) In the event that any dividend or other distribution (whether in the form of cash, Shares,
other securities or other property), recapitalization, forward or reverse stock split,
reorganization, merger, consolidation, split-up, combination, spin-off, combination, repurchase,
liquidation, dissolution, exchange of shares of Common Stock or other securities of the Company, or
other similar corporate transaction or event affects the shares of Common Stock such that an
adjustment is necessary or determined by the Board to be appropriate in order to prevent dilution
or enlargement of the Optionee’s rights under this Agreement, then the Board shall proportionately
adjust any or all of (i) the number and kind of Option Shares which may thereafter be issued in
connection with the Option; (ii) the number and kind of Option Shares issued or issuable with
respect to the outstanding Option; and (iii) the Purchase Price.
(b) The grant of this Option shall not affect in any way the right of the Company to adjust,
reclassify, reorganize, or otherwise change its capital or business structure or to merge,
consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets.
3
7. Legality of Initial Issuance.
No Option Shares shall be issued upon the exercise of this Option unless and until the Company
has determined that:
(a) the Company has taken all actions required to register the Option Shares under the
Securities Act or to perfect an exemption from the registration requirements thereof;
(b) any and all applicable listing rules, regulations and requirements of any stock exchange
or other securities market on which the Common Stock is listed or traded has been satisfied; and
(c) any other applicable provision of state or federal law has been satisfied.
8. Transferability of the Option. Except as otherwise provided in the Plan or in
this Agreement, the Option shall not be transferable in any manner by the Optionee other than as
follows:
(a) By will or the laws of descent and distribution;
(b) Pursuant to a Qualified Domestic Relations Order as defined under the Code or Title I of
the Employee Retirement Income Security Act of 1974; or
(c) Without consideration (other than in exchange for an interest in one of the following
partnerships, limited liability companies or other entities), to (i) the Optionee’s spouse,
children or grandchildren (whether by blood, adoption or step) (“Family Members”), (ii) any trust
in which Optionee and such Optionee’s Family Members have more than 50% of the beneficial
interests, or (iii) any partnership, limited liability company or other entity in which the
Optionee and such Optionee’s Family Members own more than 50% of the voting interests, provided
that (x) following any transfer of the Option pursuant to this Section 8(c), the Option shall
continue to be subject to the same terms and conditions as were applicable immediately prior to
transfer, provided that for purposes of this Agreement, any reference to the Optionee shall be
deemed to refer to the transferee, (y) in the event of a transferee’s death, the Option may be
exercised by the personal representative of the transferee’s estate or, if no personal
representative has been appointed, by the successor or successors in interest determined under the
transferee’s will or under applicable laws of descent and distribution, and (z) the events of
expiration of the Option set forth in Section 4 hereof shall continue to be applied with respect to
the original Optionee, following which the Option shall be exercisable by the transferee only to
the extent and for the period specified in Section 4 hereof.
9. Plan Controls. This Option is granted pursuant to, and shall be interpreted in a
manner consistent with, the Plan. All terms and conditions of the Plan applicable to the Option
which are not set forth in this Agreement shall be deemed to be incorporated herein by this
reference. Optionee acknowledges he has received a copy of the Plan prior to executing this
Agreement. In the event of a conflict between the terms of the Plan and the terms of this
Agreement, the terms of the Plan shall govern, be control and supersede and conflicting terms of
this Agreement.
4
10. No Rights As Stockholder Until Exercise. The Optionee shall have no rights as a
stockholder with respect to the Option Shares unless and until such time as the Optionee has
exercised the Option by delivering a properly completed and executed notice of exercise and has
paid in full the Purchase Price for the number of Option Shares for which the Option is to be so
exercised in accordance with Section 3 hereof and certificates representing the Option Shares have
been issued to the Optionee with respect thereto. Except as expressly provided in the Plan and
Section 6 hereof with respect to certain changes in the capitalization of the Company, no
adjustment in the number of Option Shares or the Purchase Price shall be made for dividends or
similar rights for which the record date is prior to such date of exercise.
11. No Right to Employment. Nothing contained in the Plan or this Agreement shall
confer, and the grant of the Option shall not be construed as conferring, upon the Optionee, any
right to continue in the employ or service of the Company or any Subsidiary of the Company or
interfering in any way with the right of the Company or any Subsidiary of the Company to (a)
terminate the Optionee’s employment or service at any time, or (b) increase or decrease the
compensation of the Optionee from the rate in existence at the time of granting the Option.
12. Compliance with Rule 16b-3. If Rule 16b-3 promulgated under the Securities
Exchange Act of 1934, as amended, or any successor provision applies to the Optionee or to the
grant of the Option pursuant to the Plan to the Optionee, then the grant of the Option hereunder is
intended to be in compliance with one or more of the exemptions provided in Rule 16b-3.
13. Miscellaneous.
(a) Notices. Any notice required or permitted to be given under this Agreement shall
be in writing and shall be deemed given when sent by first class certified or registered mail,
postage prepaid, return receipt requested, or by personal delivery, addressed as follows:
If to the Company, at its principal executive
offices; or
If to the Optionee, at the address set forth below
his signature on the attached Notice of Stock Option
Grant.
The addresses for such notices may be changed from time to time by written notice given in the
manner provided for herein.
(b) Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware, without regard to provisions governing conflicts of laws.
(c) Entire Agreement. This Agreement (along with the Plan and the Notice of Stock
Option Grant) constitutes the entire agreement and understanding between the parties hereto
regarding the subject matter hereof, and supersedes all prior written or oral agreements,
understandings and communications between the parties related to the subject matter of this
Agreement.
5
(d) Amendment. This Agreement may be modified, amended or rescinded only by a written
Agreement executed by all parties hereto.
(e) Severability. If any provision of the Plan, this Agreement or the Option is or
becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction, or would
disqualify the Plan, this Agreement or the Option under any law, this Agreement and the Option
shall be deemed amended to conform to applicable laws or, if it cannot be construed or deemed
without, in the determination of the Board, materially altering the intent of the Agreement and the
Option, it shall be deleted and the remainder of the Agreement shall remain in full force and
effect. If any of the terms or provisions of this Agreement or the Option conflict with the
requirements of applicable law or applicable rules and regulations thereunder, including the
requirements of Rule 16b-3, then such terms or provisions shall be deemed inoperative to the extent
necessary to avoid the conflict with applicable law, or applicable rules and regulations, without
invalidating new remaining provisions hereof.
(f) Successor and Assigns. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted assigns.
(g) Specific Performance and Remedies. The rights of the parties under this
Agreement are unique and, accordingly, the parties shall have the right to, in addition to any
other remedies as may be available to any of them at law or in equity, to enforce their rights
hereunder by actions for specific performance in addition to any other legal or equitable remedies
that they might have to the extent permitted by law. All rights and remedies of the Company and of
the Optionee enumerated in this Agreement shall be accumulative, and, except as expressly provided
otherwise in this Agreement, none shall exclude any other rights or remedies allowed by law or in
equity, and each of said rights or remedies may be exercised and enforced concurrently.
(h) Waivers. Any of the provisions of this Agreement may be waived by an instrument in
writing with the consent of the party or parties whose rights are being waived. Any waiver of a
breach of any provision of this Agreement shall not operate or be construed as a waiver of any
subsequent breach of that provision or of any other provision hereof.
(i) Captions. The captions contained in this Agreement are included for convenience of
reference only and do not define, limit, explain or modify this Agreement or its interpretation,
construction or meaning and are in no way to be construed as a part of this Agreement.
(j) Construction. For purposes of this Agreement, the following rules of construction
shall apply: (i) the word “or” is disjunctive but not necessarily exclusive; and (ii) the number
and gender of each pronoun shall be construed to be such number and gender as the context,
circumstances or its antecedent may require.
(End of Non-Qualified Stock Option Agreement)
6
NOTICE OF STOCK OPTION GRANT
2008 Stock Incentive Plan
2008 Stock Incentive Plan
Name of Optionee: |
||||||
Number of Option Shares: |
||||||
| Type of Option: | Non-Qualified Stock Option | |||||
Exercise Price Per Share:
|
$ | |||||
| Grant Date: | , 200__ | |||||
Vesting Schedule:
|
[ ] | 20% Per Year commencing on First Anniversary | ||||
| [ ] | 25% Per Year commencing on First Anniversary | |||||
| [ ] | 33 1/3% Per Year commencing on First Anniversary | |||||
| [ ] | 100% Immediate | |||||
| [ ] | 20% Per Year commencing on Grant Date | |||||
| [ ] | 25% Per Year commencing on Grant Date | |||||
| [ ] | 33 1/3% Per Year commencing on Grant Date | |||||
| [ ] | Performance Vesting (See attached Vesting Schedule) | |||||
| [ ] | Other (See attached Vesting Schedule) | |||||
Expiration Date:
|
[ ] | Ten Years from Grant Date | ||||
| [ ] | ___ Years from Grant Date | |||||
By their execution of this Notice of Stock Option Grant, the Company and the Optionee agree
that this Option is granted under and governed by the terms and conditions of the PowerSecure
International, Inc. 2008 Stock Incentive Plan (as amended and restated from time to time) and the
Stock Option Agreement attached to this Notice.
| POWERSECURE INTERNATIONAL, INC. | ||||
By: |
||||
Its: |
||||
| OPTIONEE: | ||||||||
| Signature | ||||||||
| Street Address | ||||||||
| City | State | Zip Code | ||||||
7
Vesting Schedule
| Vesting Date(s) or Performance Condition(s) | Vesting Percentage |
8