EXHIBIT 10.25
EMPLOYMENT AND NON-COMPETITION AGREEMENT
THIS EMPLOYMENT AND NON-COMPETITION AGREEMENT (this "Agreement") is
made and entered into as of January 1, 2003 by and between PowerSecure, Inc., a
Delaware corporation (the "Company"), and ▇▇▇▇▇▇ ▇▇▇▇▇▇, an individual who
presently resides in Wake Forest, North Carolina ("Employee").
W I T N E S S E T H:
WHEREAS, the Company desires to employ Employee, and Employee desires
to serve the Company, upon the terms and subject to the conditions set forth
herein; and
WHEREAS, the Company and Employee desire to set forth the terms and
conditions of such employment in this 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 Employee, intending to be legally bound hereby, agree as follows:
SECTION 1. EMPLOYMENT. The Company hereby employs Employee, and
Employee hereby accepts such employment and agrees to serve the Company, upon
the terms and subject to the conditions set forth herein.
SECTION 2. TERM. The term of Employee's employment hereunder shall
commence on the date first above written and shall expire three (3) years from
such date, 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 Employee's employment
hereunder shall be automatically extended without further action by the Company
or Employee 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 Employee's employment hereunder,
including any extension period, is sometimes hereinafter referred to as the
"Employment Term."
SECTION 3. DUTIES OF EMPLOYEE.
(a) GENERAL DUTIES AND RESPONSIBILITIES. During and throughout
the Employment Term, Employee shall faithfully and diligently, to the best of
his ability, serve as the President and Chief Executive Officer and a member of
the Board of Directors 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 or by the Chairman of the Board of the Company
(the "Chairman"). Employee 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. Employee shall use his best
efforts to promote the best interests of the Company. Employee shall always be
subject to the direction, approval and control of the Board and the Chairman in
the performance of his duties. Employee 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, Employee shall devote his full time, attention, skill, ability
and energy during normal business hours (and outside such hours when reasonably
necessary to perform Employee's duties hereunder) exclusively to the business
and affairs of the Company and the performance of his duties under this
Agreement. Employee shall not, directly or indirectly, render any services of a
business, commercial or professional nature to any person or organization
without the prior written consent of the Board; provided, however, that the
provisions this Section 3(b) shall not preclude Employee from devoting time,
ability, energy and attention outside normal
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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 Employee's duties hereunder and are not adverse to the business
or best interests of the Company.
(c) PLACE OF EMPLOYMENT. Employee 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 Employee 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 Employee's duties hereunder.
SECTION 4. COMPENSATION. During and throughout the Employment Term, as
compensation for the services performed and other covenants made by Employee to
the Company hereunder, the Company shall pay and provide or cause to be provided
to Employee the following:
(a) BASE SALARY. The Company shall pay Employee a base salary
equal to $250,000 per year (the "Base Salary"), payable in approximately equal
installments in accordance with the Company's customary payroll practices.
Employee's Base Salary may be reviewed by or under the authority of the Board
and may be increased (but never decreased) at 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, Employee'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,
Employee shall be entitled to receive the following bonuses:
(i) CASH FLOW BONUS. Employee shall be entitled to
receive a bonus in the amount of 7% of the Company's "Cash Flow from Operations"
(the "Cash Flow Bonus") for each fiscal year of the Company during the
Employment Term, on the following terms and conditions:
(A) The Company's "Cash Flow from
Operations" for any fiscal year shall be an amount equal to the Company's net
income (loss) before taxes, depreciation and amortization but after interest
(including interest reasonably allocated by Metretek Technologies, Inc., a
Delaware corporation and the corporate parent of the Company ("Metretek") from
its interest cost due to the Company's use of funds from Metretek's credit
facility) during such fiscal year, determined in accordance with generally
accepted accounting principles consistently applied, adjusted to exclude (I) all
items of income, gain, loss or expense during such fiscal year determined by the
Board to be extraordinary or unusual in nature and not incurred or realized in
the ordinary course of business, whether or not such items would otherwise be
considered to be extraordinary or unusual in accordance with generally accepted
accounting principles, and (II) any profit or loss attributable to the business
operations of any entity acquired by the Company during such fiscal year, and
shall be determined by the Board in its sole discretion based upon the Company's
financial statements for such fiscal year.
(B) The Company shall pay any Cash Flow
Bonus within 90 days after the expiration of a Cash Flow Bonus Period. In the
event that the Company's Cash Flow from Operations during any fiscal year is
negative, then Employee shall not be entitled to any Cash Flow Bonus for such
fiscal year under any circumstances.
(C) In order to be entitled to receive the
Cash Flow Bonus for any fiscal year, Employee must not have been terminated by
the Company for "Cause" or have voluntarily terminated his employment with the
Company during such fiscal year.
(ii) GENERAL BONUS PROGRAM. If the Company shall
adopt a bonus program or any other form of profit-sharing participation for
senior executive officers of the Company, Employee shall be eligible to
participate in such program in a manner and capacity commensurate with his
position and duties.
(c) POWERSECURE SHARES. In consideration in part for inducing
Employee to enter into this Agreement and to perform his services hereunder, the
Company shall issue to Employee shares of its common stock (the "PowerSecure
Shares") constituting in the aggregate 7% of the issued and outstanding
PowerSecure Shares as of the date hereof. All PowerSecure Shares shall be issued
subject to the terms and conditions of a Shareholders' Agreement, in
substantially the form attached hereto as Exhibit A, which contains certain
rights and restrictions on the PowerSecure Shares. Employee shall also be
involved in the Company's allocation of up to an additional 8% of the issued and
outstanding PowerSecure Shares as of the date hereof to other employees of the
Company.
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(d) EMPLOYEE BENEFIT PLANS. Employee 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 Employee for the elimination of any such employee
benefit plans or arrangements.
(e) EXPENSES. The Company shall, upon presentment by Employee
of appropriate receipts and vouchers therefor, reimburse Employee for all
reasonable, ordinary and necessary out-of-pocket business expenses incurred by
Employee 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.
(f) VACATION. Employee 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 hereof, the Employment Term and Employee's employment hereunder
shall terminate as follows:
(a) DEATH. Employee's employment hereunder shall automatically
terminate upon his death, and the Company shall pay to his designated
beneficiary (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, plus an amount equal to the Base Salary at the rate in effect on the date
of death for a period of twelve (12) months, payable in approximately equal
installments in accordance with the Company's customary payroll practices over
the subsequent twelve (12) months.
(b) DISABILITY. The Company shall have the right, in its sole
discretion, to terminate Employee's employment hereunder in the event of
Employee's "Disability" upon giving at least 30 days written notice to Employee
of its intention to terminate Employee's employment. In such event, the Company
shall pay to Employee the pro rata portion of his Base Salary and all other
accrued and vested but unpaid compensation through the date of termination, plus
an amount equal to the Base Salary at the rate in effect on the date of
termination for a period of twelve (12) months, payable in approximately equal
installments in accordance with the Company's customary payroll practices over
the subsequent twelve (12) months. For purposes of this Agreement, "Disability"
means the physical or mental inability of Employee, 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 Employee's employment hereunder at
any time for "Cause" immediately upon giving written notice of termination to
Employee. Upon his termination for Cause, Employee 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 as of such date, but
Employee shall not be entitled to any other bonus or incentive compensation for
the 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
"Metretek Stock Options") shall expire without vesting. Employee 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 Employee to perform
any of his duties hereunder, or the breach by Employee 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 Employee by the Board or the Chairman;
(ii) Any act of dishonesty, disloyalty,
insubordination, fraud, breach of fiduciary duty or bad faith by Employee that
is materially detrimental to the Company or that results in substantial personal
enrichment of Employee; or
(iii) The conviction of Employee, or the entering of
a guilty plea or a plea of no contest by Employee with respect to (A) a felony,
or (B) a misdemeanor that involves theft, fraud or dishonesty, results in
Employee's imprisonment or impairs Employee's ability to perform his duties
hereunder or damages the reputation or business of the Company.
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(d) BY THE COMPANY WITHOUT CAUSE. The Company shall have the
right, in its sole discretion, to terminate Employee's employment hereunder at
any time effective upon the giving of written notice of such termination to
Employee (or at such later date as the notice provides). In such event, Employee
shall be entitled to receive (i) all amounts of the Base Salary and any bonuses
that are accrued but unpaid through the date of termination, (ii) an amount
equal to the Base Salary at the rate in effect on the date of termination for a
period of twelve (12) months, payable in approximately equal installments in
accordance with the Company's customary payroll practices over the subsequent
twelve (12) months, (iii) any rights and benefits of any of the employee
benefits accruing to him (including 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 Employee shall not attain vested status in any plans or
benefits in which he is not vested on the date of termination (except as
provided in clause (iv) below), and (iv) the Metretek Stock Options shall
immediately vest and become exercisable and remain exercisable for the periods
set forth in the respective stock option agreements.
(e) TERMINATION BY EMPLOYEE.
(i) VOLUNTARY TERMINATION. Employee 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(e)(ii)
below. Upon such voluntary termination by Employee, Employee shall be entitled
to receive only the accrued but unpaid portion of his Base Salary (but not any
bonus) through the date of termination and the accrued and vested rights and
benefits under any Employee benefits plan which he was entitled to receive at
the date of such termination, subject to the terms and conditions of such plans.
Any unvested portion of the Metretek Stock Options shall expire without vesting.
(ii) NORMAL RETIREMENT. In the event Employee
retires from employment with the Company on or after the age of sixty-five (65),
then Employee shall be entitled to receive (i) all amounts of the Base Salary
and any bonuses that are accrued but unpaid through the date of retirement, (ii)
an amount equal to the Base Salary at the rate in effect on the date of
retirement for a period of twelve (12) months, payable in approximately equal
installments in accordance with the Company's customary payroll practices over
the subsequent twelve (12) months, (iii) any rights and benefits of any of the
employee benefits accruing to him (including any plans in which he was
participating) as of the date of such retirement, subject to the terms and
conditions of such plans and benefits, but Employee shall not attain vested
status in any plans or benefits in which he is not vested on the date of
retirement, and (iv) any unvested portion of the Metretek Stock Options shall
expire without vesting.
(f) COMPENSATION UPON TERMINATION OF EMPLOYMENT FOLLOWING A
CHANGE IN CONTROL.
(i) AMOUNT OF COMPENSATION. If, during the
Employment Period, a "Change in Control" (as defined below) of either the
Company or Metretek occurs, and within three years after such date the Company
shall terminate Employee's employment without "Cause" or the employment of
Officer shall be terminated by Employee for "Good Reason" (as defined in below),
then:
(A) The Company shall pay to Employee 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; and
(II) One times Employee's annual Base Salary at the
rate in effect on the date the notice of termination
was given; and
(III) In the case of compensation previously deferred
by Employee, all amounts of such compensation
previously deferred and not yet paid by the Company;
and
(B) The Company shall, promptly upon submission by Employee
of supporting documentation, pay or reimburse to Employee all
costs and expenses paid or incurred by Employee prior to the
date of termination which would have been payable under this
Agreement if Employee's employment had not terminated; and
(C) For a period of one year from the date of termination,
Employee and his family shall be permitted to continue to
participate in all life, accidental death, disability,
medical, dental and other
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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 Employee is no longer an employee
of the Company, then the Company itself shall, to the extent
necessary, pay or provide for payment of benefits to
Employee and/or Employee's family, or where applicable, pay
or provide to Employee and/or Employee'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 either the Company or
Metretek (each a "Corporation" in this Section 5 (f)(ii) 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 Corporation's
then outstanding voting securities entitled to vote generally
in the election of directors of the Corporation; provided,
however, that the following acquisitions shall not constitute
a Change in Control: (I) any acquisition directly from the
Corporation (excluding an acquisition by virtue of the
exercise of a conversion privilege), (II) any acquisition by
the Corporation or any subsidiary of the Corporation, or (III)
any acquisition by any employee benefit plan (or related
trust) for employees or any subsidiary of the Corporation; or
(B) Individuals who, as of the date hereof, constitute the
Board of Directors of the Corporation (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
Corporation'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 Corporation, 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 Corporation 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 corporation 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 Corporation 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 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 Corporation of the sale or other
disposition of all or substantially all of the assets of the
Corporation, other than to a corporation or other entity with
respect to which following such sale or other disposition the
conditions described in clauses (I) and (II) of Section 5
(f)(ii)(c) are satisfied.
(iii) DEFINITION OF GOOD REASON. For purposes of
this Agreement, "Good Reason" means:
(A) (I) The assignment to Employee of any position, authority,
duties or responsibilities inconsistent in any respect with
Employee's position (including, without limitation, status,
offices, title and reporting requirements), authority, duties
or responsibilities, prior to the Change in Control, or (II)
any other action by the Corporation which results in a
diminution in such position, authority, duties or
responsibilities,
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other than an insubstantial and inadvertent action which is
remedied by the Corporation promptly after receipt of notice
thereof given by Employee;
(B) Any reduction in Employee's base salary or in the extent
of Employee's entitlement to the employee benefits, expenses,
fringe benefits or perquisites referred to in Section 3;
(C) The Corporation's requiring Employee to be based at an
office location or to maintain his personal residence other
than where it is on the date of the change in control;
(D) The failure of the Corporation to obtain a satisfactory
agreement from any successor to the Corporation to assume and
agree to perform this Agreement;
(E) The imposition on Employee of business travel obligations
substantially greater than his business travel obligations
during the fiscal year prior to the Change in Control;
(F) Any purported termination by the Corporation of Employee's
employment other than as expressly permitted by this
Agreement; or
(G) Any other failure by the Corporation to comply with any
provision of this Agreement, other than an insubstantial and
inadvertent failure which is remedied by the Corporation
promptly after receipt of notice thereof given by Employee.
(g) EXPIRATION OF EMPLOYMENT TERM. In the event of the
expiration of the Employment Term (including any renewal or extension period
hereunder) without further renewal or extension, Employee shall be entitled to
receive (i) all amounts of the Base Salary and any bonuses that are accrued but
unpaid through the date of expiration, (ii) an amount equal to the Base Salary
at the rate in effect on the date of expiration for a period of twelve (12)
months, payable in approximately equal installments in accordance with the
Company's customary payroll practices over the subsequent twelve (12) months,
(iii) any rights and benefits of any of the employee benefits accruing to him
(including any plans in which he was participating) as of the date of such
expiration, subject to the terms and conditions of such plans and benefits, but
Employee shall not attain vested status in any plans or benefits in which he is
not vested on the date of expiration, and (iv) any unvested Metretek Stock
Options shall expire without vesting.
(h) NO FURTHER OBLIGATION TO EMPLOYEE. The payments and
benefits (if any) required to be made or provided to Employee pursuant to this
Section 5 shall be in full and complete satisfaction of, and shall constitute
the full settlement and release of the Company by Employee with regard to all
obligations of the Company owed to Employee pursuant to this Agreement. After
the date of termination of Employee's employment hereunder, the Company shall
have no further obligations to Employee under this Agreement except as otherwise
set forth herein.
(i) SURVIVAL OF EMPLOYEE'S OBLIGATIONS. Notwithstanding the
termination of this Agreement by either party hereto for any reason, the
obligations of Employee under Section 6 hereof and the other provisions thereof
shall survive the termination or expiration of this Agreement or Employee's
employment hereunder and shall remain in full force and effect for the period
provided therein.
SECTION 6. COVENANTS. In consideration in part for the compensation to
be paid to Employee hereunder by the Company, and in order to induce the Company
to enter into this Agreement, Employee hereby makes the following covenants to
the Company:
(a) COVENANT NOT TO COMPETE. During the Employment Term and
for a period of one (1) year thereafter (or if the Company for any reason
defaults for a period of sixty (60) days in its severance obligations to
Employee under Section 5 hereof, upon the expiration of such default period), or
for a period of two (2) years thereafter if the termination of Employee's
employment hereunder is due to either termination by the Company for "Cause" or
voluntary termination by Employee (the "Restricted Period"), Employee shall not,
directly or indirectly, alone or in association with others, whether as owner,
shareholder, employee, Employee, director, partner, manager, member, lender,
investor, consultant, principal, agent, independent contractor, co-venturer or
in any other capacity, invest in, engage in, have a financial interest in, be in
any other way connected or affiliated with, or render advice or service to, any
Person that is in competition with the Company in the United States or in any
other country in which the Company does a material amount of business or
otherwise has material operations.
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(i) COMPETITION WITH THE COMPANY. For purposes of
this Agreement, (A) the phrase "in competition with the Company" shall be deemed
to include competition with the Company and its subsidiaries and Affiliates, or
their respective successors or assigns, or the businesses of any of them, and
(B) a business shall be deemed to be in competition with the Company if it is
engaged in any business activity or has products or services that are the same
or similar to the business activities, products or services of the Company
during the Employment Term. Notwithstanding the foregoing, nothing herein
contained shall prevent Employee from acquiring and holding for investment up to
two percent (2%) of any class of securities of any corporation, if such
securities are listed or traded on a national securities exchange or the Nasdaq
Stock Market or in the over-the-counter market.
(ii) INTERPRETATION OF COVENANT. The parties hereto
acknowledge and agree that the duration and area for which the covenant not to
compete set forth in this Section 6(a) is to be effective are fair and
reasonable and are reasonably necessary for the protection of the Company and
its business and good will, and Employee hereby waives any objections to or
defenses in respect thereof. In the event that any court determines that any
portion of the time period or the area, or both of them, are unreasonable,
arbitrary or against public policy, and that such covenant is to such extent
unenforceable, illegal or invalid, the parties hereto agree that this Section
6(a) shall be deemed amended to delete therefrom such provisions or portions
adjudicated to be unenforceable, illegal or invalid so that the covenant shall
remain in full force and effect for the greatest time period and in the greatest
geographical area that would render it enforceable, legal and valid. The parties
intend that the covenant set forth in the Section 6(a) shall be deemed to be a
series of separate covenants, one for each and every county of each and every
state of the United States of America and one for each and every political
subdivision of each and every other country where the covenant is intended to be
effective and is not proscribed by law.
(b) COVENANT REGARDING DISCLOSURE OR USE OF CONFIDENTIAL
INFORMATION.
(i) Employee acknowledges that during the Employment
Term and as a result of his employment by the Company, he will learn, obtain and
have access to confidential and proprietary information regarding the business
and affairs of the Company and its Affiliates. Employee hereby agrees that at
all times during and after the Employment Term he shall keep strictly
confidential and hold in confidence all Confidential Information (as defined
below), and shall not, directly or indirectly, use any Confidential Information
for Employee's own benefit or for the benefit of any other Person or divulge,
disclose, communicate or otherwise reveal any Confidential Information to any
Person in any manner whatsoever, other than to the directors, employees and
agents of the Company, and then only in the course of the Company's affairs to
the extent necessary for them to perform services to and responsibilities on
behalf of the Company.
(ii) As used herein, "Confidential Information"
means any and all information, however documented, which is confidential
property or otherwise non-public, related to the business and affairs of the
Company and its Affiliates, including, but not limited to, their assets,
properties, operations, finances, practices, procedures, policies, methods,
contracts, agreements and arrangements, lending policies, pricing policies,
price lists, financial plans, business plans, financial information, financial
projections, budgets, marketing strategies and techniques; the identity and
location of all past, present and prospective customers, suppliers, affiliates,
debtors, creditors, lenders, employees, consultants, advisors, agents,
distributors, wholesalers, clients and others who have dealings with the
Company; trade secrets, processes, photographs, graphics, product
specifications, formulas, compositions, samples, inventions, ideas, research and
development; patents, patent applications; copyrights and copyright applications
(in any such case, whether registered or to be registered in the United States
or any foreign country) applied for, issued to or owned by the Company; any and
all processes, computer programs and software (including object code and source
codes, database, technologies, engineering or technical data, drawings, sketches
or designs, manufacturing or distribution methods or techniques; and any other
information known to Employee to be confidential, proprietary, secret or
otherwise non-public information.
(iii) Employee hereby acknowledges and agrees that,
as between the Company and Employee, all of the Confidential Information,
however documented, whether or not developed, created or modified by Employee,
is the exclusive property of the Company.
(iv) Upon the termination or expiration of the
Employment Term, Employee shall leave with or return to the Company, without
making or retaining any copies, or other records of, all Confidential
Information including all copies, summaries, abstracts thereof and all
memoranda, notes, records, reports, books, letters, customer lists, manuals and
other writings or documents whatsoever pertaining thereto. Notwithstanding the
foregoing, as used herein "Confidential Information" does not mean or include
any information that is generally available to the public other than as a result
of a direct or indirect disclosure by Employee.
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(c) COVENANTS REGARDING BUSINESS RELATIONSHIPS. Employee
agrees that during and throughout the Employment Term and the Restricted Period,
except when acting on behalf of the Company, he shall not, directly or
indirectly, (i) employ, solicit, induce, engage or cause any director, officer,
employee, independent contractor, consultant, salesman or other agent of the
Company (whether now or hereafter engaged by the Company) to (A) terminate his
employment or engagement with the Company, (B) accept employment or engagement
or otherwise render services to any other Person or business (wherever located,
and regardless of type of business conducted), or (C) interfere with the
business of the Company; or (ii) solicit any clients or customers of the Company
or interfere in any business relationship between the Company and any other
person, firm or entity, including any person who was at any time an employee,
consultant, contractor, advisor, supplier, lender or customer of the Company.
Employee shall not, at any time during or after the Employment Term, disparage
the business reputation of the Company or any of its shareholders, directors,
Employees, employees or agents or take actions that are harmful to the Company's
good will with others.
(d) INTELLECTUAL PROPERTY. During and throughout the
Employment Term and the Restricted Period, Employee agrees to disclose to the
Company any and all ideas, improvements, techniques, modifications, processes,
inventions, developments, discoveries, trade secrets, trademarks, service marks,
copy rights, trade names, business plans and any work of authorship
("Intellectual Property") developed, conceived, created, made, devised,
discovered, acquired or acquired knowledge of, by Employee during the Employment
Period, either by himself or in conjunction with any other person, which relates
in any way, directly or indirectly, or may be useful in any manner in the
business of the Company or its Affiliates, and any such item that is based upon
or utilizes Confidential Information, whether or not the Company or its
Affiliates obtains a patent, trademark, service ▇▇▇▇ or copyright thereon.
Employee hereby agrees that the Intellectual Property shall become and remain
the sole and exclusive property of the Company. Employee hereby acknowledges
that all of Employee's writing, works of authorship and other Intellectual
Property are works made for hire and the property of the Company, including
patents, trademarks, service marks, copyrights and other intellectual property
rights pertaining thereto. Employee shall, at the request and cost of the
Company or any of its Affiliates, render assistance as the Company deems
necessary or desirable to secure, prosecute and/or defend the rights thereto by
patent, trademark, service ▇▇▇▇, copyright to otherwise to the Company or its
Affiliates, including without limitation the assignment, transfer and conveyance
to the Company or its Affiliates of all of Employee's right, title and interest
in and to the Intellectual Property.
(e) EMPLOYEE'S ACKNOWLEDGMENT. The Company spends considerable
amounts of time, money and effort in developing and maintaining good will in its
industry. Employee agrees the covenants contained within this Section 6 (i) are
reasonable and necessary in all respects to protect the goodwill, trade secrets,
confidential information, and business interests of the Company; (ii) are not
oppressive to Employee; (iii) do not impose any greater restraint on Employee
than is reasonably necessary to protect the goodwill, trade secrets,
confidential information and legitimate business interests of the Company; and
(iv) will not, upon the termination, of Employee's employment with the Company
for any reason whatsoever, cause Employee to be unable to earn a living that is
suitable and acceptable to Employee.
(f) EQUITABLE RELIEF. Employee hereby acknowledges and agrees
that his services to be rendered to the Company hereunder and his obligations
contained in this Section 6 are of special, unique and personal character which
gives them a peculiar value to the Company, that the Company cannot be
reasonably or adequately compensated in money damages in an action at law in the
event Employee breaches any obligations under this Section 6, and that the
provisions of this Section 6 are reasonable and necessary to protect the
business of the Company. Employee therefore expressly agrees that, in addition
to any other rights or remedies which the Company may have at law or in equity
or by reason of any other agreement, the Company shall be entitled to injunctive
and other equitable relief in the form of temporary, preliminary and permanent
injunctions without posting bond or other security in the event of any actual or
threatened breach of any such obligation by Employee and without the necessity
of proving actual damages, and to discontinue any salary, bonus, benefits and/or
insurance continuation provided hereunder. Nothing in this Agreement shall be
construed to prohibit the Company from pursuing any other remedy, and Employee
agrees that all remedies of the Company are cumulative.
(g) NATURE OF COVENANTS. Employee's covenants in Section 6
hereof are independent covenants, and the existence of any claim by Employee
against the Company under this Agreement or otherwise will not excuse Employee's
breach or waive Employee's obligation to perform, any covenant in this Section
6. If Employee's employment hereunder terminates for any reason, or the
Employment Term expires, this Section 6, and the other terms and conditions of
this Agreement necessary or appropriate to enforce the covenants of Employee in
Section 6, shall survive and remain in full force and effect.
8
SECTION 7. REPRESENTATIONS AND WARRANTIES OF EMPLOYEE. Employee
represents and warrants to the Company that (a) Employee is under no contractual
or other restriction, arrangement or obligation which is or will be breached by
or in conflict or inconsistent with his execution and delivery of this
Agreement, the performance of his duties hereunder, or the other rights of the
Company hereunder, and (b) Employee is under no physical or mental disability or
incapacity that would hinder the performance of his duties under this Agreement.
SECTION 8. CONSOLIDATION, MERGER OR SALE OF ASSETS. Nothing in this
Agreement shall preclude the Company from consolidating with, merging into, or
transferring all or substantially all of its assets to another entity which
assumes all of the Company's obligations and undertakings hereunder. Upon such a
consolidation, merger or transfer of assets, the term "Company" as used herein
shall mean such other entity, and this Agreement shall continue in full force
and effect.
SECTION 9. EMPLOYEE ACKNOWLEDGMENT; COUNSEL. Employee acknowledges by
executing this Agreement and delivering it to the Company that (i) he has read
all of the terms and conditions hereof, including his obligations, covenants,
representations and warranties to the Company; (ii) the covenants of Employee in
Section 6 hereof are essential elements of this Agreement, and the Company would
not have entered into this Agreement or the Stock Purchase Agreement without
Employee's agreement to comply with such covenants; (iii) each and every term,
covenant and restriction is reasonable and necessary for the proper protection
of the Company's business; and (iv) he has been advised by the Company that he
should consult with independent counsel of his choice and have such counsel
review this Agreement and render advice thereon to Employee, and Employee has
either done so or voluntarily elected not to do so.
SECTION 10. TAXES. All payments required to be made by the Company
hereunder to Employee shall be subject to withholding of such amounts relating
to taxes as the Company may reasonably determine it should withhold pursuant to
any applicable federal, state or local law or regulation. In lieu of withholding
such amounts, in whole or in part, the Company may, in its sole discretion,
accept other provision for payment of taxes, provided it is satisfied that all
requirements of law affecting its responsibilities to withhold such taxes have
been satisfied.
SECTION 11. NO ATTACHMENT. Except as required by law, no right to
receive payment under this Agreement shall be subject to anticipation,
commutation, alienation, sale, assignment, encumbrance, charge, pledge or
hypothecation or to execution, attachment, levy, or similar process of
assignment by operation of law, and any attempt, voluntary or involuntary, to
effect any such action shall be null, void and of no effect.
SECTION 12. ARBITRATION. Any dispute, controversy or claim arises out
of, under or in connection with, or otherwise relating to, this Agreement (other
than the Company's rights under Section 6) (a "Dispute"), including but not
limited to the parties' rights and obligations hereunder, or any actual or
alleged breach hereof, shall be determined and settled by binding arbitration in
Denver, Colorado in accordance with the rules of the commercial rules and
procedures of the American Arbitration Association, as amended by this
Agreement. Promptly after a Dispute arises, the parties agree to make a good
faith effort to select one mutually agreeable arbitrator. If the parties are
unable to reach agreement on an arbitrator within thirty (30) days after the
Dispute is submitted to arbitration, one arbitrator shall be selected in
accordance with the commercial rules and procedures of the American Arbitration
Association. Any determination, resolution or award made by the arbitrators
shall specify the findings of fact of the arbitrators and the reasons for the
determination, resolution or award, and such determination, resolution or award
shall be final and binding. If the parties hereto mutually agree to a resolution
of any Dispute prior to the arbitrators' decision, the agreement of the parties
shall resolve the Dispute. The party prevailing in any arbitration, as
determined by the arbitrator, shall be entitled to an award of all of its
out-of-pocket costs and expenses incurred in connection with the Dispute,
including but not limited to reasonable attorneys' fees, court costs and expert
fees. An arbitration award or decision may be entered by any court of competent
jurisdiction, or application may be made to such a court for judicial acceptance
of the award or decision and any appropriate order, including enforcement. The
parties hereby consent to the submission of any Dispute for settlement by
binding arbitration in accordance with this Section 12 and agrees to carry out
without delay the provisions of any arbitration award, decision or resolution.
SECTION 13. GENERAL PROVISIONS.
(a) GOVERNING LAW. This Agreement shall in all respects be
governed by, and construed in accordance with, the internal substantive laws of
the State of Colorado, without giving effect to any conflict or choice of law
principles or rules.
9
(b) AMENDMENT. This Agreement may not be amended or modified
in whole or in part in any manner except in a writing which makes reference to
this Agreement executed by both parties hereto.
(c) ASSIGNMENT. Neither the Agreement, nor any rights,
obligations or duties hereunder, may be assigned or delegated by any party
hereto without the prior written consent of the other party hereto; provided,
however, that this Agreement shall inure to the benefit of and be binding upon
the successors and assigns of the Company upon any sale of all or substantially
all of the Company's stock or assets, or upon any merger, consolidation or
reorganization of the Company with or into any other Person, so long as such
successors or assigns assume all of the Company's obligations hereunder. As used
in this Agreement, the term "Company" shall be deemed to refer to any such
successor or assign of the Company referred to in the preceding sentence.
(d) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns.
(e) ENTIRE AGREEMENT.
(i) This Agreement sets forth the entire agreement
and understanding of the parties hereto with respect to the subject matter
hereof and supersedes in their entirety all prior and contemporaneous written
and oral agreements, arrangements, understandings, negotiations, communications,
covenants, representations and warranties among the parties hereto relating to
the subject matter hereof.
(ii) Employee acknowledges that from time to time,
the Company may establish, maintain or distribute the employee manuals or
handbooks or personnel policy manuals, and Employees or other representatives of
the Company may make written or oral statements relating to personal policies
and procedures. Such manuals, handbooks and statements are intended only for
general guidance. No policies, procedures or statements of any nature by or on
behalf of the Company (whether written or oral, and whether or not contained in
any the employee manual or handbook or personnel policy manual), and no acts or
practices of any nature, shall be construed to modify this Agreement.
(f) NOTICES. Any and all notices, demands, requests, elections
and other communications required or permitted to be given hereunder shall be in
writing and shall be deemed to have been duly given (i) upon personal delivery;
(ii) upon confirmation of receipt when sent by facsimile transmission; (iii) one
business day after deposit during normal business hours with a nationally
recognized overnight courier, specifying next day delivery, with written
verification of receipt; (iv) five business days after being sent by first class
(certified or registered) mail, postage prepaid, return receipt requested, in
each case to the following addresses:
If to the Company:
PowerSecure, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Chairman of the Board
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to:
Metretek Technologies, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: W. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
and:
10
▇▇▇▇ ▇. ▇▇▇▇, Esq.
Kegler, Brown, Hill & ▇▇▇▇▇▇ Co., L.P.A.
▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Employee to:
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Any party hereto may send any notice, demand, request, election or other
communication to the intended recipient at its address set forth above using any
other means (such as expedited courier, messenger service, telecopy, telex,
ordinary mail or electronic mail), but no such notice, demand, request or other
communication shall be deemed to have been given until it is actually received
by the recipient. Any party hereto may change its designated address by giving
written notice to all other parties.
(g) WAIVER. The obligations of any party hereunder may be
waived only with the written consent of the party or parties entitled to the
benefits the obligations so involved. Any waiver of a breach or violation of or
default under any provision of this Agreement shall not be construed or operate
as, or constitute, a waiver of any other or subsequent breach or violation of or
default under that provision or any other provision of this Agreement. The
failure of any party to insist upon strict compliance with any provision of this
Agreement on any one or more occasions shall not be construed or operate as, or
constitute, a continuing waiver of, or an estoppel of that party's right to
insist upon strict compliance with, that provision or any other provision of
this Agreement.
(h) SEVERABILITY. The provisions of this Agreement shall be
deemed severable. If any provision of this Agreement is determined to be
illegal, invalid or unenforceable in any situation: (i) the parties hereto shall
agree to a suitable and equitable provision to be substituted therefor in order
to carry out, so far as may be valid and enforceable, the intent and purpose of
such invalid or unenforceable provision; and (ii) the remainder of this
Agreement shall remain in full force and effect, and the application of such
provision in any other situation shall not be affected.
(i) COUNTERPARTS. This Agreement may be executed in any number
of counterparts (including counterparts executed by less than all parties
hereto), each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
(j) HEADINGS. The headings used herein are solely for
convenience of reference and shall not be given any effect in the construction
or interpretation of this Agreement.
(k) NO THIRD PARTY BENEFICIARIES. Nothing in this Agreement,
express or implied, in intended to create or confer and shall not be construed
or operate as creating or conferring, any rights or remedies under or by reason
of this Agreement, upon any Person other than the parties hereto and their
respective successors and permitted assigns.
(l) FURTHER ASSURANCES. The parties hereto agree to take or
cause to be taken all actions, which are necessary, convenient or desirable in
order to effect the transactions contemplated by this Agreement.
(m) BEST EFFORTS. Each of the parties hereto shall act in good
faith and use its best efforts to bring about the transactions contemplated by
this Agreement.
(n) EXPENSES. Except as otherwise expressly provided herein,
each of the parties to this Agreement shall pay its own costs and expenses
incurred in connection with this Agreement and the consummation of the
transactions contemplated hereby.
(o) CONSTRUCTION. In the event an ambiguity or question or
intent or interpretation arises, this Agreement shall be construed as if drafted
jointly by the parties hereto and no presumption or burden of proof shall arise
favoring or disfavoring any party hereto by virtue of the authorship of any of
the provisions of this Agreement.
11
(p) SPECIFIC PERFORMANCE. Each of the parties hereto
acknowledges and agrees that the other parties hereto would suffer irreparable
damage for which an adequate remedy at law would not be available in the event
any of the provisions of this Agreement is not performed in accordance with its
specific terms or otherwise is breached. Accordingly, each of the parties hereto
agrees that the non-breaching parties shall be entitled to an injunction,
restraining order or other form of equitable relief from any court of competent
jurisdiction to prevent breaches of, and to specifically enforce, the provisions
of this Agreement.
(q) INTERPRETATION OF CERTAIN PROVISIONS. Except as otherwise
expressly provided herein, as used in this Agreement:
(i) Any reference to any federal, state, local or
foreign statute or law shall be deemed also to include a reference to all rules
and regulations promulgated thereunder.
(ii) The term "including" means "including, without
limitation".
(iii) The term "Entity" means and includes a
corporation, partnership, limited liability company, joint venture, trust,
association, unincorporated organization, governmental or regulating body or
authority, or any other form of business or entity.
(iv) The term "Person" means and includes an
individual and an Entity.
(v) The number and gender of each noun and pronoun
and the terms "Person" and "Persons" and the like shall be construed to mean
such number and gender as the context, the circumstances or its antecedent may
require.
(vi) The terms "hereof", "herein", "hereunder" and
words of similar import refer to this Agreement as a whole, and not to any
Section, subsection or clause of this Agreement.
(vii) Each reference to a Section means such Section
of this Agreement.
* * * * * * * * *
12
IN WITNESS WHEREOF, this Employment and Non-Competition Agreement has
been executed and delivered by or on behalf the parties hereto, effective as of
the date first above written.
THE COMPANY:
POWERSECURE, INC.
By: /s/ W. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------
W. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Chairman of the Board
EMPLOYEE:
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇
13
EXHIBIT A
POWERSECURE SHAREHOLDER AGREEMENT
[See Exhibit 10.28]
14