Exhibit 10.1
GREENMAN TECHNOLOGIES, INC.
Employment Agreement
THIS EMPLOYMENT AGREEMENT ("Agreement"), effective as of April 12, 2006,
by and between GreenMan Technologies, Inc., a Delaware corporation (the
"Company"), and Lyle E. Jensen (the "Employee");
WHEREAS, the Company desires to obtain the employment of the Employee and
the Employee desires to be so employed by the Company;
NOW, THEREFORE, in consideration of the mutual covenants contained in this
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which consideration are hereby acknowledged, the parties agree as
follows:
1. Employment
The Company hereby employs the Employee, and the Employee hereby
accepts employment with the Company, upon the terms and conditions hereinafter
set forth.
2. Duties
The Employee shall serve as President and Chief Executive Officer.
In such capacity, the Employee will report to the Board of Directors of the
Company and will perform such duties on behalf of the Company consistent with
such office as may be assigned to him from time to time by the Board of
Directors of the Company including, without limitation, (a) managing all aspects
of the Company as it works to restructure the Company into a profitable entity:
(b) working with the Board of Directors to ensure that the best interests of the
Shareholders are met; and (c) working with the Chairman of the Board, other
members of the Board of Directors, corporate staff, and outside advisors in
support of their ongoing work with financing, corporate development, and any
regulatory issues which might arise, including, without limitation, those issues
regulated by the U.S. Securities Exchange Commission. The Employee agrees to
abide by the rules, regulations, instructions, personnel practices, and policies
of the Company and any changes therein which may be adopted from time to time by
the Board of Directors of the Company.
3. Term
Unless sooner terminated as provided in Section 7 and subject to
Section 7, the term of the Employee's employment under this Agreement will be
five (5) years from the date first above written (such period, as it may be
extended or reduced, is referred to in this Agreement as the "Employment
Period"). On April 12 of each calendar year during the Employment Period the
term of this Agreement and the Employment Period shall automatically be renewed
for an additional one year term unless either party gives written notice to the
other party sixty days prior to that April 12 of its intention that this
Agreement not renew beyond the remaining term as provided for in this section.
4. Extent of Services
During the term of his employment, the Employee shall devote his
full time and best efforts to the performance of his duties under this
Agreement. Under no circumstances will the Employee knowingly take any action
contrary to the best interests of the Company.
5. Compensation
In consideration of his employment and the services rendered by the
Employee under this Agreement, the Company shall pay the Employee compensation
as follows:
5.1 Relocation Allowance. The Company will reimburse the Employee,
upon substantiation thereof, for all reasonable expenses incurred by him in the
relocation of personal possessions from California to Iowa and for two
house-hunting trips for one family member up to a total allowance of $25,000.
5.2 Base Salary. A base salary ("Base Salary") payable at the rate
of Sixteen Thousand Two Hundred Fifty Dollars ($16,250) per month (One Hundred
Ninety Five Thousand Dollars ($195,000) per year) during the Employment Period,
payable in accordance with the Company's ordinary payroll practices. Any
increase in Base Salary shall be at the sole discretion of the Board of
Directors.
5.3 Payment in Stock. At Employee's sole option, Employee may elect,
by giving written notice to the Company, to receive any amount of his Base
Salary, Incentive Compensation (as provided in Section 5.4 of this Agreement),
or Expense Reimbursement (as provided in Section 6.2 of this Agreement) in the
form of Company stock at a per share price equal to the market price of such
stock on the date any such amount becomes due and payable by Company to
Employee. The Employee acknowledges that the Company may withhold shares and/or
require the Employee to pay the Company an amount, in cash, equal to the
Company's tax withholding obligations upon the issuance of any such shares.
5.4 Annual Incentive Compensation.
a) Annual Financial Performance Incentive: The Employee shall be eligible
to receive incentive compensation ("Incentive Compensation"), based on annual
Net Income Before Interest, Income Taxes, Depreciation and Amortization
("EBITDA") as a Percent of annual audited consolidated revenue, excluding all
intercompany revenue ("Revenue"). To be eligible to receive Incentive
Compensation with respect to any fiscal year, the Employee must be employed by
the Company on the last day of such fiscal year. Any amount due under this
section relating to the fiscal year ended September 30, 2006 shall be prorated
from the date of this Agreement to September 30, 2006.
EBITDA as a Performance
% of Revenue Incentive
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Base: 10.0 % or Less None
Level I: 10.1% - 12.0% 10% of EBITDA dollars above Base.
Level II: 12.1% - 15.0% 12% of EBITDA dollars above Base.
Level III: > 15.0% 15% of EBITDA dollars above Base
b) Non-financial Performance Incentives: The Employee shall be eligible to
receive such additional Incentive Compensation as is determined at the sole
discretion of the Board of Directors and approved by the Compensation Committee,
based on the achievement of any non-financial goals established at the approval
of each Annual Operating Plan.
5.5 Annual Incentive Stock Options. In addition to the annual
Incentive Compensation described in Paragraph 5.4, Employee may be granted up to
100,000 incentive stock options (ISO's) per year under the 2005 Stock Option
Plan for achieving certain levels of EBITDA performance as noted below:
EBITDA as a Performance
% of Revenue Incentive Earned
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<11.0% None
11.1% - 11.99% Options to purchase 20,000 shares of the Company's common stock.
12.0% - 12.99% Options to purchase 40,000 shares of the Company's common stock.
13.0% - 13.99% Options to purchase 60,000 shares of the Company's common stock.
14.0% - 14.99% Options to purchase 80,000 shares of the Company's common stock.
> 15.0% Options to purchase 100,000 shares of the Company's common stock.
Any amounts due under this section relating to the fiscal year ended September
30, 2006 shall be prorated from the date of this Agreement to September 30,
2006. The exercise price of any such options granted pursuant to this Section
5.5 will be equal to the market value of the Company's common stock on the date
of grant, and any such option shall vest immediately on the date of grant At the
Board's discretion, additional stock options may be awarded to the Employee
following significant contracting activities, mergers, or other significant
events.
5.6 Stock Option Grant. In addition to any other stock options
previously granted by the Company to the Employee, the Company shall upon
execution of this Agreement grant to Employee incentive stock options (ISO's) to
purchase up to a maximum of Five Hundred Thousand (500,000) shares of the
Company's common stock. The exercise price of all options granted pursuant to
this Section 5.6 will be equal to the market value of the Company's common stock
on the date of grant and shall vest in equal annual installments over a period
of five years from date of grant.
5.7 Accelerated Vesting Irrespective of the schedules required in
Paragraph 5.6 above, all option grants under this Agreement shall vest and be
exercisable by the Employee immediately prior to any transaction or series of
sequenced events in which all or substantially all of the Company's assets or
common stock are sold to or merged with a third party or third parties. The
relevant stock option agreements shall provide that, in such an event the
Employee will not sell more than 250,000 shares of common stock during any
subsequent twelve (12) month period commencing on the closing of such an event.
5.8 Terms of Options. All Incentive Stock Options and all Stock
Option Grants shall be governed by the terms of the Company's 2005 Stock Option
Plan and, except as specifically set forth in this Agreement, the Company's
customary form of stock option agreement.
5.9 Purchase of Shares of Common Stock. The Employee agrees to
purchase from the Company, 500,000 unregistered shares of the Company's common
stock at a price equal to the closing bid price of the Company's common stock on
the date this Agreement is executed.
6. Other Benefits
6.1 Additional Compensation and Benefits. The Employee shall be
entitled to receive the same health, disability and other benefits as are
offered by the Company to all full-time employees from time to time. The
Company, at its own expense, shall obtain, if available at commercially
reasonable rates officers' and directors' errors and omissions insurance in
respect of Employee's tenure as an officer and, as a director of the Company.
6.2 Expenses. The Company will, upon substantiation thereof,
reimburse Employee for all reasonable expenses of types authorized by the Board
of Directors of the Company in the ordinary course of business and incurred by
the Employee in connection with the Company's business affairs. The Employee
must regularly submit, for approval by the Chief Financial Officer of the
Company, a statement of these expenses and will comply with such other
accounting and reporting requirements as the Company may from time to time
establish. In addition, the Company shall reimburse the employee for reasonable
annual premiums associated a life insurance policy on Employee's life in the
maximum benefit amount of $1,000,000 and for which benefit payments shall
payable to the Employee's designated beneficiary.
6.4 Car Allowance. The Employee shall receive a car allowance in the
amount of $600 per month.
7. Termination
7.1 By the Company. The Company may terminate the Employee's
employment with the Company (a) in accordance with the provisions of Section 3
of this Agreement, (b) at any time without notice for "cause", as defined below,
(c) at any time without cause upon thirty (30) days' advance notice, subject to
Section 7.4 below and subject to the requirement that the Company pay to the
Employee the amount set forth in Section 7.4 herein, (d) upon the death of the
Employee, or (e) in the event of the Employee's disability preventing him from
rendering services to the Company consistent with his duties hereunder for a
period of six (6) consecutive months.
7.2 By the Employee. The Employee may terminate his employment with
the Company in accordance with the provisions of Section 3 or at any time upon
one hundred and twenty (120) days' advance notice.
7.3 Cause. For the purposes of this Section 7, "cause" means:
(a) engaging in any crime or offense involving money or other
property of the Company, or
(b) conviction of a felony, or pleading guilty or "no contest"
to, or
(c) continuing, repeated willful failure or refusal to perform
specific written directives of the Company's Board of Directors consistent with
the Employee's duties after notice that such failure will be deemed to
constitute cause for termination and a reasonable opportunity to cure such
failure or refusal, or
(d) excessive absenteeism, or
(e) owning, engaging in, conducting, managing, operating,
participating in, being employed by, being connected in any manner whatsoever
with, or rendering services or advice to (whether for compensation or without
compensation), any other person or business entity which is engaged in the same
business as conducted by the Company at the time, provided that nothing shall
restrict the Employee's right to invest in the securities (not to exceed 1% of
the outstanding securities of any class) of any publicly-held corporation in the
management of which the Employee does not participate.
7.4 Amounts Payable Upon Termination. Upon termination of the
Employee's employment with the Company in accordance with clause (a), (b), (d)
or (e) of Section 7.1, all compensation and benefits under this Agreement will
cease, effective the date of termination. Upon termination of the Employee's
employment with the Company in accordance with clause (c) of Section 7.1, all
compensation under Sections 5.2, 5.3, 5.4, 5.5, and 5.6 shall cease, effective
upon the date of termination, but the Employee shall receive, for one year from
the date of Employee's notice of termination given pursuant to Section 7.1(c)
the following: (i) Base Salary at the same salary rate being paid on the date of
termination and (ii) the benefits described in Section 6. Other than as
specifically set forth in Sections 6.2, 7.1, and this Section 7.4, the Employee
will not be entitled to receive any compensation or benefits after termination
of his employment with the Company.
7.5 Termination of Benefits. Notwithstanding anything to the
contrary in this Agreement, in the event that the Employee is determined in an
arbitration conducted pursuant to Section 11.7 to have violated his obligations
under Section 8 of this Agreement, or if the Employee shall be enjoined by a
court from violating his obligations under Section 8.3 of this Agreement, then,
in addition to any other remedies which may be available to the Company at law
or in equity, all of the Company's obligations under Section 7.4 shall
immediately cease, and all then unexercised stock options shall immediately be
forfeited.
8. Non-Disclosure: Non-Competition
8.1 Proprietary Information.
(a) The Employee agrees that all information and know-how,
whether or not in writing, of a private, secret or confidential nature
concerning the Company's business or financial affairs (collectively,
"Proprietary Information") is and will be the exclusive property of the Company.
By way of illustration, but not limitation, Proprietary Information includes
contemplated or planned marketing, sales, advertising, or public relations
plans, methods or techniques; inventions, products, projects, developments,
compositions, plans, research data, financial data, manufacturing processes or
techniques, trade secrets, personnel data, computer programs, designs, and
client and supplier lists, whether or not copyrightable, trademarketable or
licensable. The Employee will not disclose any Proprietary Information to others
outside the Company or use the Proprietary Information for any unauthorized
purposes without written approval by an officer of the Company, either during or
after his employment, unless and until such Proprietary Information has become
public knowledge without the fault of the Employee.
(b) The Employee agrees that all files, letters, memoranda,
reports, records, data sketches, drawings, notebooks, notes, specifications,
programs, computer program listings, or other written photographic, or other
tangible material containing Proprietary Information, whether created by the
Employee or others, which comes into his custody or possession, is the exclusive
property of the Company, to be used by the Employee only in the performance of
his duties for the Company.
(c) The Employee agrees that his obligation not to disclose or
use information, know-how and records of the types set forth in Paragraphs (a)
and (b) above also extends to such types of information, know-how, records and
tangible property of customers of the Company or suppliers to the Company or
other third parties who may have disclosed or entrusted the same to the Company
or to the Employee in the course of the Company's business.
8.2 Developments.
(a) The Employee will make full and prompt disclosure to the
Company of all inventions, improvements, ideas, concepts, approaches,
discoveries, methods, developments, software, and works of authorship, whether
or not copyrightable, trademarketable or licensable, which are created, made,
conceived or reduced to practice by the Employee or under his direction or
jointly with others in connection with his employment by the Company, whether or
not during normal working hours or on the premises of the Company (all of which
are collectively referred to in this Agreement as "Developments").
(b) Employee hereby assigns irrevocably and unconditionally,
to the fullest extent permitted by law, all right, title and interest embodied
in or associated with any and all Development
(c) The Employee agrees to cooperate fully with the Company,
both during and after his employment with the Company, with respect to the
procurement, maintenance and enforcement of patents, copyrights, and trademarks
(both in the United States and foreign countries) relating to Developments. When
requested by the Company, Employee agrees to sign all papers, including, without
limitation, copyright applications, trademark applications, patent applications,
declarations, oaths, formal assignments, assignments of priority rights and
powers of attorney, which the Company, in its sole discretion, may deem
necessary or desirable in order to protect its rights and interest in any
Development.
8.3 Non-Competition.
(a) During the Employment period and for a period of two years
after Employee's employment is terminated, for any reason, by the Company or the
Employee, the Employee will not, without the Company's prior written approval,
directly or indirectly:
(i) recruit, solicit or knowingly induce, or attempt to
induce, any employee or consultant of the Company to terminate his or her
employment or consulting relationship with, or otherwise cease their
relationship with, the Company; or
(ii) solicit, divert or take away, or attempt to divert
or to take away, the business or patronage of any of the clients, customers or
accounts, or prospective clients, customers or accounts of the Company. For
purposes of this Agreement, a prospective client, customer or account is any
individual or entity whose business is solicited by the company, proposed to be
solicited by the Company, or who approaches the Company, with respect to
possibly become a client, customer or account during the Employment Period; or
(iii) engage (whether for compensation or without
compensation) as an individual proprietor, partner, stockholder, officer,
employee, director, joint venturer, investor, lender, or in any other capacity
whatsoever (otherwise than as the holder of not more than one percent (1%) of
the total outstanding stock of a publicly-held company), in any business
activity which competes with any business then being conducted by the Company or
any business proposed to be conducted by the Company at the time of the
termination of the Employee's employment with the Company.
(b) If any restriction set forth in this Subsection 8.3 is
found by any court of competent jurisdiction to be unenforceable because it
extends for too long a period of time or over too great a range of activities or
in too broad a geographic area, it shall be interpreted to the extent only over
the maximum period of time, range of activities or geographic areas to which it
may be enforceable.
(c) The restrictions contained in this Subsection 8.3 are
necessary for the protection of the business and goodwill of the Company and are
considered by the Employee to be reasonable for these purposes. The Employee
agrees that any breach of this Subsection 8.3 will cause the Company substantial
and irrevocable damage and, therefore, in the event of any such breach, in
addition to such other remedies which may be available, the Company will have
the right to equitable remedies, including, without limitation, specific
performance and injunctive relief.
8.4 Survival of Obligations. The obligations of the Employee under
this Section 8 shall survive the termination of this Agreement.
9. Notices
All notices under this Agreement must be in writing and must be
delivered by hand or mailed by certified or registered mail, postage prepaid,
return receipt requested, to the parties as follows:
If to the Company: GreenMan Technologies, Inc.
7 Kimball Lane, Building A.
Lynnfield, Massachusetts 01940
Attention: Maurice E. Needham
with a copy to:
Carl Barnes, Esq.
Morse, Barnes-Brown & Pendleton, P.C.
Reservoir Place
1601 Trapelo Road
Waltham, MA 02451
If to the Employee: To the address set forth below the
signature of the Employee;
or to such other address as is specified in a notice complying with this Section
9. Any such notice is deemed given on the date delivered by hand or three days
after the date of mailing.
10. Other Agreements
The Employee hereby represents that he is not bound by the terms of
any agreement with any previous employer or other party to refrain from
competing, directly or indirectly, with the business of such previous employer
or any other party. The Employee further represents that his performance of all
the terms of this Agreement and as an employee of the Company does not and will
not breach any agreement to keep in confidence proprietary information,
knowledge or data acquired by him in confidence or in trust prior to his
employment with the Company.
11. Miscellaneous
11.1 Entire Agreement. This Agreement constitutes the entire
Agreement between the parties with regard to the subject matter hereof,
superseding all prior understandings and agreements, whether written or oral.
11.2 Modification. This Agreement may not be amended or revised
except by a writing signed by the parties.
11.3 Successors and Assigns. This Agreement is binding upon and
inures to the benefit of both parties and their respective successors and
assigns, including any entity with which or into which the Company may be merged
or which may succeed to its assets or business, although the obligations of the
Employee are personal and may be performed only by him.
11.4 Captions. Captions have been inserted in this Agreement solely
for convenience of reference, and in no way define, limit or affect the scope or
substance of any provision of this Agreement.
11.5 Severability. The provisions of this Agreement are severable,
and the invalidity of any provision shall not affect the validity of any other
provision. In the event that any court of competent jurisdiction determines that
any provision of this Agreement or the application thereof is unenforceable
because of its duration or scope, the parties agree that the court in making
such determination shall have the power to reduce the duration and scope of such
provision to the extent necessary to make it enforceable, and that the Agreement
in its reduced form is valid and enforceable to the full extent permitted by
law.
11.6 Governing Law. This Agreement is to be construed under and
governed by the laws of the Commonwealth of Massachusetts, without regard to
conflicts of laws principles.
11.7 Dispute Resolution
a) Arbitration The parties agree that any and all disputes,
claims or controversies arising out of or relating to this Agreement that are
not resolved by mutual negotiation shall be submitted to final and binding
arbitration before the AAA, or its successor, pursuant to the United States
Arbitration Act, 9 U.S.C. Sec. 1 et seq. Either party may commence the
arbitration process called for in this Agreement by filing a written demand for
arbitration with the AAA Commercial Arbitration Rules in effect at the time of
filing of the demand for arbitration, in Suffolk County in the Commonwealth of
Massachusetts. The parties will cooperate under the AAA and with one another in
selecting an arbitrator from the AAA's panel of neutrals and in scheduling the
arbitration proceedings. The parties covenant that they will participate in the
arbitration in good faith, and that they will share equally in its costs. The
provision of this section, and any award made pursuant to this section, may be
enforced by any court of competent jurisdiction, and the party seeking
enforcement shall be entitled to an award of all reasonable costs, fees, and
expenses, including attorney's fees, to be paid by the party against whom
enforcement is ordered. Notwithstanding the foregoing, however, the
arbitrator(s) shall not have the power to award indirect, consequential,
punitive or exemplary damages.
b) Waiver of Right to Litigation in Court NOTICE: By
initialing in the space below, you are agreeing to have all disputes, claims, or
controversies arising out of or relating to this Agreement decided by neutral
arbitration, and you are giving up any rights you might possess to have those
matters litigated in a court or a jury trial. By initialing in the space below,
you are giving up your judicial rights to discovery and appeal except to the
extent that they are specifically provided for under this Agreement. If you
refuse to submit to arbitration after agreeing to this provision, you may be
compelled to arbitrate under federal or state law. Your agreement to this
arbitration provision is voluntary.
We have read and understand the foregoing and agree to submission of all
disputes, claims or controversies arising out of or relating to this Agreement
to neutral arbitration in accordance with this Agreement.
- -------------------- ----------------------------
Company Employee
11.8 Withholding. All payments made by the Company under this Agreement
shall be net of any tax or other amounts required to be withheld by the Company
under applicable law.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date and
year first above written.
GREENMAN TECHNOLOGIES, INC. ("Company")
By: /s/ Maurice E. Needham
----------------------
Maurice E. Needham
Chairman of the Board of Directors
By: /s/ Lew Boyd
------------
Lew Boyd
Chairman of the Compensation Committee
EMPLOYEE
/s/ Lyle E. Jensen
------------------
Lyle E. Jensen
Lyle E. Jensen
35760 Iodine Springs
Wilomar, CA 92595