EXHIBIT
10.1


 





May 1, 2008


 


Mr. Charles
S. Rhoades


645
Highland Avenue


Boulder,
Colorado 80302


 


Dear
Steve:


 


SatCon
Technology Corporation, an employer at will, is pleased to confirm our offer of
employment to you as President and Chief Executive Officer reporting to the
Board of Directors.  In addition, you
will be appointed to serve on the Company’s Board of Directors upon
commencement of your employment.  Your
employment will commence May 1, 2008.


 


Compensation


 


Your
starting base salary will be $400,000 per annum payable in equal bi-weekly
installments of approximately $15,385.


 


In addition, you are eligible for a fiscal year
based incentive cash bonus opportunity of up to 60% of your base salary.  The Board of Directors and you will define
and agree upon specific incentive bonus plan criteria upon your commencement of
employment.


 


We are also offering you an option to purchase
4,796,020 shares of SatCon Common Stock, 1,199,005 shares of which will vest on
the first anniversary of your employment commencement date, with the remaining
3,597,015 subsequently vesting pro rata at the end of each quarterly
anniversary of your employment commencement date (1,199,005 per year).  Except as set forth below, unvested shares under
the option will expire on the last day of your employment, and the option will
expire at the earlier of ten years after the date of grant, if you remain an
active employee, or 90 days after you are no longer employed by SatCon
hereunder (unless you are terminated for “Cause” (as hereinafter defined), in
which case it will expire immediately). 
If your employment is terminated without Cause or is Constructively
Terminated (as such term is hereinafter defined) or you become Disabled or die
while you are employed by the Company, you or your estate shall have 12 months
after such termination without Cause, Constructive Termination, determination
of Disability or date of death to exercise the option.  If a Change in Control (as such term is
defined under SatCon’s amended 2005 Stock Incentive Plan (the “Plan”)) occurs,
all unvested shares under the option will vest, and you will have the right to
exercise the option at or prior to the closing of the Change in Control
transaction.  If you choose not to
exercise, your option will be accorded the same treatment as options 


 

















 


outstanding under the Plan are accorded under
the Change in Control transaction.  Your
option will be subject to our obtaining the approval of our Board of Directors
(which will be obtained prior to your commencing employment) and any necessary
pre-issuance notice filing with NASDAQ. 
Since the option will be issued outside of the Plan (which has a 500,000
share per year share limit per individual) we will need to grant you either
registration rights with respect to your option and the underlying shares or
file a Registration Statement on Form S-8 covering them.


 


The exercise price of the option will be the
greater of (i) $1.66 per share or (ii) the closing bid price of a
share of SatCon Common Stock on the NASDAQ exchange on the date the option is
granted, which will be the date on which you become a full-time employee of
SatCon.  SatCon will insure that the
option complies with Internal Revenue Code Section 409A and the
regulations adopted thereunder.  SatCon
will prepare and provide you with a copy of the option prior to your
commencement of employment.


 


Constructive Termination


 


For the purposes of this
letter, “Constructive Termination” shall be deemed to occur if: (a) there
is any reduction of your base compensation; or (b) the Company reduces or
changes your responsibilities such that you are no longer performing the duties
customarily performed by the Chief Executive Officer of SatCon (other than as a
result of your dying, being terminated for Cause or becoming Disabled); or (c) the
Company requires you to cease residing primarily in the State of Colorado or
deviate from the travel and commuting arrangement set forth in the paragraph
herein entitled Reimbursable Travel Expenses & Work Location and you
refuse to do so, and you provide the Company with 15 days notice of such
reduction or refusal and the Company does not remedy such situation within the
thirty (30) day period immediately following such notice and you then elect to
terminate your employment relationship voluntarily.


 


Payments and Benefits Upon Termination
of Employment


 


Upon termination of your
employment, the Company shall pay you any compensation and benefits earned by
you through the date of termination of your employment (the “Termination Date”),
including any earned bonus that has not been paid as of the Termination
Date.  Additionally, in the event that
your employment has been terminated by the Company without Cause (other than as
a result of your dying or becoming Disabled) or your employment has been
Constructively Terminated within 12 months after the occurrence of a Change in
Control, and conditioned upon your execution of a written release reasonably
acceptable to the Company and you (a “Release”) that becomes binding upon you
and the Company (to be drafted and provided by the Company) of any and all
claims, including without limitation any claims for lost wages or benefits,
stock options, compensatory damages, punitive damages, attorneys’ fees,
equitable relief, or any other form of damages or relief you may assert against
the Company, you shall receive the following benefits for the twelve (12) month
period immediately following the Termination Date: (i) continuation of
your base salary (as of the Termination Date), less all applicable taxes and
withholdings, paid in accordance with the Company’s normal payroll schedule and
practices, and (ii) payment by the Company of the share of the 


 

















 


premiums for continuation of
medical and dental benefits under COBRA that are paid by the Company for active
and similarly-situated employees who receive the same type of coverage,
assuming you elect and are eligible for such coverage.


 


For
purposes of this letter, “Cause” for termination shall be deemed to exist upon (i) a
good faith finding by the Board of Directors of the Company (A) that you
have repeatedly and willfully failed to perform your reasonably assigned duties
for the Company, which failure is not cured within fifteen days after written
notice to you of such finding; (B) that you have engaged in fraud, gross
negligence or the deliberate and intentional violation of material rules or
standards applicable to you as a result of your employment at the Company (“Misconduct”),
which fraud, gross negligence or Misconduct has had or could have a material
adverse effect on the Company; (C) that you have been enjoined or
otherwise prevented by court order (whether temporarily or permanently) from
performing your full duties as President and Chief Executive Officer of the
Company; or (D) that you have made a material misrepresentation under
subsection (i) or (ii) of the third paragraph of the Section of
this Agreement entitled “Other Agreements”; (ii) your being convicted of, or
pleading guilty or nolo contendere to, any crime involving moral turpitude or
any felony; or (iii) a breach by you of any material provision of this
Agreement or any invention and non-disclosure agreement with the Company, which
breach is not cured within fifteen days after written notice thereof to
you.  Further, for purposes of this
letter, “Disability” or “Disabled” shall mean a permanent and total disability
(within the meaning of Section 22(e) of the Code), as determined by a
medical doctor satisfactory to the Company.


 


Benefits


 


Beginning on your first day of employment, you
will be eligible to participate in our comprehensive medical insurance plan,
dental insurance, 401k savings plan, long term disability and life insurance
plans.  You are eligible for four (4) weeks
of paid vacation per year.  Vacation time
is accrued over the course of the year.


 


Reimbursable Travel Expenses & Work Location


 


As
your domicile and primary residence will remain in Boulder, Colorado, and since
the Company maintains operations in multiple locations, SatCon will reimburse
you for hotels, business class travel, car rental, shuttles, taxis, transfers
(or reimburse mileage) to these work sites, including corporate
headquarters.  The Board of Directors and
you have agreed that you will work full-time, primarily at corporate headquarters
in Boston, for the first 6-12 months of employment.  You have agreed to establish a secondary
residence in Boston and this cost as well as other expenses associated with
your time in Boston will not be considered to be reimbursable as a business
expense.  After an initial 6-12 month
period, and only after meeting the Board’s expectations with respect to the
execution of your roles and responsibilities as CEO, will your work schedule be
modified such that you may then work from your primary residence in Boulder,
Colorado for up 5 workdays per month.


 

















 


Other Agreements


 


You will be required to review and sign the
company’s standard non-disclosure and patent agreement prior to or on your
first day of work.  You will also be
required to agree to the terms of the SatCon insider trading policy and
procedures.  As you will be a Section 16
officer, you are subject to the reporting requirements thereof.


 


You have provided us with copies of the
following documents with regard to your previous employment with Advanced
Energy, Inc. (“AE”): (i) Employment Agreement, dated August 20,
2002; (ii) Confidentiality Agreement, dated September 12, 2002; (iii) Change
of Control Severance Agreement, dated March 29, 2005; and (iv) Executive
Transition Agreement, dated December 31, 2007 (the “Transition Agreement”)
(collectively, the “AE Documents”).


 


You hereby represent, warrant and covenant to
the Company, as a material inducement to the Company’s entering into this
Employment Offer Letter:  (i) that
the AE Documents constitute all of the documents, instruments and agreements
that you have entered into with AE that may affect your employment with the
Company; (ii) that it is, and has always been, your understanding that the
Transition Agreement does not, and was never intended to, contain a
non-competition agreement with AE and that you will provide the Company with an
affidavit to that effect for use in connection with any litigation that may be
brought by AE in connection therewith; (iii) that you will cooperate with
the Company with respect to any claim, litigation or judicial, arbitral or
investigative proceeding that may be brought against the Company in connection
with your former employment with AE; and (iv) that you will not
intentionally violate any of your confidentiality or assignment of inventions
obligations to AE in connection with your employment with the Company.


 


You shall be entitled to indemnification from the
Company as may be provided in the Company’s Certificate of Incorporation and
Bylaws to officers and directors of the Company.  You shall be included in any directors and
officers liability insurance coverage provided to the Company’s directors and
executive officers generally from time to time. 
In addition, based upon your representations, warranties and covenants
set forth above, the Company agrees to indemnify, defend and protect you
against any claims, demands, actions, judgments, damages, liabilities, debts or
expenses (including attorney fees and legal costs) relating to or arising out
of your obligations to AE pursuant to the terms of the AE Documents and arising
out of your employment with the Company (other than any claim that AE may bring
to seek the return of monies paid to you under the Transition Agreement or any
claim that you may bring against AE to enforce such payment).


 


Notwithstanding the
foregoing, if you bring an action against AE to enforce payment or performance
of AE’s obligations to you under the Transition Agreement you shall do so with
counsel of your own choosing and at your own expense.  If, however, AE counterclaims against you in
any such proceeding, whether or not the Company is made a defendant therein,
and such counterclaim or action is one 


 

















 


for which the Company has
agreed to provide indemnification herein the Company shall assume the defense thereof, including the employment
of counsel reasonably satisfactory to you and the payment of all fees and
expenses incurred in connection with defense thereof.  Similarly, if AE initially brings an action
against you for which the Company has agreed to provide indemnification herein,
and you counterclaim to enforce payment or performance of AE’s obligations to
you under the Transition Agreement, the Company shall assume the prosecution of
such counterclaim, including the employment of counsel reasonably satisfactory
to you and the payment of all fees and expenses incurred in connection with the
defense thereof.  You shall have
the right to employ separate counsel in any such proceeding for which the
Company is providing indemnification and defense herein and to participate in
the defense thereof, but the fees and expenses of such counsel shall be at your
expense.


 


Steve,
I trust that you will find the President and CEO position offered both
challenging and rewarding.  We all very
much look forward to your becoming a part of SatCon.


 


	
  Sincerely,

  	
   

  
	
   

  	
   

  
	
  /s/
  John M. Carroll

  	
   

  
	
   

  	
   

  
	
  John
  M. Carroll, Chairman

  	
   

  
	
  SatCon
  Technology Corporation

  	
   

  
	
   

  	
   

  
	
  AGREED
  TO AND ACCEPTED

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/
  Charles S. Rhoades

  	
   

  
	
  Charles
  S. Rhoades