Document:

EXHIBIT 10.5

 

	

    	
Satcon Corporate
    
	
27   Drydock Avenue
    
	
Boston,   MA 02210
    
	
617.897.2400   TEL
    
	
617.897.2401   FAX
    

 

November 8, 2010

 

Aaron Gomolak

6214 West Chase Road

Fort Collins, CO 80528

 

Dear Aaron:

 

Satcon Technology Corporation (“Satcon” or the “Company”), an employer at will, is pleased to confirm the terms and conditions under which we will continue to employ you as our Sr. VP Global Operations, reporting to the President and Chief Executive Officer.

 

Compensation

 

Your starting base salary will be $230,445 per annum payable in substantially equal bi-weekly installments of $8,863.27.  Such salary maybe increased (but not decreased) from time to time at the discretion of the Company.

 

In addition, you are eligible for a fiscal year based incentive cash bonus opportunity of up to 30% of your base salary for a particular fiscal year pursuant to the terms of the Satcon Incentive Plan for Management.

 

You have received in the past and may, subject to Board approval and our normal option grant procedures, receive in the future, stock option grants and restricted stock under the various incentive compensation plans that the Company has had in effect, including Satcon’s 2005 Incentive Compensation Plan (the “Plan”; individually, an “Option” and, collectively, the “Options”).  Except as set forth below, any unvested shares under the Options will expire on the last day of your employment and each Option will expire at the earlier of ten years after the date of grant, if you remain an active employee at that time, 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 subject to a Disability (as such term is defined under the Plan) 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 the Plan) occurs, all unvested shares under the Options will vest, and you will have the right to exercise the Options at or prior to the closing of the Change in Control transaction.  If you choose not to exercise,

 

 

your Options will be accorded the same treatment as options outstanding under the Plan are accorded under the Change in Control transaction.

 

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 Sr. VP Global Operations of Satcon (other than as a result of your dying, being terminated for Cause or becoming Disabled); or (c) the Company requires you to move your principal residence to a location that is more than 35 miles from your current location: 6214 Westchase Road, Fort Collins, CO 80528 and you provide the Company with 15 days notice of such reduction, change or requirement 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 subject to a Disability) or your employment has been Constructively Terminated, 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, the issuance of additional 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, (ii) payment by the Company of the share of the premiums for life insurance plus 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, and (iii) payment of your fiscal year based cash bonus incentive.

 

 

Definition of Cause

 

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 thirty 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; or (C) that you have been enjoined or otherwise prevented by court order (whether temporarily or permanently) from performing your full duties as Sr. VP Global Operations of the Company; (ii) that you have been convicted of, or pled 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.

 

Non-Competition and Non-Solicitation

 

During the period of your relationship as an officer, employee or consultant of the Company, you will devote your available business time and all commercially reasonable efforts to promoting and advancing the business of the Company.  During such period and for a period of the greater of (i) six months after termination of such relationship (for any reason whatsoever) or (ii) any period of time during which the Company is continuing to pay you compensation or provide you with benefits hereunder, you agree not to do any of the following: (A) whether alone or as a partner, officer, director, consultant, agent, employee or stockholder of any company or other commercial enterprise, engage in any business or other commercial activity which is or may be competitive with the products and services being designed, conceived, marketed, distributed or developed by the Company at the time of termination of such relationship or products that fall within the anticipated research and development activities of the Company at the time of termination, (B) directly or indirectly either for yourself or for any other commercial enterprise, solicit, divert or take away or attempt to solicit, divert or take away, any of the Company’s customers, business or prospective customers in existence at the time of termination of such relationship, and (C) solicit or induce any employee or consultant to terminate his or her relationship with the Company, nor recruit, attempt to recruit, hire, or attempt to hire any such Company employee or consultant other than on behalf of the Company, whether or not the organization is competitive with the Company’s Business.  For purposes of this Agreement, “prospective customers” shall include those customers being solicited by the Company at the time of the Key Employee’s termination.

 

You agree that any breach of this section of this Agreement could cause irreparable damage to the Company.  The Company shall have, in addition to any and all remedies of law, the right to an injunction or other equitable relief to prevent any violation of your hereunder, and/or the right to specific performance.

 

 

Benefits

 

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 in equal monthly increments over the course of the year.  You will be entitled to be reimbursed for your reasonable and necessary business expenses in accordance with our standard policy regarding such reimbursements.

 

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 will be subject to the reporting requirements under Section 16 of the Securities Exchange Act of 1934.

 

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.

 

	
Sincerely,
    	
 
    
	
 
    	
 
    
	
/s/   Charles S. Rhoades
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Charles   S. Rhoades, President and Chief Executive Officer
    	
 
    
	
Satcon   Technology Corporation
    	
 
    
	
 
    	
 
    
	
AGREED   TO AND ACCEPTED
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
/s/ Aaron Gomolak
    	
 
    
	
Aaron   GomolakEXHIBIT 10.6

 

 

Overview — Executive & Managers Compensation Philosophy

 

The primary objective of Satcon’s compensation program is to attract, retain, and motivate the best possible executive and management talent in pursuit of our business strategy of being a leading global provider of utility scale distributed power solutions for the renewable energy market.  The focus is to tie short and long-term incentives to the achievement of measurable corporate and individual performance objectives.   Our management compensation structure not only aims to be competitive in our market sector, but also to be fair relative to compensation paid to other professionals within our organization. As we continually develop our compensation approach, we aim to implement an approach that rewards our managers when we achieve our target goals and objectives.  As our business evolves, we seek to foster a performance-oriented culture, where individual performance is aligned with organizational objectives.  Managers will be evaluated and rewarded based on their organizational contributions to the achievement of short and longer term objectives; their openness to challenging and improving current policies and structures; their willingness to foster a highly creative team-oriented environment; and their ability to take advantage of unique business opportunities and overcome difficult challenges within the emerging renewable energy and distributed power business sectors.

 

An important component of Satcon’s management total compensation program is an annual cash Incentive Plan that ties a significant portion of management’s overall compensation to the achievement of short term annual objectives.

 

SATCON 2011 INCENTIVE PLAN

FOR MANAGEMENT

 

Section 1: Purpose

 

The Satcon 2011 Incentive Plan (the “Plan”) is designed to:

 

·                  Attract and retain highly qualified executives and other personnel by providing competitive annual incentive opportunities.

 

·                  Provide performance-leveraged incentives that motivate and reward superior managerial performance and the profitable growth of Satcon Technology Corporation (the “Company”).

 

·                  Support a performance oriented environment that differentiates individual rewards based on performance and results.

 

Section 2: Definition of Terms

 

a)                                      Board means the Board of Directors of the Company.

 

b)                                     Committee means the Compensation Committee of the Board.

 

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c)                                      Participants shall be the persons eligible to participate in the Plan, consisting of the Corporation’s “Executive Officers” (as defined under Rule 3b-7 under the Securities Exchange Act of 1934, as amended) and other named participants, as determined by the Committee from time to time.  As of the effective date of the Plan, the Participants are (i) the President & Chief Executive Officer; (ii) the Chief Financial Officer; (iii) the Chief Technology Officer; (iv) the Vice President, Corporate Administration & Secretary; (v) the Executive Vice President of Worldwide Sales & Marketing; (vi) the Sr. Vice President Global Operations, (vii) Other Vice Presidents, (viii) those individuals who directly report to the Vice Presidents  at the Sr. Director and Director Level, (ix) those individuals who manager a group or function (Manager Level) who report to a Officer, Vice President, Sr. Director, Director and (x) Satcon Fellows.

 

Section 3: Plan Administration

 

The Committee shall have sole and complete discretion to administer and interpret the Plan with respect to the Participants.  The decisions of the Committee concerning administration and interpretation of the Plan shall be final and binding. The Plan shall continue in its current form until and unless action is taken by the Board to modify or terminate the Plan.

 

Section 4: Plan Year

 

The Plan performance year shall be the Company’s fiscal year (January 1 — December 31, 2011). After the end of the fiscal year, cash incentive payments earned under the Plan shall be determined and approved by the Committee in accordance with the provisions of the Plan.

 

Section 5: Performance Targets and Measurement

 

The Plan, which has been approved by the Committee and the Board, outlines general performance goals and business criteria upon which each Participant’s performance will be evaluated.  Specific performance goals and business criteria will be subsequently approved by the Committee.  Performance will be measured against these specific performance goals and business criteria, which will be established for each functional area of the organization.  Generally, (i) for the President & CEO, performance will be evaluated based on overall corporate objectives and (ii) for all other Participants, performance will be evaluated based on relevant operations, sales & marketing, engineering, finance and administration objectives.

 

General 2011 objectives are summarized as follows:

 

President & CEO — Corporate:  Overall corporate objectives will include objectives related to the Company’s focus and market position, growth, product/service quality, profitability, financial condition, business practices, and establishment of prudent governance practices.

 

Operations:  Operations objectives will include objectives related to business operating models, manufacturing and plant capacity, customer performance and long-term strategies.

 

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Sales & Marketing:  Sales & marketing objectives will include objectives related to direct sales team organization, sales methodology, forecast methodology and customer relationship management systems, global business development and channels organization, branding initiatives and field services organization.

 

Engineering:  Engineering objectives will include objectives related to product quality, design processes and new products.

 

Finance:  Finance objectives will include objectives related to management information, information systems, planning processes, financial operating models and control environment.

 

Administration:  Administration objectives will include objectives related to compensation strategy, performance management systems, annual cash incentive programs, rewards programs, training, staffing, facilities, safety, internet access, IT system upgrades and general administration.

 

Section 6:  2011 Potential Incentive Award Opportunity

 

·                  President & CEO:

 

·                  Up to 60% of Base Salary upon attainment of 100% of Corporate target objectives

 

·                  Other Executive Officers & Vice Presidents:

 

·                  Up to 30% of Base Salary in total - half of which is based upon attainment of 100% of personal target objectives and half of which is based upon attainment of 100% of Corporate target objectives.

 

·                  Other (Director Level and Manager Level) Participants:

 

·                  Up to 20% of Base Salary in total for Director Level participants (including Satcon Fellows) - half of which is based upon attainment of 100% of personal target objectives and half of which is based upon attainment of 100% of Corporate target objectives

 

·                  Up to 10% of Base Salary in total for Manager Level participants - half of which is based upon attainment of 100% of personal target objectives and half of which is based upon attainment of 100% of Corporate target objectives

 

Section 7: Earning an Award

 

The President & CEO annually reviews other Participant’s performance with the Committee and makes recommendations to the Committee with respect to the appropriate payments to be made under the Plan.  Based in part on the CEO’s recommendations and other considerations, the Committee approves the incentive payments (other than the CEO).  The Compensation Committee independently evaluates the performance of the CEO and determines and approves the incentive payment earned for the given performance period.

 

Section 8: Final Approval

 

After determining and approving incentive payments under the Plan, as discussed in Section 7 above, the Committee will then recommend to the Board payments to be made under the Plan. The Board must approve payments made under the Plan.  Final determination of any and all employee compensation will be based on the sole discretion of the Compensation Committee with Board of Director approval. Any payments under the Plan shall be paid by March 31, 2012.

 

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Section 9: Other Provisions

 

(a)                                  Earning a Payment Under the Plan.  Payments under the Plan shall not be earned until they are approved by the Board in accordance with Section 8 above. In addition, payments under the Plan shall not be earned if, on the final date of the fiscal year, the Participant is not in compliance with either his or her employment agreement (if any) or the non-disclosure agreement.  A Participant is entitled to payment under the Plan, if earned (which requires approval of the Board), if the Participant is employed on the last day of the fiscal year, subject to the prior sentence and Sections 9(e) and 9(f) below.

 

(b)                                 Plan Amendment.  The Board may, at any time and from time to time, amend, alter, suspend, discontinue or terminate the Plan, as it deems necessary or appropriate to achieve the purposes of the Plan or for other business reasons.

 

(c)                                  No Right to Employment.  The existence of this Plan shall not be construed as giving a Participant the right to continued employment or any future right to participate in the Plan.

 

(d)                                 Other Corporate Benefit and Compensation Programs.  Participation in this Plan shall not be deemed as part of a Participant’s regular, recurring compensation for purposes of calculating payments or benefits from any Company benefit or severance program (or severance pay law of any country) unless otherwise specified in the particular benefit plan or benefit plan documents.

 

(e)                                  Retirement, Disability or Death.  In the event a Participant would otherwise earn an incentive award pursuant to this Plan, but the Participant does not qualify because of the Participant’s death, disability or retirement, then the Participant shall be deemed to have “earned” his or her award, subject to the approval by the Board.  The term “disability” shall have the meaning ascribed to such term in the employment agreement between the Participant and the Company (or, in the event that the Participant does not have any employment agreement with the Company, shall mean “the inability to perform services for the Company for an aggregate of 90 days during any 365-day period”). The Committee shall interpret the term “retirement”.

 

(f)                                    Employment for a Portion of a Plan Year.  The CEO may recommend and the Committee, at its sole discretion, may permit a Participant to participate in the Plan during a fiscal year in which the Participant was not employed by the Company for the full fiscal year. Such participation may be on a pro rata basis or on such other basis as the Committee determines.

 

(g)                                 Unfunded Plan.  The Plan shall be unfunded and shall not create (or be construed to create) a trust or separate fund(s). Likewise, the Plan shall not establish any fiduciary relationship between the Company and any other Participant or other person. To the extent that any person holds any rights by virtue being a Participant under the Plan, such right shall be no greater than the right of an unsecured general creditor of the Company.

 

(h)                                 Successors and Assignees.  The Plan shall be binding on all successors and assignees of a Participant, including, without limitation, the estate of such Participant and the executor, administrator or trustee of such estate, or any receiver or trustee in bankruptcy or representative of the Participant’s creditors.

 

(i)                                     Governing Law.  The validity, construction and effect to the Plan and any actions taken under the Plan shall be determined in accordance with applicable laws of the State of Delaware.

 

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