Document:

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. RhoadesEXHIBIT 10.2

 

SATCON TECHNOLOGY CORPORATION

NON-QUALIFIED STOCK OPTION AGREEMENT

 

1.                                       Grant of Option .  This
Non-Qualified Stock Option Agreement evidences the grant by SatCon Technology
Corporation (the “Company”), as of May 1, to Charles S. Rhoades (the “Optionee”)
an option (the “Option”) to purchase up to 4,796,020 shares of the Company’s
Common Stock, par value $0.01 per share (the “Shares”) at an exercise price per
share equal to $1.90, the closing bid price of a share of the Company’s Common
Stock on the Nasdaq Stock Market on May 1, 2008 (the “Exercise Price”). 
The Option shall be subject to the terms and conditions set forth herein. 
The Option was not issued pursuant to the Company’s 2005 Incentive Compensation
Plan (the “Plan”).  Nevertheless, the
terms and conditions of the Plan are incorporated herein for all purposes and
except as set forth explicitly herein this Option shall be treated for all
purposes as if it had been issued pursuant to the Plan.  The Option is a
Non-Qualified Stock Option, and not an Incentive Stock Option.  The
Optionee hereby acknowledges receipt of a copy of the Plan and agrees to be
bound by all of the terms and conditions hereof and thereof and all applicable
laws and regulations.

 

2.                                       Definitions .  Unless
otherwise provided herein, terms used herein that are defined in the Plan and
not defined herein shall have the meanings attributed thereto in the Plan.

 

3.                                       Exercise
Schedule .  Except as otherwise provided in Sections 6
or 9 of this Agreement, or in the Plan, the Option will become exercisable (“vest”)
in accordance with the following schedule, provided that the Continuous Service
of the Optionee continues through and on the applicable vesting date (each, a “Vesting
Date”):

 

	
  Percentage of Shares

  	
   

  	
  Vesting Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  25%

  	
   

  	
  May 1, 2009

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  6.25%

  	
   

  	
  Each of August 1 and
  November 1, 2009 and February 1 and May 1, 2010

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  6.25%

  	
   

  	
  Each of August 1 and
  November 1, 2010 and February 1 and May 1, 2011

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  6.25%

  	
   

  	
  Each of August 1 and
  November 1, 2011 and February 1 and May 1, 2012

  	
   

  

 

.To the extent that the
Option has become exercisable with respect to a percentage of Shares, the
Option may thereafter be exercised by the Optionee, in whole or in part, at any
time or from time to time prior to the expiration of the Option as provided
herein. Except as otherwise specifically provided herein, there shall be no
proportionate or 

 

 

partial vesting in the
periods prior to each Vesting Date, and all vesting shall occur only on the
appropriate Vesting Date. Upon the termination of the Optionee’s Continuous
Service with the Company and its Related Entities, any unvested portion of the
Option shall terminate and be null and void.

 

4.                                       Method of
Exercise .  The vested portion of this Option shall be
exercisable in whole or in part in accordance with the exercise
schedule set forth in Section 3 hereof by written notice which shall
state the election to exercise the Option, the number of Shares in respect of
which the Option is being exercised, and such other representations and agreements
as to the holder’s investment intent with respect to such Shares as may be
required by the Company pursuant to the provisions of the Plan.  Such
written notice shall be signed by the Optionee and shall be delivered in person
or by certified mail to the Secretary of the Company.  The written notice
shall be accompanied by payment of the Exercise Price.  This Option shall
be deemed to be exercised after both (a) receipt by the Company of such
written notice accompanied by the Exercise Price and (b) arrangements that
are satisfactory to the Committee in its sole discretion have been made for
Optionee’s payment to the Company of the amount, if any, that is necessary to
be withheld in accordance with applicable Federal or state withholding
requirements.  No Shares will be issued pursuant to the Option unless and
until such issuance and such exercise shall comply with all relevant provisions
of applicable law, including the requirements of any stock exchange upon which
the Shares then may be traded.

 

5.                                       Method of
Payment .  Payment of the Exercise Price shall be by any of the
following, or a combination thereof, at the election of the Optionee:  (a) cash;
(b) check; (c) with Shares that have been held by the Optionee for at
least 6 months (or such other Shares as the Company determines will not cause
the Company to recognize for financial accounting purposes a charge for
compensation expense), (d) pursuant to a “cashless exercise” procedure, by
delivery of a properly executed exercise notice together with such other
documentation, and subject to such guidelines, as the Committee shall require
to effect an exercise of the Option and delivery to the Company by a licensed
broker acceptable to the Company of proceeds from the sale of Shares (or, to
the extent permitted by the Committee, a margin loan) sufficient to pay the
Exercise Price and any applicable income or employment taxes, or (e) such
other consideration or in such other manner as may be determined by the
Committee in its absolute discretion.

 

6.                                       Termination of
Option.

 

(a)                                  Any unexercised
portion of the Option shall automatically and without notice terminate and
become null and void at the time of the earliest to occur of the following:

 

(i)                                     unless the
Company otherwise determines in writing in its sole discretion, three months
after the date on which the Optionee’s Continuous Service is terminated for any
reason other than by reason of (A) a termination by the Company or a
Related Entity for Cause, (B) a Disability of the Optionee as determined
by a medical doctor satisfactory to the Company, (C) the death of the
Optionee, (D) the occurrence of 

 

 

a
Constructive Termination, or (E) a termination by the Company or a Related
Entity for a reason other than for Cause;

 

(ii)                                immediately
upon the termination of the Optionee’s Continuous Service by the Company or a
Related Entity for Cause;

 

(iii)                             12 months after
the date on which the Optionee’s Continuous Service is terminated by reason of
a Disability as determined by a medical doctor satisfactory to the Company;

 

(iv)                            12 months after
the date of termination of the Optionee’s Continuous Service by reason of the
death of the Optionee (or, if later, 3 months after the date on which the
Optionee shall die if such death shall occur during the one year period specified
in paragraph (iii) of this Section 5);

 

(v)                               12 months after
the date of termination of Optionee’s Continuous Service by reason of a
Constructive Termination (other than a Constructive Termination under the
circumstances referred to in subsection vii below);

 

(vi)                            12 months after
the date of termination of Optionee’s Continuous Service by the Company without
Cause (other than a termination without Cause under the circumstances referred
to in subsection vii below);

 

(vii)                         24 months after
the date of termination of Optionee’s Continuous Service by reason of a
Constructive Termination or a termination without Cause that results in an
acceleration of exercisability of the Option under the last sentence of Section 9(b) hereof;
or

 

(vii)                         the tenth
anniversary of the date as of which the Option is granted.

 

7.                                       Transferability .  Unless
otherwise determined by the Committee, the Option granted hereby is not
transferable otherwise than by will or under the applicable laws of descent and
distribution, and during the lifetime of the Optionee the Option shall be
exercisable only by the Optionee, or the Optionee’s guardian or legal
representative. In addition, the Option shall not be assigned, negotiated,
pledged or hypothecated in any way (whether by operation of law or otherwise),
and the Option shall not be subject to execution, attachment or similar
process. Upon any attempt to transfer, assign, negotiate, pledge or hypothecate
the Option, or in the event of any levy upon the Option by reason of any
execution, attachment or similar process contrary to the provisions hereof, the
Option shall immediately become null and void.  The terms of this Option
shall be binding upon the executors, administrators, heirs, successors and
assigns of the Optionee.

 

8.                                       No Rights of Stockholders . 
Neither the Optionee nor any personal representative (or beneficiary) shall be,
or shall have any of the rights and privileges of, a stockholder of the Company
with respect to any shares of Stock purchasable or issuable 

 

 

upon the exercise of the
Option, in whole or in part, prior to the date of exercise of the Option.

 

9.                                       Acceleration of
Exercisability of Option .

 

(a)                                  This Option
shall become immediately fully exercisable in the event that, prior to the
termination of the Option pursuant to Section 6 hereof, and during the
Optionee’s Continuous Service, there is a “Change in Control,” as defined in Section 9(b) of
the Plan.

 

(b)                                 Notwithstanding
the foregoing, if in the event of a Change in Control the successor company
assumes or substitutes for the Option, the vesting of the Option shall not be
accelerated as described in Section 9(a).  For the purposes of this
paragraph, the Option shall be considered assumed or substituted for if
following the Change in Control the Option or substituted option confers the
right to purchase, for each Share subject to the Option immediately prior to
the Change in Control, the consideration (whether stock, cash or other
securities or property) received in the transaction constituting a Change in
Control by holders of Shares for each Share held on the effective date of such
transaction (and if holders were offered a choice of consideration, the type of
consideration chosen by the holders of a majority of the outstanding shares);
provided, however, that if such consideration received in the transaction
constituting a Change in Control is not solely common stock of the successor
company or its parent or subsidiary, the Committee may, with the consent of the
successor company, or its parent or subsidiary, provide that the consideration
to be received upon the exercise or vesting of the Option will be solely common
stock of the successor company or its parent or subsidiary substantially equal
in fair market value to the per share consideration received by holders of
Shares in the transaction constituting a Change in Control.  The
determination of such substantial equality of value of consideration shall be
made by the Committee in its sole discretion and its determination shall be
conclusive and binding.  Notwithstanding the foregoing, in the event of a
termination of the Optionee’s employment in such successor company that
constitutes a termination without Cause or a Constructive Termination within 12
months following such Change in Control, the option held by the Optionee at the
time of the Change in Control shall be accelerated as described in paragraph (a) of
this Section 9.

 

10.                                 No Right to
Continued Employment or Service .  Neither the Option
nor this Agreement shall confer upon the Optionee any right to continued
employment or service with the Company or any Related Entity.

 

11.                                 Law Governing .  This
Agreement shall be governed in accordance with and governed by the internal
laws of the State of Delaware.

 

12.                                 Interpretation
/ Provisions of Plan Control .  This Agreement is
subject to all the terms, conditions and provisions of the Plan, including,
without limitation, the amendment provisions thereof, and to such rules,
regulations and interpretations relating to the Plan adopted by the Committee
as may be in effect from time to time. If and to the 

 

 

extent that this Agreement
conflicts or is inconsistent with the terms, conditions and provisions of the
Plan, the Plan shall control, and this Agreement shall be deemed to be modified
accordingly. The Optionee accepts the Option subject to all of the terms and
provisions of the Plan and this Agreement.  The undersigned Optionee
hereby accepts as binding, conclusive and final all decisions or
interpretations of the Committee upon any questions arising under the Plan and
this Agreement.

 

13.                                 Notices .  Any
notice under this Agreement shall be in writing and shall be deemed to have
been duly given when delivered personally or when deposited in the United
States mail, registered, postage prepaid, and addressed, in the case of the
Company, to the Company’s Secretary at 27 Drydock Avenue, Boston, MA 02110, or
if the Company should move its principal office, to such principal office, and,
in the case of the Optionee, to the Optionee’s last permanent address as shown
on the Company’s records, subject to the right of either party to designate
some other address at any time hereafter in a notice satisfying the
requirements of this Section.

 

14.                                 Counterparts .  This
Agreement may be executed in two or more separate counterparts, each of which
shall be an original, and all of which together shall constitute one and the
same agreement.

 

IN WITNESS WHEREOF SatCon
Technology Corporation has hereunto set its hand and seal as of the 1st day of
May, 2008.

 

SATCON TECHNOLOGY
CORPORATION

 

 

	
  By:

  	
      /s/
  John Carroll

  	
   

  
	
   

  
	
   

  
	
  OPTIONEE’S ACKNOWLEDGEMENT

  

 

The Optionee acknowledges
receipt of a copy of the Plan and represents that he or she has reviewed the
provisions of the Plan and this Option Agreement in their entirety, is familiar
with and understands their terms and provisions, and hereby accepts this Option
subject to all of the terms and provisions of the Plan and the Option
Agreement.  The Optionee further represents that he or she has had an
opportunity to obtain the advice of counsel prior to executing this Option
Agreement.

 

	
  Dated:

  	
  May 1, 2008

  	
   

  	
  OPTIONEE :

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Charles S. Rhoades

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

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