Document:

EXHIBIT 10.3

 

 

March 3, 2010

 

Donald R. Peck

58 North Street

Lexington, Massachusetts 02420

 

Dear Don:

 

Satcon Technology Corporation (“Satcon” or the “Company”),
an employer at will, is pleased to confirm our offer of employment to you as
Chief Financial Officer & Treasurer reporting to the President and
Chief Executive Officer.

 

Compensation

 

Your starting base salary will be $300,000 per
annum payable in substantially equal bi-weekly installments of $11,540.00.

 

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 2010 Incentive Plan
for Management, a copy of which is attached hereto as Exhibit A.

 

We are also offering you two stock options, one
in the amount of 500,000 shares of our Common Stock that will be issued under
Satcon’s 2005 Incentive Compensation Plan (the “Plan”) and one that will be
issued outside of the Plan in the amount of 500,000 shares of our Common Stock (individually,
an “Option” and, collectively, the “Options”). 
Shares exercisable under the Options shall vest in accordance with the
following schedule: (i) one-quarter of the shares underlying each Option
shall vest on the first anniversary of your employment commencement date, and (ii) one-twelfth
of the shares underlying each Option shall vest on each quarterly anniversary
of your employment commencement date commencing with the fifth quarterly
anniversary of your employment commencement date (250,000 in the aggregate per
year).  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 SatCon’s amended 2005 Stock Incentive Plan (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. The
Options 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 with respect to the Option
being issued outside of the Plan.  We
will file a Registration Statement on Form S-8 following your employment
commencement date covering the Option being issued outside of the Plan and the
shares issuable thereunder.

 

The exercise price of the Options 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 your employment with Satcon
commences.  Satcon will prepare and
provide you with a copy of the Options 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 Financial 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 move your principal residence to a location that is
more than 35 miles from Boston, Massachusetts; and you provide the Company with
15 days notice of such reduction 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, 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; or (C) that you have been enjoined or
otherwise prevented by court order (whether temporarily or permanently) from performing
your full duties as Chief Financial Officer 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.

 

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 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 also hereby represent and warrant to the
Company, as a material inducement to the Company’s entering into this
Employment Offer Letter, that you are not subject to any commitment or obligation,
contractual or at law, that restricts your ability to serve as Chief Financial
Officer of the Company or that could materially interfere with your full
performance of your duties as such.

 

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.

 

Don, I trust that you will find the CFO &
Treasurer position offered both challenging and rewarding.  We all very much look forward to your
becoming a part of Satcon.

 

 

Sincerely,

 

	
  /s/
  Charles S. Rhoades

  	
   

  
	
   

  	
   

  
	
  Charles
  S. Rhoades, President and Chief Executive Officer

  	
   

  
	
  Satcon Technology Corporation

  	
   

  

 

 

AGREED TO AND ACCEPTED

 

 

	
  /s/
  Donald R. Peck

  	
   

  
	
  Donald R. PeckExhibit 10.4

 

SATCON TECHNOLOGY CORPORATION

INCENTIVE STOCK OPTION AGREEMENT

 

Agreement

 

1.             Grant of Option.  This Incentive Stock Option Agreement
evidences the grant by SatCon Technology Corporation (the “Company”), as of March 15,
2010, to Donald R. Peck (the “Optionee”) an option (the “Option”) to purchase
up 500,000 shares of the Company’s Common Stock, par value $0.01 per share (the
“Shares”) at an exercise price per share of $2.33 (the “Exercise Price”).  The Option shall be subject to the terms and conditions
set forth herein.  The Option was issued
pursuant to the Company’s 2005 Incentive Compensation Plan (the “Plan”), which
is incorporated herein for all purposes. 
Subject to the terms of Section 14 hereof, the Option is an
Incentive Stock Option, and not a Non-Qualified 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 schedule set forth in the Notice, 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

  	
  %

  	
  March 15,
  2011

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  6.25

  	
  %

  	
  Each
  of June 15, September 15, and December 15, 2011 and
  March 15, 2012

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  6.25

  	
  %

  	
  Each
  of June 15, September 15, and December 15, 2012 and
  March 15, 2013

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  6.25

  	
  %

  	
  Each
  of June 15, September 15, and December 15, 2013 and
  March 15, 2014

  	
   

  

 

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 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 Options.  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:

 

(a)           unless the Committee otherwise
determines in writing in its sole discretion, ninety (90) days after the date
on which the Optionee’s Continuous Service with the Company and its Related
Entities is terminated for any reason other than by reason of (i) termination
of the Optionee’s Continuous Service by the Company or a Related Entity for
Cause (as defined in Optionee’s Employment Agreement dated March 3, 2010),
(ii) a Disability of the Optionee, (iii) the Optionee’s death, (iv) the
occurrence of a Constructive Termination (as defined in Optionee’s Employment
Agreement dated March 3, 2010) or (v) a termination by the Company or
a Related Entity for a reason other than for Cause;

 

(b)           immediately upon the termination of
the Optionee’s Continuous Service with the Company and its Related Entities for
Cause;

 

2

 

(c)           twelve (12) months after the date on
which the Optionee’s Continuous Service with the Company and its Related
Entities is terminated by reason of a Disability;

 

(d)           twelve (12) months after the date of
termination of the Optionee’s Continuous Service with the Company and its
Related Entities by reason of the death of the Optionee (or, if later, three (3) months
after the date on which the Optionee shall die if such death shall occur during
the one year period specified in paragraph (c) of this Section 6);

 

(e)           twelve (12) months after the Optionee
is Constructively Terminated;

 

(f)            twelve (12) months after the date of
termination of Optionee’s Continuous Service by the Company without Cause; or

 

(g)           the tenth (10th) anniversary of the
date as of which the Option is granted.

 

7.             Transferability.  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.  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, all unvested
shares under the Option will immediately vest and the Optionee shall have the
right to exercise the Option at or prior to the closing of the Change in
Control transaction.  In the event that
the Optionee chooses not to exercise the Option at or prior to the Change in
Control transaction, the Option will be accorded the same treatment as other
outstanding vested options under the Plan are accorded under the terms of the
Change in Control transaction.

 

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.

 

3

 

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.           Incentive Stock Option Treatment.  The terms of this Option shall be interpreted
in a manner consistent with the intent of the Company and the Optionee that the
Option qualify as an Incentive Stock Option under Section 422 of the
Code.  If any provision of the Plan or
this Agreement shall be impermissible in order for the Option to qualify as an
Incentive Stock Option, then the Option shall be construed and enforced as if
such provision had never been included in the Plan or the Option.  If and to the extent that the number of
Options granted pursuant to this Agreement exceeds the limitations contained in
Section 4(b) of the Plan on the value of Shares with respect to which
this Option may qualify as an Incentive Stock Option, the excess portion of the
Option shall be deemed a Non-Qualified Stock Option.

 

15.           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.

 

4

 

IN
WITNESS WHEREOF SatCon Technology Corporation has hereunto set its hand and
seal as of the 19th day of April, 2010.

 

	
  SATCON
  TECHNOLOGY CORPORATION

  
	
   

  
	
   

  
	
  By:

  	
  /s/
  Charles S Rhoades

  	
   

  

 

 

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:

  	
  April 28,
  2010

  	
   

  	
  OPTIONEE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Donald R. Peck

  
	
   

  	
  Name:

  	
  Donald
  R. Peck

  
						

 

5

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