SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
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Filed by a Party other than the Registrant |_|
Check the appropriate box:
|_| Preliminary Proxy Statement |_| Soliciting Material Under Rule
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Commission Only (as permitted
by Rule 14a-6(e)(2))
|X| Definitive Proxy Statement
|_| Definitive Additional Materials
GREENMAN TECHNOLOGIES, INC.
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(Name of Registrant as Specified In Its Charter)
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previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
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GREENMAN TECHNOLOGIES, INC.
12498 Wyoming Avenue South
Savage, Minnesota, 55378
NOTICE OF ANNUAL
MEETING OF STOCKHOLDERS
To Be Held March 29, 2007
To Our Stockholders:
The Annual Meeting of Stockholders (the "Meeting") of GreenMan
Technologies, Inc. (together with its subsidiaries, "we", "us" or "our"), a
Delaware corporation, will be held on Thursday, March 29, 2007, at 11:00 A.M at
the Fairfield Inn, 14350 Nicollet Court, Burnsville, Minnesota, 55306 for the
following purposes:
1. To elect five members of our Board of Directors.
2. To consider and act upon a proposal to ratify the selection of the firm of
Schechter, Dokken, Kanter, Andrews & Selcer, Ltd. as our independent
auditors for the fiscal year ending September 30, 2007.
3. To transact such other business as may properly come before the Meeting
and any adjournments thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only stockholders of record at the close of business on February 9, 2007
are entitled to notice of and to vote at the Meeting.
All stockholders are cordially invited to attend the Meeting in person.
However, to assure your representation at the Meeting, you are urged to mark,
sign, date and return the enclosed proxy card as promptly as possible in the
postage-prepaid envelope enclosed for that purpose. Any stockholder attending
the Meeting may vote in person even if he or she has returned a proxy.
By Order of the Board of Directors
LYLE JENSEN
Chief Executive Officer
February 27, 2007
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING. WHETHER OR NOT
YOU PLAN TO ATTEND THE MEETING, PLEASE SIGN THE ENCLOSED PROXY CARD AND RETURN
IT PROMPTLY IN THE ENCLOSED STAMPED ENVELOPE.
GREENMAN TECHNOLOGIES, INC.
12498 Wyoming Avenue South
Savage, Minnesota, 55378
PROXY STATEMENT
February 27, 2007
Proxies in the form enclosed with this proxy statement are solicited by
our Board of Directors (the "Board of Directors") at our expense for use at the
Annual Meeting of Stockholders (the "Meeting") to be held at 11:00 AM on March
29, 2007 at the Fairfield Inn, 14350 Nicollet Court, Burnsville, Minnesota,
55306.
Only stockholders of record as of February 9, 2007 will be entitled to
vote at the Meeting and any adjournments thereof. As of that date, 21,525,680
shares of our Common Stock, par value $.01 per share, were issued and
outstanding. The holders of our common stock are entitled to one vote per share
on any proposal presented at the Meeting. Stockholders may vote in person or by
proxy.
Execution of a proxy will not in any way affect a stockholders' right to
attend the Meeting and vote in person. Any stockholder giving a proxy has the
right to revoke it at any time before it is exercised by attending the Meeting
and voting in person or filing with our Secretary either a written instrument
revoking the proxy or another executed proxy bearing a later date.
All properly executed proxies returned in time to be counted at the
Meeting will be voted. With respect to the election of our Board of Directors,
shares represented by proxies will be voted as stated below under "Election of
Directors." Any stockholder submitting a proxy has the right to withhold
authority to vote for any individual nominee to the Board of Directors by
writing that nominee's name on the space provided on the proxy. In addition, the
stockholders will consider and vote upon a proposal to ratify the selection of
Schechter, Dokken, Kanter, Andrews & Selcer, Ltd. as our independent auditors,
as further described in this proxy statement. Where a choice has been specified
on the proxy with respect to such matter, the shares represented by the proxy
will be voted in accordance with the specification and will be voted FOR if no
specification is made.
The representation in person or by proxy of a majority of the outstanding
shares of our common stock entitled to vote at the Meeting is necessary to
establish a quorum for the transaction of business. Votes withheld from any
nominee, abstentions and broker non-votes are counted as present or represented
for purposes of determining the presence or absence of a quorum. A "non-vote"
occurs when a broker holding shares for a beneficial owner votes on one
proposal, but does not vote on another proposal because the broker does not have
discretionary voting power and has not received instructions from the beneficial
owner. Directors are elected by a plurality of the votes cast by stockholders
entitled to vote at the Meeting. The proposal to ratify the selection of
Schechter, Dokken, Kanter, Andrews & Selcer, Ltd. as our independent auditors
requires the affirmative vote of the majority of shares present in person or
represented by proxy at the Meeting. An automated system administered by our
transfer agent tabulates the votes. The vote on each matter submitted to
stockholders is tabulated separately. Abstentions are included in the number of
shares present or represented and voting on each matter.
The Board of Directors knows of no other matter to be presented at the
Meeting. If any other matter should be presented at the Meeting upon which a
vote properly may be taken, shares represented by all proxies received by us
will be voted with respect thereto in accordance with the judgment of the
persons named as attorneys in the proxies.
Our Annual Report, containing financial statements for fiscal year ended
September 30, 2006 is being mailed contemporaneously with this proxy statement
to all stockholders entitled to vote. This proxy statement and the form of proxy
were first mailed to stockholders on or about February 27, 2007.
2
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding beneficial
ownership of our common stock as of February 9, 2007:
o by each person (including any "group" as used in Section 13(d) of
the Securities Exchange Act of 1934) who is known by us to own
beneficially 5% or more of the outstanding shares of common stock;
o by each of our directors and officers; and
o by all of our directors and officers as a group.
Unless otherwise indicated below, to the best of our knowledge, all
persons listed below have sole voting and investment power with respect to their
shares of common stock, except to the extent authority is shared by spouses
under applicable law. As of February 9, 2007, 21,525,680 shares of our common
stock were issued and outstanding.
Security Ownership of Management and Directors
Number of Shares Percentage
Name (1) Beneficially Owned (2) of Class (2)
-------- ---------------------- ------------
Dr. Allen Kahn (3)................................. 4,507,602 20.77%
Maurice E. Needham (4)............................. 2,401,204 10.63%
Charles E. Coppa (5)............................... 752,928 3.44%
Nicholas DeBenedictis (6).......................... 711,306 3.30%
Lyle Jensen (7).................................... 568,022 2.63%
Lew F. Boyd (8).................................... 401,072 1.85%
All officers and directors
as a group (6 persons)............................. 9,342,134 40.09%
Security Ownership of Certain Beneficial Owners
Number of Shares Percentage
Name (1) Beneficially Owned of Class
-------- ------------------ --------
Robert H. Davis (9) ............................... 703,700 3.27%
Laurus Master Fund, Ltd. (10)...................... 1,074,131 4.99%
----------
(1) Except as noted, each person's address is care of GreenMan Technologies,
Inc., 12498 Wyoming Avenue South, Savage, Minnesota, 55378.
(2) Pursuant to the rules of the Securities and Exchange Commission, shares of
common stock that an individual or group has a right to acquire within 60
days pursuant to the exercise of options or warrants are deemed to be
outstanding for the purpose of computing the percentage ownership of such
individual or group, but are not deemed to be outstanding for the purpose
of computing the percentage ownership of any other person shown in the
table.
(3) Includes 181,033 shares of common stock issuable pursuant to immediately
exercisable stock options and warrants.
(4) Includes 1,072,865 shares of common stock issuable pursuant to immediately
exercisable stock options and warrants. Also includes 59,556 shares of
common stock owned by Mr. Needham's wife.
(5) Includes 366,000 shares of common stock issuable pursuant to immediately
exercisable stock options.
(6) Includes 350,000 shares of common stock owned by Mr. DeBenedictis's wife.
(7) Includes 33,000 shares of common stock issuable pursuant to immediately
exercisable stock options.
(8) Includes 124,894 shares of common stock issuable pursuant to immediately
exercisable stock options.
(9) Mr. Davis's address is 1501 W. Gladstone Street, Azusa, California, 91702.
(10) Laurus Master Fund, Ltd. holds warrants to purchase up to 6,000,000 shares
of common stock that are exercisable (subject to the following sentence)
at an exercise price of $.01 per share. The warrants are not exercisable,
however, to the extent that (a) the number of shares of our common stock
held by Laurus and (b) the number of shares of our common stock issuable
upon exercise of the warrant would result in beneficial ownership by
Laurus of more than 4.99% of our outstanding shares of common stock.
Laurus may waive these provisions, or increase or decrease that
percentage, with respect to the warrant on 61 days' prior notice to us, or
without notice if we are in default under our credit facility. Unless and
until Laurus waives these provisions, then Laurus beneficially owns
1,074,131shares of our common stock issuable pursuant to underlying
warrant. Laurus's address is 825 Third Avenue, 14th Floor, New York, New
York 10022.
3
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Pursuant to Proposal No. 1, the five nominees listed below will be
nominated to serve until the next Annual Meeting of Stockholders and until their
successors are elected. Officers are elected by and serve at the discretion of
the Board of Directors, subject to their employment contracts.
Shares represented by all proxies received by the Board of Directors and
not so marked to withhold authority to vote for any individual nominee will be
voted (unless one or more nominees are unable or unwilling to serve) FOR the
election of all nominees. The Board of Directors knows of no reason why any such
nominees should be unable or unwilling to serve, but if such should be the case,
proxies may be voted for the election of some other person or for fixing the
number of directors at a lesser number.
The following information is set forth with respect to each nominee for
election as a director.
Year Term
Nominee's Name Position(s) Held Will Expire
-------------- ---------------- -----------
Maurice E. Needham................. Chairman of the Board 2008
Lyle Jensen........................ Chief Executive Officer, President and Director 2008
Dr. Allen Kahn..................... Director 2008
Lew F. Boyd........................ Director 2008
Nicholas DeBenedicitis ............ Director 2008
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE NOMINEES LISTED ABOVE.
OCCUPATIONS OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth all of the candidates for election of
directors at the Meeting, and our executive officers, their ages, and the
positions held by each such person within our company.
Our directors, nominees and executive officers are as follows:
Name Age Position
--- --------
Maurice E. Needham ............. 66 Chairman of the Board of Directors
Lyle Jensen..................... 56 Chief Executive Officer; President; Director
Charles E. Coppa ............... 43 Chief Financial Officer; Treasurer; Secretary
Dr. Allen Kahn.................. 86 Director
Lew F. Boyd .................... 61 Director
Nicholas DeBenedictis........... 47 Director
Each director is elected for a period of one year at the annual meeting of
stockholders and serves until his or her successor is duly elected by the
stockholders. The officers are appointed by and serve at the discretion of the
Board of Directors. During fiscal 2006, the Board agreed that each outside
director would receive $2,500 per quarter in recognition of the increased
frequency of telephonic Board meetings. Previously, outside directors received
$2,500 per meeting attended. In addition, during fiscal 2006, the Compensation
Committee agreed to discontinue future option grants made to outside directors
pursuant the Non-Employee Director Stock Option Plan.
We have established an Audit Committee consisting of Messrs. DeBenedictis
(Chair) and Boyd and Dr. Kahn, and a Compensation Committee consisting of
Messrs. Boyd (Chair), Needham and DeBenedictis. Our Board of Directors has
determined that Mr. DeBenedicits is an "audit committee financial expert" within
the meaning given that term by Item 401(e) of Regulation S-B and that Mr.
DeBenedictis is "independent" within the meaning given to that term by Item
7(d)(3)(iv) of Schedule 14A under the Exchange Act. On April 12, 2006 Mr. Jensen
resigned as Chair of the Audit Committee and as a member of the Compensation
Committee and Mr. DeBenedictis became Chair of the Audit Committee and joined
the Compensation Committee.
4
MAURICE E. NEEDHAM has been Chairman since June 1993. From June 1993 to
July 21, 1997, Mr. Needham also served as Chief Executive Officer. He has also
served as a Director of Comtel Holdings, an electronics contract manufacturer
from 1999 to 2003. He previously served as Chairman of Dynaco Corporation, a
manufacturer of electronic components which he founded in 1987. Prior to 1987,
Mr. Needham spent 17 years at Hadco Corporation, a manufacturer of electronic
components, where he served as President, Chief Operating Officer and Director.
LYLE JENSEN has been a Director since May 2002. On April 12, 2006, Mr.
Jensen became our Chief Executive Officer. Mr. Jensen previously was Executive
Vice President/Chief Operations Officer of Auto Life Acquisition Corporation, an
automotive aftermarket leader of fluid maintenance equipment. Prior to that he
was a Business Development and Operations consultant after holding executive
roles as Chief Executive Officer and minority owner of Comtel and Corlund
Electronics, Inc. He served as President of Dynaco Corporation from 1988 to
1997; General Manager of Interconics from 1984 to 1988 and various financial and
general management roles within Rockwell International from 1973 to 1984.
CHARLES E. COPPA has served as Chief Financial Officer, Treasurer and
Secretary since March 1998. From October 1995 to March 1998, he served as
Corporate Controller. Mr. Coppa was Chief Financial Officer and Treasurer of
Food Integrated Technologies, a publicly-traded development stage company from
July 1994 to October 1995. Prior to joining Food Integrated Technologies, Inc.,
Mr. Coppa served as Corporate Controller for Boston Pacific Medical, Inc., a
manufacturer and distributor of disposable medical products, and Corporate
Controller for Avatar Technologies, Inc., a computer networking company.
ALLEN KAHN, M.D., has been a Director since March 2000. Dr. Kahn operated
a private medical practice in Chicago, Illinois, which he founded in 1953 until
his retirement in October 2002. Dr. Kahn has been actively involved as an
investor in "concept companies" since 1960. From 1965 through 1995 Dr. Kahn
served as a member of the Board of Directors of Nease Chemical Company
(currently German Chemical Company), Hollymatic Corporation and Pay Fone Systems
(currently Pay Chex, Inc.).
LEW F. BOYD has been a Director since August 1994. Mr. Boyd is the founder
and since 1985 has been the Chief Executive Officer of Coastal International,
Inc., an international business development and executive search firm,
specializing in the energy and environmental sectors. Previously, Mr. Boyd had
been Vice President/General Manager of the Renewable Energy Division of Butler
Manufacturing Corporation and had served in academic administration at Harvard
and Massachusetts Institute of Technology.
NICHOLAS DEBENEDICTIS has been a Director since September 2005. Mr.
DeBenedictis has been an independent investment advisor for the past nine years
and has over 16 years of experience in the financial markets and securities
business including positions with E.W. Smith Securities, Smith Barney, and
Janney Montgomery Scott.
Code of Ethics
On May 28, 2004, we adopted a code of ethics which applies to our
principal executive officer, principal financial officer, principal accounting
officer or controller, or persons performing similar functions. We have posted
our code of ethics on our corporate website, www.greenman.biz.
Board Meetings
Our Board of Directors met eight times, in person or by telephone during
the fiscal year ended September 30, 2006. None of the directors attended fewer
than 75% of the meetings held during the period. There were no actions taken by
unanimous consent in lieu of a meeting during the fiscal year ended September
30, 2006.
Committees of the Board of Directors
Our Board of Directors has established an Audit Committee and a
Compensation Committee.
Audit Committee: The Audit Committee of the Board of Directors acts to:
(i) acquire a complete understanding of our audit functions; (ii) review with
management and our independent accountants our finances, financial condition and
interim financial statements; (iii) review with the independent accountants our
year-end financial statements; and (iv) review implementation with the
independent accountants and management any action recommended by our independent
accountants. The Audit Committee met four times during the fiscal year ended
September 30, 2006. None of the members of the Audit Committee attended fewer
than 75% of the meetings held during the period.
The Audit Committee adopted a written charter governing its actions on
June 1, 2000. The three members of the Audit Committee are "independent" within
the definition of that term as provided by Section 121(A) of the listing
standards of the American Stock Exchange.
5
Report of the Audit Committee
The Audit Committee has reviewed and discussed our audited consolidated
balance sheets and statements of operations, cash flows and stockholders'
deficit for the fiscal years ended September 30, 2006 and 2005 with
management. The Audit Committee has discussed with Wolf & Company, P.C.,
our independent auditors, the matters required to be discussed by
Statement of Auditing Standards No. 61.
The Audit Committee has also received and reviewed written disclosures and
the letter from Wolf & Company, P.C. required by Independent Standards
Board No. 1 and has discussed with Wolf & Company, P.C. their
independence. Based on the foregoing review and discussions, the Audit
Committee recommended to the Board of Directors that the audited financial
statements be included in our Annual Report on Form 10-KSB for the fiscal
year ended September 30, 2006 for filing with the Securities and Exchange
Commission.
AUDIT COMMITTEE
Nicholas DeBenedictis (Chairman) Lew Boyd Dr. Allen Kahn
Compensation Committee: The Compensation Committee of the Board of
Directors sets the compensation of the Chief Executive Officer and reviews and
approves the compensation arrangements for all other officers. The Compensation
Committee met eight times during the fiscal year ended September 30, 2006. None
of the members of the Compensation Committee attended fewer than 75% of the
meetings held during the period.
Our Board of Directors has not established a nominating committee. Our
Board believes that each of our current members should, and do, participate in
the consideration of director nominees. The policy of our Board is to consider
director candidates recommended by our stockholders. Stockholders wishing to
nominate director candidates must comply with certain procedures and notice
requirements set forth in our By-Laws. Nominations must be submitted in writing
to our principal executive office on a timely basis and must contain certain
information set forth in our By-Laws. See "Advance Notice Procedures" below. Our
Board has not established a formal charter regarding the nomination and
consideration of director candidates. We expect to establish a Nominating and
Governance Committee, and a charter governing its operations, in fiscal 2007.
When adopted, the charter will be posted on our corporate website.
Stockholders may communicate directly with members of our Board of
Directors by sending a letter or other written communication to The Chairman of
the Board (or, if applicable to an individual director by name), in care of the
Corporate Secretary, GreenMan Technologies, Inc., 12498 Wyoming Avenue South,
Savage, MN 55378. Our current policy is to forward all communications to the
Chairman of the Board or the individually named director, if applicable, but we
reserve the right to modify that policy in the future.
6
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
The following table summarizes the compensation paid or accrued for
services rendered during the fiscal years ended September 30, 2006, 2005 and
2004, to our Chief Executive Officer, Former Chief Executive Officer and our
Chief Financial Officer. We did not grant any restricted stock awards or stock
appreciation rights or make any long-term plan payouts during the periods
indicated.
SUMMARY COMPENSATION TABLE
Long-Term
Compensation
Annual Compensation Securities
------------------- Other Annual Underlying All Other
Name and Principal Position Fiscal Year Salary Bonus Compensation (1) Options (2) Compensation (3)
--------------------------- ----------- ------ ----- ---------------- ----------- ----------------
Lyle Jensen ................ 2006 $ 81,250 $43,000 $ 6,683 500,000 $ --
Chief Executive Officer
Robert H. Davis ............ 2006 $134,167 $ -- $13,186 -- $102,252
Chief Executive Officer 2005 230,000 -- 23,802 -- --
(Resigned April 12, 2006) 2004 230,000 -- 21,468 -- --
Charles E. Coppa ........... 2006 $145,000 $48,000 $ 8,396 137,000 $ --
Chief Financial Officer 2005 130,000 -- 8,396 -- --
2004 130,000 -- 22,906 60,000 --
(1) Represents payments made to or on behalf of Messrs. Jensen, Davis and
Coppa for health, life and disability insurance and auto allowances.
(2) The fiscal 2006 grants represent options granted to Mr. Jensen in April
2006 and Mr. Coppa in June 2006. The fiscal 2004 grant represents options
granted to Mr. Coppa in August 2004 and were subsequently cancelled in
March 2005.
(3) The other compensation paid to Mr. Davis represents seven months of
severance payments made pursuant to an agreement underwhich Mr. Davis
receives twelve months salary and health insurance reimbursement
commencing May 2006 and ending April 2007.
Options/SAR Grants Table
The following table sets forth each grant of stock options made during the
year ended September 30, 2006 held by the executives named in the Summary
Compensation Table above.
OPTION GRANTS IN LAST FISCAL YEAR
% of Total Options Market Price
Number of Securities Granted Exercise On Date
Underlying to Employees in Price of Grant Expiration
Name Options Granted the Fiscal Year Per Share Per Share Date
---- --------------- --------------- --------- --------- ----
Lyle Jensen................. 500,000 53.8% $0.28 $0.28 4/12/16
Robert H. Davis............. -- -- -- -- --
Charles E. Coppa............ 137,000 14.8% $0.36 $0.36 6/5/16
Options granted have a ten year term and vest at an annual rate of 20%
over a five-year period from the date of grant.
7
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End
Option Values
The following table sets forth information concerning the value of unexercised
options as of September 30, 2006 held by the executives named in the Summary
Compensation Table above.
Shares Number of Securities Value of Unexercised
Acquired Value Underlying Unexercised In-the-Money Options
on Exercise (1) Realized Options at September 30, 2006 (2) at September 30, 2006
--------------- -------- --------------------------------- ---------------------
Name Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ------------- ----------- -------------
Lyle Jensen................. -- $ -- 28,000 505,500 $ -- $ --
Robert H. Davis ............ -- -- -- -- $ -- $ --
Charles E. Coppa ........... -- -- 366,000 138,500 $ -- $ --
(1) There were no options exercised during the fiscal year ended September 30,
2006.
(2) The options granted to the executive officers became exercisable
commencing February 20, 2003 in the case of Mr. Jensen and December 30,
1997 in the case of Mr. Coppa. In the case of Mr. Jensen, 6,000 options
granted under the 1996 Non-Employee Director plan vested immediately upon
grant and have a term of 10 years. All other options including those
granted to Mr. Coppa vest at an annual rate of 20% and have a 10 year
term.
Employment Agreements
On April 12, 2006, we entered into a five-year employment agreement with
Mr. Jensen pursuant to which Mr. Jensen will receive a base salary of $195,000
per year. The agreement automatically renews for one additional year upon each
anniversary, unless notice of non-renewal is given by either party. We may
terminate the agreement without cause on 30 days' prior notice. The agreement
provides for payment of twelve months' salary and certain benefits as a
severance payment for termination without cause. Any increases in Mr. Jensen's
base salary will be made at the discretion of the Board of Directors upon the
recommendation of the Compensation Committee. Mr. Jensen also received a
relocation allowance of $23,603 and receives a car allowance of $600 per month.
Mr. Jensen has been granted a qualified option under our 2005 Stock Option Plan
to purchase 500,000 shares of our common stock with an exercise price of $.28
per share. The options vest at an annual rate of 20% over a five year period
from date of grant and have a ten year term.
The agreement also provides for Mr. Jensen to be eligible to receive
incentive compensation based on (i) non-financial criteria which may be
established by the Board of Directors and (ii) upon a calculation of our annual
audited earnings before interest, taxes, depreciation and amortization
("EBITDA") as a percentage of our revenue, as follows:
EBITDA as
% of Revenue Performance Incentive
------------ ---------------------
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
In fiscal 2006, Mr. Jensen received an incentive bonus of $43,000 based on
our performance from his date of hire to the fiscal year-end. In addition, Mr.
Jensen will be eligible to be awarded qualified options to purchase up to
100,000 additional shares of common stock annually, with the actual amounts
contingent on achieving certain levels of EBITDA performance. The right to
exercise all options will accelerate in full immediately prior to any
transaction or series of sequenced events in which all or substantially all of
our assets or common stock are sold to or merged with a third party or third
parties. In addition, upon signing of his employment agreement, Mr. Jensen
purchased 500,000 unregistered shares of our common stock at $.28 which was the
closing bid price of our common stock on the date the agreement was executed.
In April 1999, we entered into a three-year employment agreement with Mr.
Davis pursuant to which Mr. Davis received a salary of $230,000 per annum. The
agreement automatically renewed for three additional years upon each
anniversary, unless notice of non-renewal is given by either party, and provided
for payment of twelve months salary as a severance payment for termination
without cause. The agreement also provided for Mr. Davis to receive incentive
compensation based on the following certain financial performance measures. No
bonus was payable for fiscal 2006, 2005 or 2004. On April 12, 2006, the Board of
Directors accepted Mr. Davis's resignation as President, Chief Executive Officer
and a member of the Board of Directors. Pursuant to the terms of his employment
agreement, Mr. Davis is to receive severance of 12 months salary plus benefits
starting May 1, 2006 (valued at $260,000) plus all accrued and unpaid vacation
(valued at $40,000).
8
In June 1999, we entered into a two-year employment agreement with Mr.
Coppa pursuant to which Mr. Coppa received a salary of $130,000 per annum. In
July 2006, the Compensation Committee agreed to increase Mr. Coppa's base salary
to $150,000. The agreement automatically renews for two additional years upon
each anniversary, unless notice of non-renewal is given by either party. Any
increases or bonuses will be made at the discretion of our Board of Directors
upon the recommendation of the Compensation Committee. During fiscal 2006, the
Compensation Committee agreed to grant him a one-time $48,000 bonus. Mr. Coppa
used $20,000 (net of taxes) of his bonus to purchase 50,000 shares of
unregistered common stock from the company. The agreement provides for payment
of twelve months salary as a severance payment for termination without cause.
In June 2003, we entered into a three-year employment agreement with Mr.
Needham pursuant to which Mr. Needham receives a salary of $90,000 per annum. In
July 2006, Mr. Needham agreed to a 30% reduction in his base salary in
recognition of on going efforts to reduce corporate overhead. The agreement
automatically renews for three additional years upon each anniversary, unless
notice of non-renewal is given by either party. Any increases or bonuses will be
made at the discretion of our Board of Directors upon the recommendation of the
Compensation Committee. The agreement provides for payment of twelve months
salary as a severance payment for termination without cause.
Stock Option Plans
Our 1993 Stock Option Plan (the "2003 Plan") was established to provide
options to purchase shares of common stock to our employees, officers, directors
and consultants. In March 2001, our stockholders approved an increase to the
number of shares authorized under the 1993 Plan to 3,000,000 shares. The 1993
Plan expired on June 10, 2004.
On March 18, 2005, our Board of Directors adopted the 2005 Stock Option
Plan (the "2005 Plan"), which was subsequently approved by our stockholders on
June 16, 2005. The 2005 Plan replaced the 1993 Plan. In April 2004, our Board
adopted a replacement stock option plan (the "2004 Plan") but did not submit it
for ratification by our stockholders. The 2004 Plan was terminated by our Board
on March 18, 2005, and all options granted under that plan have been terminated.
Options granted under the 2005 Plan may be either options intended to qualify as
"incentive stock options" under Section 422 of the Internal Revenue Code of
1986, as amended; or non-qualified stock options.
Incentive stock options may be granted under the 2005 Plan to employees,
including officers and directors who are employees. Non-qualified options may be
granted to our employees, directors and consultants. The 2005 Plan is
administered by our Board of Directors, which has the authority to determine:
o the persons to whom options will be granted;
o the number of shares to be covered by each option;
o whether the options granted are intended to be incentive stock
options;
o the manner of exercise; and
o the time, manner and form of payment upon exercise of an option.
Incentive stock options granted under the 2005 Plan may not be granted at
a price less than the fair market value of our common stock on the date of grant
(or less than 110% of fair market value in the case of persons holding 10% or
more of our voting stock). Non-qualified stock options may be granted at an
exercise price established by our Board which may not be less than 85% of fair
market value of our shares on the date of grant. Current tax laws adversely
impact recipients of non-qualified stock options granted at less than fair
market value, however, we do not expect to make such grants. Incentive stock
options granted under the 2005 Plan must expire no more than ten years from the
date of grant, and no more than five years from the date of grant in the case of
incentive stock options granted to an employee holding 10% or more of our voting
stock.
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As of September 30, 2006, there were 1,032,356 options granted and
outstanding under the 1993 Plan of which 1,022,356 options were exercisable at
prices ranging from $0.38 to $1.80. During the year ended September 30, 2006,
929,000 options were granted under the 2005 Plan at prices ranging from $.28 to
$.36. No options were granted under the 2005 Plan during the fiscal year ended
September 30, 2005.
Non-Employee Director Stock Option Plan
Our 1996 Non-Employee Director Stock Option Plan is intended to promote
our interests by providing an inducement to obtain and retain the services of
qualified persons who are not officers or employees to serve as members of our
Board of Directors. The Board of Directors has reserved 60,000 shares of common
stock for issuance under Non-Employee Director Stock Option Plan.
Each person who was a member of the Board of Directors on January 24,
1996, and who was not an officer or employee, was automatically granted an
option to purchase 2,000 shares of common stock. In addition, after an
individual's initial election to the Board of Directors, any director who is not
an officer or employee and who continues to serve as a director will
automatically be granted on the date of the Annual Meeting of Stockholders an
additional option to purchase 2,000 shares of common stock. The exercise price
per share of options granted under the Non-Employee Director Stock Option Plan
is 100% of the fair-market value of the common stock on the business day
immediately prior to the date of the grant and each option is immediately
exercisable for a period of ten years from the date of the grant. During fiscal
2006, the Compensation Committee agreed to discontinue future option grants made
under the Non-Employee Director Stock Option Plan.
As of September 30, 2006, options to purchase 38,000 shares of our common
stock have been granted under the 1996 Non-Employee Director Stock Option Plan,
of which 28,000 are outstanding and exercisable at prices ranging from $0.38 to
$1.95.
Employee Benefit Plan
In August 1999, we implemented a Section 401(k) plan for all eligible
employees. Employees are permitted to make elective deferrals of up to 15% of
employee compensation and employee contributions to the 401(k) plan are fully
vested at all times. We may make discretionary contributions to the 401(k) plan
which become vested over a period of five years. We did not make any
discretionary contributions to the 401(k) plan during the fiscal years ended
September 30, 2006 and 2005.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires our directors and executive
officers, and persons who own more than 10% of our common stock, to file with
the Securities and Exchange Commission initial reports of ownership of our
common stock and other equity securities on Form 3 and reports of changes in
such ownership on Form 4 and Form 5. Officers, directors and 10% stockholders
are required by the Securities and Exchange Commission regulations to furnish us
with copies of all Section 16(a) forms they file.
To the best of management's knowledge, based solely on review of the
copies of such reports furnished to us during and with respect to, our most
recent fiscal year, and written representation that no other reports were
required, all Section 16(a) filing requirements applicable to our officers and
directors have been complied with.
PROPOSAL NO. 2
RATIFICATION OF SELECTION OF AUDITORS
Effective February 12, 2007, our Board of Directors has selected the firm
of Schechter, Dokken, Kanter, Andrews & Selcer, Ltd independent certified public
accountants, to serve as auditors for the fiscal year ending September 30, 2007.
Schechter, Dokken, Kanter, Andrews & Selcer, Ltd. based in Minneapolis,
Minnesota has assisted our former auditor, Wolf & Company, P.C. in our annual
audit during the past eight years. Given the relocation of corporate
headquarters from Massachusetts to Minnesota during fiscal 2006, our Board
deemed it appropriate to select a local firm to serve as our auditor commencing
fiscal 2007.
The report of Wolf & Company, P.C. on our financial statements for the
fiscal year ended September 30, 2005 (but not the fiscal year ended September
30, 2006) indicated a substantial doubt about our ability to continue as a going
concern. Except for this "going concern" qualification, Wolf & Company, P.C.'s
reports with respect to our last two fiscal years did not contain any adverse
opinion or a disclaimer of opinion and were not qualified or modified as to
uncertainty, audit scope or accounting principles. During the two most recent
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fiscal years and the subsequent interim period we had no disagreements with Wolf
& Company, P.C. on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure which, if not resolved to
the satisfaction of Wolf & Company, P.C. would have caused Wolf & Company, P.C.
to make reference to the matter in its report.
As indicated, Schechter, Dokken, Kanter, Andrews & Selcer, Ltd. has
assisted Wolf & Company, P.C. in our annual audits during the past eight years.
During the two most recent fiscal years, and any subsequent interim period prior
to engaging Schechter, Dokken, Kanter, Andrews & Selcer, Ltd., however, neither
we (nor anyone on our behalf) consulted Schechter, Dokken, Kanter, Andrews &
Selcer, Ltd. regarding (i) either the application of accounting principles to a
specified transaction, either completed or proposed, or the type of audit
opinion that might be rendered on our financial statements; or (ii) any matter
that was either the subject of a disagreement or a reportable event.
We have furnished the disclosure set forth above to Wolf & Company, P.C..
Wolf & Company, P.C. has indicated that it believes such disclosure to be
correct and complete.
Stockholder ratification of our independent auditors is not required under
Delaware law or under our Restated Certificate of Incorporation or By-Laws. A
representative of Schechter, Dokken, Kanter, Andrews & Selcer, Ltd. is expected
to be present at the Meeting, with the opportunity to make a statement if the
representative desires to do so, and is expected to be available to respond to
appropriate questions. It is not currently expected that any representative Wolf
& Company, P.C. will be present at the Meeting. If the stockholders do not
ratify the selection of Schechter, Dokken, Kanter, Andrews & Selcer, Ltd. as our
independent auditors for the fiscal year ending September 30, 2007, our Board of
Directors will evaluate what would be in the best interests of our company and
our stockholders and consider whether to select new independent auditors for the
current fiscal year or whether to wait until the completion of the audit for the
current fiscal year before changing independent auditors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF ITS SELECTION
OF SCHECHTER, DOKKEN, KANTER, ANDREWS & SELCER, LTD. AS INDEPENDENT AUDITORS FOR
THE FISCAL YEAR ENDING SEPTEMBER 30, 2007.
INDEPENDENT PUBLIC ACCOUNTANTS
Audit Fees. The aggregate fees billed for professional services rendered
by Wolf & Company, P.C. for (1) the audit of our financial statements as of and
for the fiscal year ended September 30, 2006 and (2) the review of the financial
statements included our company's Form 10-QSB filings for fiscal 2006 were
$204,820. The aggregate fees billed for professional services rendered by Wolf &
Company, P.C. for (1) the audit of our financial statements as of and for the
fiscal year ended September 30, 2005 and (2) the review of the financial
statements included in our Form 10-QSB filings for fiscal 2005 were $220,000.
Audit-Related Fees. The aggregate fees billed in fiscal 2006 and 2005 for
assurance and related services rendered by Wolf & Company, P.C. that are
reasonably related to the performance of the audit or review of our financial
statements, were $4,300 and $6,600, respectively. Services rendered in this
category consisted of (i) financial accounting and reporting consultations, and
(ii) participation in board and audit committee meetings and (iii) assurance
services on specific transactions.
Tax Fees. The aggregate fees billed in fiscal 2006 and 2005 for
professional services rendered by Wolf & Company, P.C. for tax compliance, tax
advice and tax planning were $26,975 and $27,750, respectively.
All Other Fees. There were no fees billed in fiscal 2006 and 2005 for
products and services provided by Wolf & Company, P.C., other than services
reported above.
Pre-Approval Policies and Procedures. The Audit Committee has adopted
policies which provide that our independent auditors may only provide those
audit and non-audit services that have been pre-approved by the Audit Committee,
subject, with respect to non-audit services, to a de minimis exception
(discussed below) and to the following additional requirements: (1) such
services must not be prohibited under applicable federal securities rules and
regulations, and (2) the Audit Committee must make a determination that such
services would be consistent with the principles that the independent auditor
should not audit its own work, function as part of management, act as an
advocate of our company, or be a promoter of our company's stock or other
financial interests. The chairman of the Audit Committee has the authority to
grant pre-approvals of permitted non-audit services between meetings, provided
that any such pre-approval must be presented to the full Audit Committee at its
next scheduled meeting.
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During fiscal 2006, all of the non-audit services provided by Wolf &
Company, P.C. were pre-approved by the Audit Committee. Accordingly, the Audit
Committee did not rely on the de minimis exception noted above. This exception
waives the pre-approval requirements for non-audit services if certain
conditions are satisfied, including, among others, that such services are
promptly brought to the attention of and approved by the Audit Committee prior
to the completion of the audit.
TRANSACTION OF OTHER BUSINESS
Our Board of Directors knows of no other matters which may be brought
before the Meeting. If any other matters properly come before the Meeting, or
any adjournment thereof, it is the intention of the persons named in the
accompanying form of proxy to vote the proxy on such matters in accordance with
their best judgment.
ADVANCE NOTICE PROCEDURES
Under our By-laws, nominations for a director may be made only by the
Board of Directors, a committee appointed by the Board of Directors, or by a
stockholder of record entitled to vote on the election of directors, who is also
a stockholder at the record date of the meeting and also on the date of the
meeting at which directors are to be elected, who has delivered notice to our
principal executive offices (containing certain information specified in the
By-laws) (i) not fewer than 60 days nor more than 90 days prior to the
anniversary date of the preceding year's annual meeting, or (ii) if the meeting
is called for a date not within thirty days before or after such anniversary
date, not later than the close of business on the 10th day following the date
notice of such meeting is mailed or made public, whichever is earlier.
Our By-laws also provide that no business may be brought before an annual
meeting of stockholders except as specified in the notice of the meeting or as
otherwise brought before the meeting by or at the direction of the Board of
Directors, the presiding officer or by a stockholder who shall have been a
stockholder of record on the record date for such meeting and who shall continue
to be entitled to vote thereafter, who has delivered notice to our principal
executive offices (containing certain information specified in the By-laws) (i)
not fewer than 60 days nor more than 90 days prior to the anniversary date of
the preceding year's annual meeting, or (ii) for a special meeting or an annual
meeting called for a date not within thirty days before or after such
anniversary date, not later than the close of business on the 10th day following
the date notice of such meeting is mailed or made public, whichever is earlier.
These requirements are separate and apart from and in addition to the
requirements that a stockholder must meet in order to have a stockholder
proposal included in our Proxy Statement under Rule 14a-8 of the Exchange Act. A
copy of the full text of the By-law provisions discussed above may be obtained
by writing to the Corporate Secretary, GreenMan Technologies, Inc., 12489
Wyoming Avenue South, Savage, Minnesota, 55378.
STOCKHOLDER PROPOSALS
Proposals of stockholders intended for inclusion in the proxy statement to
be mailed to all stockholders entitled to vote at our next annual meeting of
stockholders must be received at our principal executive offices not later than
October 12, 2007. In order to curtail controversy as to the date on which a
proposal was received by us, it is suggested that proponents submit their
proposals by Certified Mail Return Receipt Requested.
EXPENSES AND SOLICITATION
The cost of solicitation by proxies will be borne by us, in addition to
directly soliciting stockholders by mail, we may request banks and brokers to
solicit their customers who have our stock registered in the name of the nominee
and, if so, will reimburse such banks and brokers for their reasonable
out-of-pocket costs. Solicitation by our officers and employees may be made of
some stockholders in person or by mail or telephone.
INFORMATION INCORPORATED BY REFERENCE
Our Annual Report, containing financial statements and management's
discussion and analysis of our financial condition and results of operations for
the year ended September 30, 2006 is being mailed contemporaneously with this
proxy statement to all stockholders entitled to vote, and is incorporated herein
by this reference.
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