SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 8)*
THE NEW WORLD POWER CORPORATION
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(Name of issuer)
COMMON STOCK, PAR VALUE $.01 PER SHARE
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(Title of class of securities)
649290-20-2
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(CUSIP number)
JOHN D. KUHNS
THE NEW WORLD POWER CORPORATION
558 Lime Rock Road
Lime Rock, Connecticut 06039
(860) 435-4000
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(Name, address and telephone number of person
authorized to receive notices and communications)
November 26, 1996 **
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(Date of event which requires filing of this statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box
/ /.
Check the following box if a fee is being paid with the statement / /.
(A fee is not required only if the reporting person: (1) has a previous
statement on file reporting beneficial ownership of more than five percent of
the class of securities described in Item 1; and (2) has filed no amendment
subsequent thereto reporting beneficial ownership of five percent or less of
such class.) (See Rule 13d-7).
NOTE. Six copies of this statement, including all exhibits, should be
filed with the Commission. SEE Rule 13d-1(a) for other parties to whom copies
are to be sent.
(Continued on following pages)
(Page 1 of 44 Pages)
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* The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class
of securities, and for any subsequent amendment containing information
which would alter disclosures provided in a prior cover page.
** This filing is a voluntary disclosure.
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CUSIP No. 649290-20-2 13D Page 2 of 43 Pages
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================================================================================
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
JOHN D. KUHNS
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*(a)/ /
(b)/ /
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
NOT APPLICABLE
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) /X/
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6 CITIZENSHIP OR PLACE OR ORGANIZATION
UNITED STATES OF AMERICA
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NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 825,666
OWNED BY ---------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON WITH -0-
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9 SOLE DISPOSITIVE POWER
678,821
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10 SHARED DISPOSITIVE POWER
-0-
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
825,666
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.4%
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14 TYPE OF REPORTING PERSON*
IN
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
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CUSIP No. 649290-20-2 13D Page 3 of 43 Pages
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This Amendment No. 8 to Schedule 13D (the "Amendment") amends the
Schedule 13D filed with respect to an event on January 26, 1990; as previously
amended by Amendment No. 1 ("Amendment No. 1") filed with respect to an event on
September 1, 1990; Amendment No. 2 ("Amendment No. 2") filed with respect to an
event on February 15, 1992; Amendment No. 3 ("Amendment No. 3") filed with
respect to an event on July 7, 1992; Amendment No. 4 ("Amendment No. 4") filed
with respect to an event on September 10, 1992; and Amendment No. 5 ("Amendment
No. 5") filed with respect to an event on May 28, 1993; Amendment No. 6
("Amendment No. 6") filed with respect to an event on November 15, 1995; and
Amendment No. 7 ("Amendment No. 7") filed with respect to an event on March 13,
1996 (collectively, the "Statement"). Pursuant to Rule 101 of Regulation S-T,
this Amendment No. 8 amends and restates the Statement to read in its entirety
as follows:
Item 1. Security And Issuer.
--------------------
This statement relates to the shares ("Shares") of common
stock, $.01 par value ("Common Stock"), of The New World Power Corporation
("Issuer"). The principal executive offices of the Issuer are located at 558
Lime Rock Road, Lime Rock, Connecticut 06039. Such shares do not take into
account the Issuer's one-for-five reverse stock split which went into effect on
November 4, 1996.
Item 2. Identity And Background.
------------------------
(a) Name: John D. Kuhns (the "Reporting Person").
(b) The principal business address of the Reporting Person is 558 Lime
Rock Road, Lime Rock, Connecticut 06039.
(c) The present principal occupation of the Reporting Person is the
President of Dominion, Kuhns Brothers & Company, Inc.; the principal
business of which is investment advisory services.
(d) The Reporting Person has not, during the last five years, been
convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors).
(e) The Reporting Person has not, during the last five years, been
party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding was or is
subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to,
federal or state securities laws or finding any violation with respect
to such laws, except that on June 6, 1995, the SEC issued an order
against him to cease and desist from omitting or causing any violation
of Section 13(d) or 16(a) of the Exchange Act, and Rules 13d-1, 13d-2,
16a-2 and 16a-3 thereunder. Mr. Kuhns consented to the entry of the
order without admitting or denying the allegations therein.
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CUSIP No. 649290-20-2 13D Page 4 of 43 Pages
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(f) The Reporting Person is a citizen of the United States of
America.
Item 3. Source And Amount Of Funds Or Other Consideration.
--------------------------------------------------
(a) The 12,520,530 shares of Common Stock initially acquired were
acquired at a price of $.239 per share. The funds for this
purchase were acquired from the Reporting Person's personal
funds.
Item 4. Purpose Of Transaction.
-----------------------
Mr. Kuhns holds his shares in the Issuer for investment. Other
than as indicated herein, he has no present plans or proposals which relate to
or would result in any of the following (although he reserves the right to
develop such plans or proposals): (i) the acquisition of additional securities
of the Issuer, or the disposition of securities of the Issuer: (ii) an
extraordinary corporate transaction, such as a merger, reorganization or
liquidation, involving the Issuer or any of its subsidiaries; (iii) a sale or
transfer of a material amount of assets of the Issuer or any of its
subsidiaries; (iv) any change in the present board of directors or management of
the Issuer, including any plans or proposals to change the number or term of
directors or to fill any existing vacancies on the Issuer's board of directors;
(v) any material change in the present capitalization or dividend policy of the
Issuer; (vi) any other material change in the business or corporate structure of
the Issuer; (vii) any change in the Issuer's certificate of incorporation or
by-laws or other actions which may impede the acquisition of control of the
Issuer by any person; (viii) causing a class of securities of the Issuer to be
delisted from a national securities exchange or to cease to be authorized to be
quoted in an inter-dealer quotation system of a registered national securities
association; (ix) a class of equity securities of the Issuer becoming eligible
for termination of registration pursuant to Section 12(g)(4) of the Exchange
Act; or (x) any action similar to any of those enumerated above.
Item 5. Interest In Securities Of The Issuer.
-------------------------------------
Mr. Kuhns is the beneficial owner of 825,666 shares of the
Issuer's Common Stock (representing 7.4% of the issued and outstanding Common
Stock), including 146,845 shares owned by third parties for which he holds
voting power pursuant to irrevocable proxies and certain rights of first
refusal, purchase options and come-along-rights. Of these 825,666 shares, Mr.
Kuhns has the sole voting and dispositive power over 678,821 shares and sole
voting power, but no dispositive power, over an additional 146,845 shares.
During the last 60 days Mr. Kuhns has not acquired or disposed
of any shares, except as described in Item 6 below, and as
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CUSIP No. 649290-20-2 13D Page 5 of 43 Pages
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follows: (i) on each of September 22 and October 22, 1996, Mr. Kuhns option to
acquire 18,519 shares of the Issuer under the 1993 Stock Incentive Plan became
exercisable; (ii) on October 31, 1996, Mr. Kuhns options expired under the terms
of the Issuer's 1989 and 1993 Stock Incentive Plans; and (iii) on October 31,
1996, the Issuer became obligated to deliver to Mr. Kuhns 130,000 shares of its
Common Stock, pursuant to an amendment to his employment agreement, which is
discussed below.
Item 6. Contracts, Arrangements, Understandings or Relationships
With Respect To Securities Of The Issuer.
-----------------------------------------
On or about March 13, 1996, the Security and Escrow Agreement
described in Amendment No. 6 terminated, as a result of the accompanying note
being paid in full. At the same time, Mr. Kuhns deposited 200,000 shares of
Common Stock of the Issuer, previously held by the Escrow Agent under the former
Security and Escrow Agreement with Olshan Grundman Frome & Rosenzweig LLP
("OGFR"), 505 Park Avenue, New York, New York 10022; OGF&R received these shares
as escrow agent pursuant to a new promissory note and a Security and Escrow
Agreement between Mr. Kuhns and a third-party. A copy of the new Security and
Escrow Agreement is annexed as Exhibit C to this Statement. Mr. Kuhns retains
exclusive power to vote the shares deposited with OGFR and the power to direct
their disposition at any time prior to an "Event of Default", which includes any
failure to pay sums due under the note that continues for ten days after notice
thereof to Mr. Kuhns. Under the accompanying Note, Mr. Kuhns must pay $300,000
in principal, payable $150,000 by December 31, 1996 and the balance by December
31, 1997, except that the holder, Mr. Hermann, may demand that up to $50,000 in
principal be paid earlier over an consecutive three month period. Interest
payments are due monthly. In addition, Mr. Kuhns assigned to Mr. Hermann,
effective January 12, 1996, any ownership interest that Mr. Kuhns may ultimately
have in 20,000 shares of Common Stock of the Issuer pursuant to the Issuer's
1989 Stock Incentive Plan Award Agreement.
As of March 1, 1996, Mr. Kuhns entered into an amendment to
his employment agreement with the Issuer, a copy of which is annexed as exhibit
D to this Statement. Under this amendment, monthly distributions of the Issuer's
common stock were to be set aside for Mr. Kuhns. The full text of the amendment
is incorporated herein by reference.
On October 31, 1996, Mr. Kuhns was not re-elected to the Board
of the Issuer and his options expired pursuant to the terms of the Issuer's
option plans. The Issuer has agreed to deliver to Mr. Kuhns all shares due under
Amendment No. 2. Mr. Kuhns is therefore entitled to receive 130,000 shares
within sixty days.
Except as described herein, there is no contract between Mr.
Kuhns and any other person with respect to any securities of
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CUSIP No. 649290-20-2 13D Page 6 of 43 Pages
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the Issuer, including, but not limited to, transfer or voting of any securities,
finder's fees, joint ventures, loan or option arrangements, puts or calls,
guarantees of profits, division of profits or losses, or the giving or holding
of proxies.
Item 7. Exhibits.
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1. Security and Escrow Agreement, dated as of January
12, 1996 between John D. Kuhns, Henry Hermann and
Olshan Grundman Frome & Rosenzweig LLP.
2. Employment Agreement between John D. Kuhns and the
Issuer, dated as of August 1, 1995.
3. Amendment No. 1 to Employment Agreement between
John D. Kuhns and the Issuer, dated as of March 1,
1996.
4. Amendment No. 2 to Employment Agreement between
John D. Kuhns and the Issuer, dated as of March 31,
1996
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CUSIP No. 649290-20-2 13D Page 7 of 43 Pages
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SIGNATURE
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After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
Dated: November 26, 1996
By: /s/ John D. Kuhns
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John D. Kuhns
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CUSIP No. 649290-20-2 13D Page 8 of 43 Pages
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EXHIBIT 1
SECURITY AND ESCROW AGREEMENT
-----------------------------
Escrow Agreement between (i) JOHN D. KUHNS, residing at 15
White Hollow Road, Lakeville, Connecticut 06039 ("Borrower"); (ii) HENRY
HERMANN, residing at 6425 Brookshire Drive, Dallas, Texas 75230 (the "Lender");
and (iii) Olshan Grundman Frome & Rosenzweig LLP, a partnership with offices at
505 Park Avenue, New York, New York 10022 ("Escrow Agent").
WHEREAS, Borrower has delivered to Lender a Promissory Note in
the principal amount of $300,000 (the "Note"); and
WHEREAS, Lender wishes to receive collateral security for the
Note in the form of shares of The New World Power Corporation with a value of
$600,000, but Borrower has available only 175,000 shares and Borrower will use
its best efforts to increase the number of shares in escrow (the "NWPC Shares"),
or other collateral owned by Borrower, when possible; and
WHEREAS, the Borrower has delivered to the Escrow Agent the
NWPC Shares to the Escrow Agent so that the NWPC Shares to be held by Escrow
Agent as collateral security for the Lender until the Note is paid in full;
It is hereby agreed, by the parties hereto as follows:
1. The NWPC Shares delivered to Escrow Agent under this
Agreement, and all dividends earned thereon or proceeds thereof, including
interest on any proceeds or dividends (the "Escrowed
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CUSIP No. 649290-20-2 13D Page 9 of 43 Pages
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Amount"), shall be held by Escrow Agent in escrow and disposed of only as
follows:
(a) Except upon an Event of Default under the
Note, Borrower or his designee shall be the sole person authorized to direct the
sale of any NWPC Shares in the Escrow Account or to vote, by proxy or otherwise,
any securities held in the Escrow Account.
(b) Upon an Event of Default under the Note,
Escrow Agent shall be required to promptly liquidate any collateral in the
Escrow Account, but only in any amount sufficient to make the payment then due
under the Note, net of brokerage fees and commissions.
(c) The Escrowed Amount shall not be used to
purchase any other securities, except with the written approval of Borrower and
Lender.
(d) Upon payment in full of the principal and
interest due under the Note of the Escrowed Amount, or any remaining portion
thereof, shall be promptly returned to Borrower.
(e) All communications to, or from, any
financial institution that may receive the Escrowed Amount shall be sent
simultaneously to Escrow Agent, Lender and Borrower. The parties shall cooperate
in preparing any written directions to any financial institution to effectuate
this agreement.
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CUSIP No. 649290-20-2 13D Page 10 of 43 Pages
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2. Lender shall have a continuing security interest in the
NWPC shares, monies and other property and all proceeds if any of the foregoing,
now or hereinafter held in the Escrowed Amount as Collateral Security for the
payment of the Note. Borrower agrees to execute all documents necessary to
protect, perfect or further Lender's security interest.
3. In the event the closing price on any day for New World's
shares when multiplied by the NWPC Shares is less than $300,000, Borrower shall
be required to deposit, within 5 business days, additional New World Shares or
other collateral deemed acceptable by the Lender with Escrow Agent, upon written
request therefore, so that the closing price of New World multiplied by the NWPC
Shares plus the mutually agreed upon value of any additional collateral shall be
no less than $300,000.
a. When the Borrower has succeeded in increasing the
collateral for this loan in escrow, the minimum value of the escrow required to
be maintained will be increased by an amount to be agreed upon by the Lender and
the Borrower. (The Lender wishes the minimum value to be at least $450,000.00).
If the value of the Collateral is less than the negotiated amount (which will be
more than $300,000), Borrower shall then be required to deposit within 5
business days additional collateral with the Escrow Agent to maintain a total
value in escrow at the amount to be negotiated by the Lender and the Borrower.
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CUSIP No. 649290-20-2 13D Page 11 of 43 Pages
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4. If Escrow Agent shall have received a written notice signed
by either party advising Escrow Agent that a dispute has arisen over
distribution to the Escrowed Amount, Escrow Agent will not be obligated to make
any delivery of the Escrowed Amount (or any portion thereof) until receipt by
Escrow Agent of an authorization in writing signed by all the persons believed
by Escrow Agent to have an interest in such dispute, directing the disposition
of the Escrowed Amount (or any portion thereof), or, in the absence of such
authorization, Escrow Agent may hold the Escrowed Amount (or any portion
thereof) until the final determination of the right of the parties in an
appropriate proceeding. If such written authorization is not given, or
proceedings for such determination are not begun and diligently continued,
Escrow Agent is not required to bring an appropriate action or proceeding for
leave to place the Escrowed Documents (or any portion thereof) in court, pending
such determination, but may at the Escrow Agent's sole discretion, on notice to
the parties, deposit the Escrowed Amount (not theretofore released by Escrow
Agent pursuant to the provisions hereof) with the Clerk of the Supreme Court of
the State of New York in New York County, New York, and upon making such
deposit, Escrow Agent shall be relieved and discharged of all further
obligations and liability hereunder.
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CUSIP No. 649290-20-2 13D Page 12 of 43 Pages
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5. Escrow Agent is acting as a stakeholder only, its duties
being purely ministerial, at the request of the parties and for their
convenience. Escrow Agent shall not be deemed to be the agent or trustee for
either of the parties and shall not be liable to either of the parties for any
act or omission unless it involves willful misconduct or gross negligence on the
part of Escrow Agent. Without limiting the generality of the foregoing, Escrow
Agent shall not be responsible or liable in any manner whatsoever for (1) the
sufficiency, correctness, genuineness, or validity of any check or other
instrument delivered to it, (2) the form of execution of any such instruments,
(3) the identity, authority, or rights of any person executing or delivering any
such instrument, (4) the terms and conditions of any instrument pursuant to
which the parties may act, (5) any loss of interest or dividends resulting from
a delay in investing or reinvesting the Escrowed Amount, (6) any loss resulting
from, in connection with, or arising from the deposit or investment of the
Escrowed Amount, as provided herein, including, but not limited to, the failure,
refusal or inability of any institution(s) with which the Escrowed Amount has
been deposited or invested to repay any portion of the principal amount of or
any interest or dividend accrued on the Escrowed Amount. The parties shall and
hereby do jointly and severally indemnify and hold harmless Escrow Agent from
and against all claims and costs, including, but not limited to, reasonable
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CUSIP No. 649290-20-2 13D Page 13 of 43 Pages
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attorneys' fees (either paid to retain attorneys or amounts representing the
fair value of legal services rendered to or for itself), incurred in connection
with the performance of Escrow Agent's duties hereunder, except with respect to
acts or omissions involving willful misconduct or gross negligence on the part
of Escrow Agent.
6. Notwithstanding anything to the contrary contained herein,
Lender agrees that Olshan Grundman Frome & Rosenzweig LLP, or any firm with
which he is affiliated, may represent Borrower in any action, suit or other
proceeding between the parties, or in which the parties may be involved,
including any action relating to the NWPC shares, the Escrowed Amount of this
Agreement.
7. No change or termination of this Agreement affecting the
rights, duties, or liability of Escrow Agent shall be binding upon Escrow Agent
unless agreed to in writing by Escrow Agent.
8. Notices, demands and requests to Escrow Agent shall be
given by hand and by certified mail, addressed to Escrow Agent at its address
above. Notices from Escrow Agent to the parties shall be sent to the addresses
in the Note.
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CUSIP No. 649290-20-2 13D Page 14 of 43 Pages
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9. The parties federal employee identification or social
security numbers are:
Borrower ###-##-####
Lender ###-##-####
10. Escrow Agent has signed below for the sole purpose of
agreeing to act as such in accordance with the terms and conditions of this
Escrow Agreement.
11. The parties hereby acknowledge and agree that the fact
that Escrow Agent's representation of Borrower does not constitute a conflict of
interest and hereby consent to Escrow Agent acting in such dual capacity.
12. Escrow Agent acknowledges receipt of the NWPC Shares in
the amount of 175,000 shares.
13. In the event of the death, disability or resignation of
Escrow Agent, Borrower shall designate, upon notice to all other parties, a
successor Escrow Agent, who shall be a duly licensed attorney with his or her
principal office in New York County.
Dated: As of January 12, 1996
ESCROW AGENT:
/s/OLSHAN GRUNDMAN FROME & ROSENZWEIG LLP
-----------------------------------------
OLSHAN GRUNDMAN FROME & ROSENZWEIG LLP
/s/ John D. Kuhns
-----------------------------------------
John D. Kuhns
/s/ Henry Hermann
-----------------------------------------
Henry Hermann
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CUSIP No. 649290-20-2 13D Page 15 of 43 Pages
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EXHIBIT 2
---------
EMPLOYMENT AGREEMENT
--------------------
THIS EMPLOYMENT AGREEMENT is entered into as of August 1, 1995, by and
between THE NEW WORLD POWER CORPORATION, a Delaware corporation with its
principal place of business at The Farmhouse, 558 Lime Rock Road, Lime Rock,
Connecticut 06039 (the "Company"), and JOHN D. KUHNS, an individual whose
principal residence is at 15 White Hollow Road, Lime Rock, Connecticut 06039
(the "Executive").
Background
----------
The Executive is presently employed by the Company as the Chairman of
the Board and Chief Executive Officer and is providing certain consulting
services to two subsidiaries of the Company under certain Management Agreements
with East Rock Partners, Inc., a company affiliated with the Executive. These
agreements have been terminated at the effective date of this Agreement.
The Board of Directors of the Company recognizes that the Executive's
contribution to the growth and success of the Company has been and is expected
to be substantial. The Board desires to provide for the continued employment of
the Executive and to make certain changes in his employment arrangements which
the Board has determined will reinforce and encourage his continued attention
and dedication to the Company. The Executive is willing to commit himself to
continue to serve the Company on the terms and conditions provided herein.
Accordingly, in consideration of the premises and the respective
covenants and agreements set forth herein, and intending to be legally bound
hereby, the parties hereby agree as follows:
1. EMPLOYMENT PERIOD. The Company shall employ the Executive for an
initial period of five (5) years beginning on the date hereof and continuing
through July 31, 2000, and for successive one-year renewal periods. Each renewal
shall be automatic unless either the Company or the Executive gives at least
ninety (90) days written notice of nonrenewal. The initial term and any renewal
periods are referred to herein as the "Employment Period."
2. EMPLOYMENT DUTIES. (a) The Company will continue to employ the
Executive as the Chairman of the Board and Chief Executive Officer. The
Executive agrees to continue in such employment for the duration of the
Employment Period and to perform
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CUSIP No. 649290-20-2 13D Page 16 of 43 Pages
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in good faith and to the best of his abilities all services which may be
required of him in such offices and to be available to render such services in
accordance with the Company's Bylaws, as they may be amended from time to time,
and all reasonable directives and assignments issued by the Company's Board of
Directors.
(b) During the Employment Period, the Executive will devote
his full time and efforts during normal business hours to the business and
affairs of the Company within the customary scope of his offices; provided,
however, that the foregoing shall not prevent the Executive from (i) purchasing
any securities or otherwise passively investing his personal or family assets in
any other company or business, or (ii) engaging in any governmental, political,
educational or charitable activities, but only to the extent that those
activities are not inconsistent with any direction of the Board or any duties
under this Agreement and do not interfere with his devoting his full time and
efforts to the business and affairs of the Company.
(c) The Executive shall be based at the principal executive
offices of the Company in Lime Rock, Connecticut, except for required travel on
Company business.
3. COMPENSATION. (a) For service in 1995, the Executive base salary
will be at the annual rate of Four Hundred Eighty Thousand Dollars ($480,000);
provided, however, that, upon adoption of a resolution of a majority of the
entire Board of Directors, the Company may reduce the Executive's base salary by
not more than twenty-five percent (25%) in connection with and to the extent of
any across-the-board salary reduction for all employees of the Company and its
wholly-owned subsidiaries. The Board or an appropriate committee of the Board
will review his salary at least annually beginning in the fourth fiscal quarter
of 1995. The Board or such committee may, in its discretion, increase the base
salary of the Executive from time to time but may not reduce the base salary
below the rate set forth above. If so increased, the base salary shall not
thereafter be decreased during the Employment Period.
(b) The Executive's base salary will be paid at periodic
intervals in accordance with the Company's payroll practices for executive
employees.
(c) During the Period of Employment the Executive shall be
entitled to participate in, and to receive bonus payments in accordance with,
the terms of the Company's annual bonus plan.
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CUSIP No. 649290-20-2 13D Page 17 of 43 Pages
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Annual bonus payments under such plan shall be payable not later than thirty
(30) days after completion of the Company's audited financial statements for its
preceding fiscal year, in an amount determined by the Board or an appropriate
committee of the Board based upon the performance goals established by the Board
or such committee for the prior fiscal year.
(d) The Company will deduct and withhold, from any payments to
the Executive hereunder, any and all federal, state and local income and
employment withholding taxes and any other amounts required to be deducted or
withheld by the Company under applicable law.
(e) The Executive will act, without any additional
compensation, as an officer or director of any subsidiary or affiliate of the
Company if so elected or appointed.
4. EXPENSE REIMBURSEMENT. The Company shall reimburse the Executive for
all customary, ordinary and necessary business expenses incurred by him in the
performance of his duties hereunder in accordance with Company policies and
procedures.
5. FRINGE BENEFITS. During the Employment Period, the Executive will be
eligible to participate in any retirement plan, annual and long-term incentive
compensation plan, stock option and purchase plan, group life insurance plan,
group medical and dental insurance plan, accidental death and dismemberment
plan, short-term disability program and other employee benefit plans which are
made available to other executive officers and for which he qualifies.
6. VACATION. The Executive will accrue paid vacation benefits during
the Employment Period in accordance with the Company policy in effect for other
executive officers.
7. DEATH. If the Executive dies during the Employment Period, the
employment relationship created by this Agreement will terminate, and the
Executive's salary shall continue to be paid to his designated beneficiary or,
if none, to his personal representative through the end of the month in which
his death occurred. In addition, the Executive, or his designated beneficiary or
personal representative, will be entitled to such death benefits as may be
payable under Section 5.
8. DISABILITY. If the Executive becomes disabled during the Employment
Period, the employment relationship created by this Agreement may be terminated
by the Company pursuant to Section 11(a)(ii). The disability of the Executive
shall not constitute a
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CUSIP No. 649290-20-2 13D Page 18 of 43 Pages
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breach of this Agreement by the Executive. The Executive will be deemed to be
disabled if he is, in the Company's reasonable opinion, unable by reason of any
physical or mental injury or illness to substantially perform the services
required of him hereunder either for a period in excess of one hundred eighty
(180) consecutive days or for a period of one hundred eighty (180) days in the
aggregate during any three-hundred sixty (360) day period. In such event, the
Executive will be deemed to be disabled as of the completion of such one hundred
eighty (180) day period or three hundred sixty (360) day period, as the case may
be.
9. CONFIDENTIALITY. (a) The Executive hereby acknowledges that the
Company and its affiliates may, from time to time during the Employment Period,
disclose to him confidential and proprietary information pertaining to the
business and affairs of the Company and its affiliates. The Executive will not,
at any time during or after such Employment Period, disclose to any third party
or directly or indirectly make use of any such confidential or proprietary
information other than in connection with, and in furtherance of, the business
and affairs of the Company ad its affiliates.
(b) All documents and data (whether written, printed or
otherwise reproduced or recorded) containing or relating to any such proprietary
information of the Company and its affiliates which come into the Executive's
possession during the Employment Period will be returned by him to the Company
immediately upon the termination of his employment or upon any earlier request
by the Company, and he will not retain any copies, notes or excerpts thereof.
(c) The Executive's obligations under this Section 9 will
continue in effect after termination of his employment with the Company,
whatever the reason or reasons for such termination, and the Company will have
the right to communicate with any of his future or prospective employers
concerning his continuing obligations under this Section 9.
10. OWNERSHIP RIGHTS. All materials, ideas, discoveries and inventions
pertaining to the business of the Company and its affiliates, including without
limitation all patents and copyrights, patent applications, patent renewals and
extensions belong solely to the Company and its affiliates.
11. TERMINATION. (a) The Executive's employment hereunder may be
terminated only under the following circumstances:
<PAGE>
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CUSIP No. 649290-20-2 13D Page 19 of 43 Pages
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(i) The Executive's employment hereunder shall terminate upon
his death or retirement in accordance with the Company's normal
retirement policies.
(ii) If the Executive is disabled within the meaning of
Section 8, the Company may terminate the Executive's employment upon
not less than thirty (30) days' prior written notice to the Executive
unless during such thirty-day period the Executive resumes the
performance of his duties hereunder on a full-time basis.
(iii) The Company may terminate the Executive's employment for
Cause. For purposes of this Agreement, the Company shall have "Cause"
to terminate the Executive's employment upon (a) the willful and
continued failure by the Executive to substantially perform his duties
hereunder (other than any failure resulting from the Executive's
disability or any actual or anticipated failure after the issuance of a
notice of termination under Subsection 11(b) or a termination by the
Executive for Good Reason under Section 11(a)(iv)), after written
demand for substantial performance is delivered by the Company
specifically identifying the manner in which the Company believes the
Executive has not substantially performed his duties, or (b) conviction
of a felony or a crime involving normal turpitude.
(b) Any termination of the Executive's employment by the
Company or by the Executive under this Section 11 (other than pursuant to
Subsection 11(a)(i) above) shall be communicated by written notice to the other
party hereto in accordance with this Section 11. Such notice shall indicate the
specific termination provision in this Agreement relied upon and shall set forth
in reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment.
(c) "Date of Termination" shall mean (i) if the Executive's
employment is terminated by his death or retirement, the date of death or
retirement, (ii) if the Executive's employment is terminated as a result of his
disability, thirty (30) days after notice of termination is given (provided that
the Executive shall not have returned to the performance of his duties on a
full-time basis during such thirty-day period), (iii) if the Executive's
employment is terminated pursuant to Subsection (a)(iii) or (iv) above, the date
specified in the notice of termination.
(d) If this Agreement is terminated by the Company as a
result of the disability of the Executive, the Company shall be
<PAGE>
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CUSIP No. 649290-20-2 13D Page 20 of 43 Pages
- ------------------------- -----------------------------
obligated to continue the salary and benefits of the Executive for a period of
twelve months or such greater period of time as the Board determines in its sole
discretion, in each case reduced by any disability insurance benefits provided
for the benefit of Executive at the expense of the Company. If the Executive is
terminated for any other reason, except for Cause, the Company shall maintain in
full force and effect for the Executive, for a period of twelve (12) months, all
employee welfare benefit plans in which the Executive was entitled to
participate immediately prior to the Date of Termination provided that the
Executive's continued participation is possible under the general terms and
provisions of such plans. In the event that the Executive's participation in any
such plan is barred, the Company shall arrange to provide the Executive with
benefits substantially similar to those which the Executive would otherwise have
been entitled to receive under such plans from which his continued participation
is barred.
(e) The Executive shall have no duty to mitigate his damages
following a termination of his employment.
12. SEVERANCE BENEFIT. (a) If the Company terminates the Executive for
any reason, other than a termination for death, retirement, disability or Cause,
including non-renewal of this Agreement, or if the Executive terminates this
Agreement for Good Reason or following a Change of Control, the Company shall
pay to the Executive an amount equal to three (3) years' base salary (the
"Severance Benefit"), payable on the Date of Termination.
(b) If the Executive is entitled to receive the Severance
Benefit following the termination of his employment and either party exercises
its option to purchase or sell any interest it may have in the Farmhouse
Property pursuant to Section 15, then the purchase price for such property
(determined in the manner set forth in Section 15) shall be credited toward and
offset against the Severance Benefit; or, if the Purchase Price is greater than
the Severance Benefit, the Executive shall pay the difference to the Company by
delivery of a promissory note payable in equal monthly installments over a
period of not less than three (3) years and bearing interest at a market rate.
Such note shall be secured by a mortgage on the Farmhouse Property.
13. NON-COMPETITION COVENANT. During the period of two (2) years
immediately following the termination of the Executive's employment, the
Executive agrees that he will not engage in any act which is directly
competitive with the Company's renewable energy activities or any other line of
business of the Company at the time. Prohibited acts include acting as a
financial interest,
<PAGE>
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CUSIP No. 649290-20-2 13D Page 21 of 43 Pages
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serving as a board member, serving as a consultant or otherwise assisting any
entity other than the Company which has one of its business, and such activity.
14. INDEMNIFICATION. The indemnification provisions of the Company's
Bylaws will be extended to the Executive, to the maximum extent permitted by
law, during the period following the termination, irrespective of a Change of
Control, with respect to any and all matters, events or transactions occurring
or effected during the Employment Period.
15. OPTIONS TO PURCHASE AND SELL. (a) The Company hereby gives and
grants to the Executive, his heirs, representatives and assigns (collectively,
for the purposes of this Section 15, the "Executive"), the right to purchase all
right, title and interest the Company may have in and to the land and all
buildings and improvements now or hereafter located thereon at 558 Lime Rock
Road, Salisbury, Connecticut, which property is more particularly described in
Exhibit A attached hereto (the "Farmhouse Property"), subject to the terms,
conditions and provisions of this Section.
(b) The Executive hereby gives and grants to the Company, the
right to sell all right, title and interest the Company may have in the
Farmhouse Property to the Executive, subject to the terms, conditions and
provisions of this Section.
(c) Either option described above may be exercised by giving
the other party written notice within thirty (30) days following the termination
of Executive's employment hereunder, time being of the essence. The closing date
("Closing Date") shall occur within ninety (90) days after such notice.
(d) The purchase price for the interest the Company may have
in the Farmhouse Property shall be the Company's depreciated cost basis in the
Farmhouse Property.
(e) If either of the options described above is exercised, the
sale and purchase of the Company's interest, if any, in the Farmhouse Property
shall take place on the Closing Date upon the terms and conditions set forth
herein and such other terms as may be mutually acceptable to the parties.
(i) The Company shall sell to the Executive and the
Executive shall purchase from the Company, any and all interest the
Company may have in the Farmhouse property free and clear of all
encumbrances, liens or defects in title, except those encumbrances
listed in Exhibit B attached hereto
<PAGE>
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CUSIP No. 649290-20-2 13D Page 22 of 43 Pages
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(the "Permitted Encumbrances"). The conveyance of any interest in the
Farmhouse Property shall be in the form of a Special Warranty Deed
which shall be duly executed, acknowledged and delivered, all at the
Company's expense, conveying fee simple marketable title in and to the
Farmhouse Property to the Executive free and clear of all encumbrances,
other than Permitted Encumbrances. The Company shall, upon the
recording of the deed for the Farmhouse Property, pay the amount of
applicable conveyance taxes, and any mortgage filing fees.
(ii) In the event that either party exercises its
option described above and the other party fails to perform any of its
obligations and duties under this Section 15, the exercising party
shall be free to seek whatever remedy may be available, either at law
or in equity, including without limitation, specific performance, in
order to enforce said option.
(iii) All closing adjustments will be made in
accordance with local custom and practices.
16. COUNSEL FEES AND INDEMNIFICATION. (a) The Company shall pay, or
reimburse the Executive, the reasonable fees and expenses of his personal
counsel for his professional services rendered to the Executive in connection
with this Agreement and matters related thereto.
(b) In the event that (i) the Company terminates, or seeks to
terminate the Executive's employment for Cause, the Executive disputes the
termination or attempted termination, and he prevails, or (ii) the Executive
elects to terminate his employment hereunder for Good Reason or within six (6)
months after a Change of Control, and the Company disputes its obligation to pay
him the Severance Benefit, and he prevails, then the Company shall pay, or
reimburse to the Executive, all reasonable costs incurred by him in such
dispute, including attorneys' fees and costs.
(c) The Company shall indemnify and hold the Executive
harmless to the maximum extent permitted by law against judgments, fines,
amounts paid in settlement and reasonable expenses, including attorneys' fees
incurred by him, in connection with the defense of, or as a result of any action
or proceeding (or any appeal from any action or proceeding) in which he is made
or is threatened to be made a party by reason of the fact that he is or was an
officer of the Company or any subsidiary or affiliate thereof, regardless of
whether such action or proceeding is one
<PAGE>
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CUSIP No. 649290-20-2 13D Page 23 of 43 Pages
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brought by or in the right of the Company, to procure a judgment in its favor
(or other than by or in the right of the Company). The undertakings of
Subparagraphs (a) and (b) above, are independent of, and shall not be limited to
or prejudiced by the undertakings in this Subparagraph (c).
(d) The Company further represents and warrants: (i) that the
Executive is and shall continue to be covered and insured up to the maximum
limits provided by all insurance which the Company maintains to indemnify its
directors and officers (and to indemnify the Company for any obligations which
it incurs as a result of its undertaking to indemnify its officers and
directors); and (ii) that the Company will use its best efforts to maintain such
insurance, in not less than its present limits, in effect throughout the Period
of Employment.
17. ARBITRATION. (a) Any controversy which may arise between the
Executive and the Company with respect to the construction, interpretation or
application of any of the terms, provisions, covenants or conditions of this
Agreement or any claim arising from or relating to this Agreement will be
submitted to final and binding arbitration in Hartford, Connecticut, in
accordance with the rules of the American Arbitration Association then in
effect.
(b) The Executive and the Company agree that neither they nor
their respective immediate family members, agents, assigns, officers, directors,
executives, heirs, successors or representatives, will publish, publicize or
disseminate, or cause to be published, publicized or disseminated, in any
manner, the details of any such controversy or arbitration proceedings, to any
third person, including, without limitation, any current or former Company
employee, organization, the news and communications media or any agents thereof,
excepting such disclosure as is required by law or that the Executive or the
Company makes to their respective attorneys, tax planners or advisors consulted
regarding it or any disclosure to members of the Executive's immediate family.
Furthermore, both the Executive and the Company may also disclose such
information to Company personnel on a need-to-know basis for purposes of
carrying out or effecting compliance with the parties' obligations under this
Agreement.
18. BINDING AGREEMENT. This Agreement shall be binding upon, and inure
to the benefit of, the Executive and the Company and their respective successors
and permitted assigns (including, without limitation, the surviving entity or
successor party resulting from a Change in Control).
<PAGE>
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CUSIP No. 649290-20-2 13D Page 24 of 43 Pages
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19. NONASSIGNABILITY. Neither this Agreement nor any right or interest
hereunder shall be assignable by the Executive, his beneficiaries, or legal
representatives without the Company's prior written consent; provided, however,
that nothing in this Section 19 shall preclude (i) the Executive from
designating a beneficiary to receive any benefit payable hereunder upon his
death, or (ii) the executors, administrators or other legal representatives of
the Executive or his estate from assigning any rights hereunder to any person
entitled thereto.
20. GOVERNING LAW. This Agreement will be governed by, and construed
and interpreted in accordance with, the laws of the State of Delaware.
21. ENTIRE AGREEMENT; AMENDMENT. This Agreement sets forth the entire
agreement between the parties relating to the terms of the Executive's
employment and it supersedes all prior agreements and understandings with
respect to such subject matter. This agreement any only be amended by written
instrument signed by the Executive and an authorized officer of the Company.
22. WAIVER. No term or condition of this Agreement shall be deemed to
have been waived, nor shall there by any estoppel against the enforcement of any
provision of this Agreement, except by written instrument of the party charged
with such waiver or estoppel. No such written waiver shall be deemed a
continuing waiver unless specifically stated therein, and each such waiver shall
operate only as to the specific term or condition waived and shall not
constitute a waiver of such terms or condition for the future or as to any act
other than that specifically waived.
23. SEVERABILITY. If any provision of this Agreement is held to be
invalid or unenforceable for any reason, such invalidity or unenforceability
shall not affect any other provision of this Agreement not held so invalid or
unenforceable, and each such other provision shall to the full extent consistent
with law continue in full force and effect. If any provision of this Agreement
shall be held invalid or unenforceable in part, such invalidity or
unenforceability shall in no way affect the rest of such provision, and the rest
of such provision, together with all other provisions of this Agreement, shall
to the full extent consistent with law continue in full force and effect. If any
one or more of the provisions of this Agreement shall for any reason be held to
be excessively broad as to duration, geographic scope, activity or subject, it
shall be construed by limiting and reducing it, so as to be enforceable to the
extent compatible with applicable law.
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CUSIP No. 649290-20-2 13D Page 25 of 43 Pages
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24. EQUITABLE RELIEF. The parties hereto acknowledge and agree that
Executive's duties under Sections 9, 10 and 13 of this Agreement are vitally
important to the continuing welfare of the Company and that a remedy at law for
any breach or threatened breach of these provisions would be wholly inadequate.
Accordingly, the parties agree that the Company shall be entitled to specific
performance and/or injunctive relief in order to enforce or prevent any
violations of the provisions of such Sections. Such remedies shall be cumulative
and not exclusive and shall be in addition to any other remedies which the
parties hereto may possess.
IN WITNESS WHEREOF the parties have signed his Agreement as of the date
set forth above.
The Company:
THE NEW WORLD POWER CORPORATION
By: /s/ Robert R. Macdonald
---------------------------
Robert R. MacDonald, Its Vice
Chairman
The Executive:
/s/ John D. Kuhns
-------------------------------
John D. Kuhns
<PAGE>
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CUSIP No. 649290-20-2 13D Page 26 of 43 Pages
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EXHIBIT A
(LEGAL DESCRIPTION OF PROPERTY AND PERMITTED ENCUMBRANCES)
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CUSIP No. 649290-20-2 13D Page 27 of 43 Pages
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TERMINATION AGREEMENT
The undersigned hereby agree to terminate the Management Agreements
entered in as of December 1, 1989, by and between East Rock Partners, Inc. a
Delaware corporation, and Arcadian Renewable Power Corporation, formerly named
Fayette Energy Corporation, a Delaware corporation, and Wolverine Power
Corporation, successor to Wolverine Hydroelectric Corporation, a Delaware
corporation, respectively. The effective date of termination shall be July 31,
1995.
IN WITNESS WHEREOF the parties have caused this Agreement to be signed
by their duly authorized officers as of August 1, 1995.
ARCADIA RENEWABLE POWER CORPORATION
By: /s/ Dwight C. Kuhns
--------------------------------
Dwight C. Kuhns, its President
WOLVERINE POWER CORPORATION
By: /s/ Dwight C. Kuhns
--------------------------------
Dwight C. Kuhns, its President
EAST ROCK PARTNERS, INC.
By: /s/ John D. Kuhns
--------------------------------
John D. Kuhns, its President
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CUSIP No. 649290-20-2 13D Page 28 of 43 Pages
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EXHIBIT 3
---------
AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT
---------------------------------------
WHEREAS, The New World Power Corporation (the "Company")
entered into an employment agreement with John D. Kuhns (the "Executive") as of
August 1, 1995 (the "Employment Agreement"); and
WHEREAS, the Company and the Executive are desirous of
amending certain provisions in the Employment Agreement; and
WHEREAS, the Company has instituted an across-the-board salary
reduction for all employees of the Company and its wholly owned subsidiaries of
25% or more;
Accordingly, in consideration of the premises and respective
covenants and agreements set forth herein, and intending to be legally bound
hereby, the parties hereby agree, effective March 1, 1996, as follows:
1. COMPENSATION. Until such time as the Company has paid in
full its 8% Convertible Subordinated Notes, as amended, due July 31, 1997 (the
"Notes"):
(1) The Executive's Base Salary will be at the annual rate of
Two Hundred Twenty Thousand Dollars ($220,000);
(b) The Executive shall receive monthly proceeds from the sale
of Common Stock of The New World Power Corporation (which the Company hereby
agrees to use its best efforts to effect) through Oakes, Fitzwilliams acting as
agent, or through another
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CUSIP No. 649290-20-2 13D Page 29 of 43 Pages
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agent satisfactory to the Executive, provided that Executive shall not receive
in excess of $12,000 per month for those sales except to the extent required to
make up in any monthly period shortfalls for prior monthly periods;
(c) The Executive shall receive as a bonus a portion of the
gross cash proceeds of the sale of the assets, provided such sale occurs prior
to the termination of the Executive's employment, listed on Schedule A as
follows: (i) one-half of one percent (.5%) of the gross cash proceeds derived
from the sale of any assets up to the "minimum value" plus (ii) two percent (2%)
of any gross cash proceeds in excess of the "minimum value." The sale of assets
shall be deemed to occur upon the execution of a definitive agreement, provided
that no sums shall be due unless and until the buyer has delivered the cash
proceeds. Notwithstanding the foregoing, however, the Executive shall not be
entitled to receive pursuant to Sections 1(a), 1(b) and 1(c) hereof any amount
in any year in excess of $480,000 regardless of any amounts paid in any other
year.
(d) The Executive shall accept in lieu of any Severance
Benefit or other unpaid compensation due upon termination, and the Company shall
be obligated to transfer, the Farmhouse Property, including all furniture and
fixtures thereon and excluding all files, business records and readily removable
items necessary to the continued operation of the Company. In the event the
Company is
<PAGE>
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CUSIP No. 649290-20-2 13D Page 30 of 43 Pages
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obligated to transfer the Farmhouse Property to the Executive, the Company shall
prepare at its own expense all documentation necessary for the transfer, which
shall be completed within 10 business days following the Executive's termination
of employment; the Executive shall accept title to the Farmhouse Property
pursuant to a Special Warranty Deed and the Company shall pay the amount of
applicable conveyance taxes and any mortgage filing fees. Nothing in this
Section 1(d) shall be deemed to entitle the Executive to any greater rights to a
Severance Benefit that he would be entitled to receive under the Employment
Agreement.
(e) The Executive shall not seek to enforce any claim, or make
any demand for, or have any recourse with respect to, compensation or cash
payments from the Company except pursuant to the Employment Agreement as
amended.
2. WAIVERS. The Executive hereby consents to the foregoing change in
compensation and waives any claim that such change constitutes "Good Reason"
under paragraph 11(a)(iv) of the Employment Agreement and waives any claim to
the Severance Benefit as a result of the foregoing change.
3. DEFERRED SHARES. As part of the Executive's deferred compensation,
the Company agrees to set aside 16,250 shares of Common Stock in the name of the
Executive at the beginning of each of twelve consecutive months beginning March
1, 1996 (the "Shares") for delivery to the Executive on January 31,
<PAGE>
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CUSIP No. 649290-20-2 13D Page 31 of 43 Pages
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1997 to the extent Shares have accrued prior to January 31, 1997 and for
delivery to the Executive on January 31, 1998 to the extent Shares accrue after
January 31, 1997 PROVIDED, HOWEVER, that Shares shall cease to accrue further to
the Executive if his employment with the Company is terminated for any reason,
PROVIDED FURTHER, that if the Executive's employment with the Company is
terminated for any reason, nothing in this Section 3 shall be deemed to prevent
delivery, on the appropriate date, of Shares which have accrued to the Executive
prior to the date of the termination of his employment with the Company.
4. REGISTRATION STATEMENT. In the event the Company files a
registration statement, it shall also register the Shares, if the Executive so
requests.
5. FUTURE OPTION GRANTS. The Company through its Board of Directors
may, from time to time at the discretion of the Company, grant stock options to
the Executive and other employees of the Company.
6. CONDITION PRECEDENT. This Amendment shall be effective upon approval
of the Company's Board of Directors or upon the approval of the Compensation
Committee of the Board of Directors of the Company.
7. MISCELLANEOUS. a) The parties hereto acknowledge that the firm
Olshan Grundman Frome and Rosenzweig LLP ("OGFR") served as counsel to the
<PAGE>
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CUSIP No. 649290-20-2 13D Page 32 of 43 Pages
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Executive in connection with the negotiation of the Employment Agreement and
that OGFR is acting as counsel to the Company in connection with the negotiation
of this Amendment. Both sides further acknowledge that OGFR has acted, and
continues to act, as counsel for the Executive in certain matters unrelated to
his employment with the Company or the business affairs of the Company and that
OGFR has acted, and continues to act, as counsel to the Company in certain
litigation matters and in connection with the restructuring of the Notes. All
parties consent to the firm OGFR representation of the Company in connection
with the negotiation of this Amendment. The Executive has had an opportunity to
consult independent counsel concerning the terms of this Amendment.
b) Upon payment in full of the Notes, Paragraph 1 hereof shall
cease to be effective and the Executive's compensation shall be determined in
accordance with the Employment Agreement, as amended by Paragraphs 2, 3 and 4
hereof.
c) Except as modified herein, the Employment Agreement shall
remain in full force and effect. The Employment Agreement, as amended hereby,
sets forth the entire understanding of the parties hereto with respect to the
matters covered by the Employment Agreement as amended.
IN WITNESS WHEREOF, the parties have signed this Amendment as
of the date first set forth above.
<PAGE>
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CUSIP No. 649290-20-2 13D Page 33 of 43 Pages
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THE NEW WORLD POWER CORPORATION
By: /s/ Robert R. Mcdonald
---------------------------
Robert R. McDonald, its
Vice Chairman
/s/ John D. Kuhns
-----------------
John D. Kuhns
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CUSIP No. 649290-20-2 13D Page 34 of 43 Pages
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EXHIBIT 4
---------
AMENDMENT NO. 2 TO EMPLOYMENT AGREEMENT
---------------------------------------
WHEREAS, The New World Power Corporation (the "Company")
entered into an employment agreement with John D. Kuhns (the "Executive") as of
August 1, 1995 (the "Employment Agreement"); and
WHEREAS, the Company and the Executive entered into Amendment
No. 1 to the Employment Agreement, March 1, 1996 ("Amendment No. 1"); and
WHEREAS, the Company and the Executive are desirous of further
amending certain provisions in the Employment Agreement; and
WHEREAS, the Company has instituted salary reductions for
certain employees of the Company and its wholly owned subsidiaries;
Accordingly, in consideration of the premises and respective
covenants and agreements set forth herein, and intending to be legally bound
hereby, the parties hereby agree, effective March 31, 1996, as follows:
1. AMEND NO. 1. Amendment No. 1 is hereby cancelled and
terminated effective March 31, 1996. Both the Executive and the Company
acknowledge that each has fully performed its obligations under Amendment No. 1.
<PAGE>
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CUSIP No. 649290-20-2 13D Page 35 of 43 Pages
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2. EMPLOYMENT DUTIES AND TERM. Paragraph 2(a) of the Employment
Agreement is amended to delete "and Chief Executive Officer" and paragraph 1 of
the Employment Agreement is amended to change "July 31, 2001" to "July 31, 1997"
and "five (5)" to "two (2)."
3. COMPENSATION AND DUTIES
(a) Paragraph 2(a) of the Employment Agreement is amended to add
the following: "The principal duties of the Executive, unless modified by a vote
of the Board of the Company with the Executive's written consent, shall be
assisting current management in the further development and marketing of
projects now in development and assistance in the sale of assets set forth in
the Company's most recent business plan, PROVIDED THAT nothing in the foregoing
shall require the Company to develop any projects or sell any assets should it
determine in its sole discretion not to do so; and any such determination by the
Company shall neither be a breach of the Employment Agreement as amended nor
give rise to any rights to compensation by the Executive, except as set forth in
the Employment Agreement as amended. The Executive shall work with, and report
to, the Chief Executive Officer, or such other person as the Board may direct.
(b) The Executive's Base compensation will be at the monthly rate of Eighteen
Thousand Three Hundred and Thirty Three Dollars ($18,333), payable on the first
day of each month;
<PAGE>
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CUSIP No. 649290-20-2 13D Page 36 of 43 Pages
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(c) In addition, the Executive shall receive additional
compensation of twelve thousand dollars ($12,000) per month by the fifteenth day
of each month, in either of the following ways which the Company may select at
its sole discretion:
(i) monthly proceeds from the sale of Common Stock
of The New World Power Corporation (which the Company hereby agrees to use its
best efforts to effect) through Oakes, Fitzwilliams acting as agent, or through
another agent satisfactory to the Executive and the Company, provided that
Executive shall not receive in excess of $12,000 per month for those sales
except to the extent required to make up in any monthly period shortfalls for
prior monthly periods; or
(ii) in lieu of subpart (i) and/or to the extent
not previously paid under subpart (i), from funds legally available to the
Company, an amount sufficient to compensate the Executive at the monthly rate of
Twelve Thousand Dollars ($12,000) through the date of any asset sale.
(d) In addition, the Executive shall receive as a bonus a
portion of the gross cash proceeds of the sale of the assets, provided such sale
occurs prior to the termination of the Executive's employment, listed on
Schedule A as follows: (i) one-half of one percent (.5%) of the gross cash
proceeds derived from the sale of any assets up to the "minimum value" plus (ii)
two percent (2%) of any gross cash proceeds in excess of the "minimum
<PAGE>
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CUSIP No. 649290-20-2 13D Page 37 of 43 Pages
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value." The sale of assets shall be deemed to occur upon the execution of a
definitive agreement, provided that no sums shall be due unless and until the
buyer has delivered the cash proceeds. Notwithstanding the foregoing, however,
the Executive shall not be entitled to receive pursuant to Sections 1(b), 1(c),
and 1(d) hereof any amount in any year in excess of $480,000 regardless of any
amounts paid in any other year.
(e) In lieu of a Severance Benefit and/or any unpaid
compensation upon termination or upon non-renewal, the Company shall pay, and
Executive shall accept, either (i) the Severance Benefit in cash form as
computed under the Employment Agreement before amendment, or (ii) in the
Company's sole discretion, the Farmhouse Property, which the Company shall
transfer to the Executive no later than 90 days after termination of the
Executive's employment. The Farmhouse Property shall be transferred free of all
liens or other encumbrances other than liens or encumbrances that run with the
real property on which the Farmhouse Property is located, and shall include all
furniture and fixtures thereon and exclude all files, business records and
readily removable items necessary to the continued operation of the Company. In
the event the Company elects to transfer the Farmhouse Property to the
Executive, the Company shall prepare at its own expense all documentation
necessary for the transfer, which shall be completed within 10 business days
following the Executive's
<PAGE>
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CUSIP No. 649290-20-2 13D Page 38 of 43 Pages
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termination of employment; the Executive shall accept title to the Farmhouse
Property pursuant to a Special Warranty Deed in form acceptable to the town of
Salisbury and County of Litchfield and the Company shall pay the amount of
applicable conveyance taxes and any mortgage filing fees. The value for the
Farmhouse Property shall be such amount as the parties' agree or, if no
agreement is reached prior to transfer, at the value shown in an appraisal to be
obtained by the Executive from a licensed real estate professional with an
office in Litchfield County and delivered upon the transfer. Nothing in this
Section 1(d) shall be deemed to entitle the Executive to any greater rights to a
Severance Benefit that he would be entitled to receive under the Employment
Agreement. After the Executive's termination or the Initial Term, the Company
shall make the Farmhouse Property available at reasonable times for showing to
potential buyers designated by Executive.
(f) The Executive shall not seek to enforce any claim, or make
any demand for, or have any recourse with respect to, compensation or cash
payments from the Company except pursuant to the Employment Agreement as
amended.
4. Waivers. The Executive hereby consents to the foregoing change in
compensation and waives any claim that such change constitutes "Good Reason"
under paragraph 11(a)(iv) of the Employment Agreement and waives any claim to
the Severance Benefit as a result of the foregoing change.
<PAGE>
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CUSIP No. 649290-20-2 13D Page 39 of 43 Pages
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5. DEFERRED SHARES. To induce the Executive to sign this Amendment, the
Company agrees to set aside 16,250 shares of Common Stock in the name of the
Executive at the beginning of each of twelve consecutive months beginning March
1, 1996 (the "Shares") for delivery to the Executive on January 31, 1997 and for
delivery to the Executive on January 31, 1998 to the extent Shares accrue after
January 31, 1997 PROVIDED, HOWEVER, that Shares shall cease to accrue further to
the Executive if his employment with the Company is terminated for any reason,
PROVIDED FURTHER, that if the Executive's employment with the Company is
terminated for any reason other than Cause or by the Executive without Good
Reason, nothing in this Section 6 shall be deemed to prevent delivery on the
appropriate date, of all Shares which have accrued to the Executive prior to the
date of the termination of his employment with the Company. All shares accruing
hereunder shall be non-transferable prior to delivery to the Executive and may
not be voted by the Executive at any meeting of Shareholders. This provision
replaces any obligation of the Company under Section 3 of Amendment No. 1.
6. FUTURE OPTION GRANTS. The Company through its Board of Directors
may, from time to time at the discretion of the Company, grant stock options to
the Executive or award any other form of compensation.
<PAGE>
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CUSIP No. 649290-20-2 13D Page 40 of 43 Pages
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7. CONDITION PRECEDENT. This Amendment shall be effective upon approval
of the Company's Board of Directors or upon the approval of the Compensation
Committee of the Board of Directors of the Company.
8. MISCELLANEOUS.
(a) The parties hereto acknowledge that the firm Olshan Grundman
Frome and Rosenzweig LLP ("OGFR") served as counsel to the Executive in
connection with the negotiation of the Employment Agreement and that OGFR is
acting as counsel to the Company in connection with the negotiation of this
Amendment and Amendment No. 1. Both sides further acknowledge that OGFR has
acted, and continues to act, as counsel for the Executive in certain matters
unrelated to his employment with the Company or the business affairs of the
Company and that OGFR has acted, and continues to act, as counsel to the Company
in certain litigation matters and in connection with the restructuring of the
Notes. All parties consent to the firm OGFR representing the Company in
connection with the negotiation of this Amendment. The Executive has had an
opportunity to consult independent counsel concerning the terms of this
Amendment.
(b) Paragraph 13 of the Employment Agreement is deleted.
(c) Paragraph 15 of the Employment Agreement is deleted. The term
"Farmhouse Property" is defined as the buildings and improvements now or
hereafter located at 558 Lime Rock Road,
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CUSIP No. 649290-20-2 13D Page 41 of 43 Pages
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Salisbury, Connecticut. The Company represents that it has no interest in the
real property located at the above address other then its interests in the
Farmhouse Property which it holds free and clear of all liens or encumbrances
other than those that run with the real property underlying the Farmhouse
Property.
(d) The Executive may only be terminated by the Board of the
Company.
(e) The Executive shall serve as an independent contractor and
shall be responsible for all taxes due on sums earned by him, so that the
Company shall not withhold state or federal taxes from sums due to the
Executive.
(f) In the event the Company fails to execute definitive
restructuring agreements with its lenders, Flemings & Co. Ltd. and Sundial & Co.
Ltd., before May 31, 1996, the Executive may within 5 days thereafter, in his
sole discretion, by written notice to the Company, terminate this Amendment No.
2.
(g) Except as modified herein, the Employment Agreement shall
remain in full force and effect. The Employment Agreement, as amended hereby,
sets forth the entire understanding of the parties hereto with respect to the
matters covered by the Employment Agreement as amended.
<PAGE>
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CUSIP No. 649290-20-2 13D Page 42 of 43 Pages
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IN WITNESS WHEREOF, the parties have signed this Amendment as
of the date first set forth above.
THE NEW WORLD POWER CORPORATION
By:/s/ Robert R. Mcdonald
-------------------------
Robert R. McDonald, its
Vice Chairman
/s/ John D. Mcdonald
--------------------------
John D. McDonald
<PAGE>
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CUSIP No. 649290-20-2 13D Page 43 of 43 Pages
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SCHEDULE A
----------
Minimum
Asset Sale Price
----- ----------
1. Shares of Photocomm $16.5 million
2. Xia Yang Hydroelectric $4.2 million for the 24%
Facility currently held by the Company
3. Solartech $1.5 million for the 51%
equity interest currently
held by the Company
4. UK Wind Farms $5.5 million for the 100%
equity
5. Dona Julia $1.0 million for the 100%
equity interest, net of
project liabilities
6. REIL shares $2.5 million for the 79%
equity interest in REIL held
by the Company
