GREENMAN TECHNOLOGIES, INC.
7 Kimball Lane, Building A
Lynnfield, Massachusetts 01940
(781) 224-2411
-----------------
NOTICE OF SPECIAL MEETING IN LIEU OF ANNUAL
MEETING OF STOCKHOLDERS
March 31, 1999
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TO THE STOCKHOLDERS:
A Special Meeting in Lieu of Annual Meeting of Stockholders (the "Meeting")
of GreenMan Technologies, Inc., a Delaware corporation, will be held on
Wednesday, March 31, 1999, at 10:00 a.m., at The Boston Stock Exchange, 100
Franklin Street, Boston, Massachusetts 02110, for the following purposes:
1. To elect five (5) members of the Board of Directors.
2. To approve an amendment to the Company's Certificate of Incorporation
to increase the number of authorized shares of the Company's Common
Stock from 20,000,000 to 50,000,000.
3. To consider and act upon a proposal to increase the number of shares
of Common Stock authorized under the 1993 Stock Option Plan to
2,000,000 shares.
4. To consider and act upon a proposal to ratify the selection of the
firm of Wolf & Company, P.C. as independent auditors for the fiscal
year ending September 30, 1999.
5. 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 March 1, 1999 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
ROBERT H. DAVIS
Chief Executive Officer
March 12, 1999
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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.
<PAGE>
GREENMAN TECHNOLOGIES, INC.
7 Kimball Lane, Building A
Lynnfield, Massachusetts 01940
(781) 224-2411
---------------
PROXY STATEMENT
---------------
March 5, 1999
Proxies in the form enclosed with this proxy statement are solicited by the
Board of Directors of GreenMan Technologies, Inc. (the "Company") at the
Company's expense for use at the Special Meeting in Lieu of Annual Meeting of
Stockholders (the "Meeting") to be held on Wednesday, March 31, 1999, at 10:00
a.m., at The Boston Stock Exchange, 100 Franklin Street, Boston, Massachusetts
02110.
Only stockholders of record as of March 1, 1999 will be entitled to vote at
the Meeting and any adjournments thereof. As of that date, 11,242,917 shares of
Common Stock, $.01 par value, (the "Common Stock") of the Company were issued
and outstanding. The holders of 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 stockholder's right to
attend the Meeting and vote in person. Any stockholder giving a proxy has the
right to revoke it by notice to the Secretary of the Company at any time before
it is exercised.
The persons named as attorneys in the proxies are directors and officers of
the Company. All properly executed proxies returned in time to be counted at the
Meeting will be voted and, with respect to the election of the Board of
Directors, 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 to the election of Directors,
the stockholders will consider and vote upon proposals: (i) to approve an
amendment to the Company's Certificate of Incorporation to increase the number
of authorized shares of the Company's Common Stock from 20,000,000 to
50,000,000; (ii) increase the number of shares of Common Stock authorized under
the 1993 Stock Option Plan to 2,000,000 and (iii) to ratify the selection of
Wolf & Company, P.C. as auditors, as further described in this proxy statement.
Where a choice has been specified on the proxy with respect to the foregoing
matters, 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 at least a majority of the
outstanding shares of Common Stock entitled to vote at the Meeting is necessary
to establish a quorum for the transaction of business. Vote 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 affirmative vote of the holders of a
majority of the Common Stock issued and outstanding is required for approval of
the proposed amendment to the Company's Certificate of Incorporation. All other
matters being submitted to stockholders require the affirmative vote of the
majority of shares present in person or represented by proxy at the Meeting. An
automated system administered by the Company's 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 the
Company will be voted with respect thereto in accordance with the judgment of
the persons named as attorneys in the proxies.
<PAGE>
In June 1998, the Board of Directors of the Company adopted a change of its
fiscal year from May 31 to September 30. Accordingly, the transition period
information contained herein reflects a four month transition period (the
"Transition Period").
The Company's Annual Report, containing financial statements for the
Transition Period ended September 30, 1999, 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
the date above.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding beneficial
ownership of the Company's Common Stock as of March 1, 1999: (i) by each person
who is known by the Company to have beneficial ownership of 5% or more of the
outstanding shares of Common Stock; (ii) by each director and officer of the
Company (including any "group" as used in Section 13(d)(3) of the Securities
Exchange Act of 1934); and (iii) by all directors and officers of the Company as
a group. Unless otherwise indicated below, to the knowledge of the Company, 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 March 1, 1999, there were issued and outstanding
11,242,917 shares of Common Stock.
<TABLE>
<CAPTION>
Number of Shares
Beneficially Percentage
Title of Class Name(1) Owned(2) of Class
-------------- ------- -------- --------
<S> <C> <C> <C>
Common Stock Joseph E. Levangie(3)............................. 1,253,093 10.56%
Common Stock Maurice E. Needham(4)............................. 1,134,823 9.94%
Common Stock Robert D. Maust(6)................................ 241,556 2.14%
Common Stock Robert H. Davis(5)................................ 283,797 2.50%
Common Stock Charles E. Coppa(7)............................... 206,951 1.84%
Common Stock Lew F. Boyd(8).................................... 150,228 1.33%
Common Stock Jagruti Oza(9).................................... 79,788 *
Common Stock All officers and directors as a group (6 persons). 2,097,143 18.01%
Class B Convertible
Preferred Stock United Waste Service, Inc. ....................... 320,000 100%
</TABLE>
- - ----------
* Less than 1% of the outstanding Common Stock.
(1) Each person's address is care of GreenMan Technologies, Inc., 7 Kimball
Lane, Building A, Lynnfield, MA 01940.
(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 626,500 shares of Common Stock issuable pursuant to immediately
exercisable stock options and warrants.
(4) Includes 178,140 shares of Common Stock issuable pursuant to immediately
exercisable stock options and warrants. Also includes 55,556 shares of
Common Stock and 10,000 shares of Common Stock issuable pursuant to
immediately exercisable outstanding warrants owned by Mr. Needham's wife.
Does not include 520,400 shares of Common Stock issuable pursuant to
outstanding stock options that are not currently exercisable.
(5) Includes 103,000 shares of Common Stock issuable pursuant to immediately
exercisable stock options and warrants. Does not include 332,000 shares of
Common Stock issuable pursuant to outstanding stock options that are not
currently exercisable.
2
<PAGE>
(6) Includes 46,400 shares of Common Stock issuable pursuant to immediately
exercisable stock options and warrants. Does not include 130,000 shares of
Common Stock issuable pursuant to outstanding stock options that are not
currently exercisable.
(7) Includes 35,000 shares of Common Stock issuable pursuant to immediately
exercisable stock options and warrants. Does not include 104,000 shares of
Common Stock issuable pursuant to outstanding stock options that are not
currently exercisable.
(8) Includes 36,000 shares of Common Stock issuable pursuant to immediately
exercisable stock options. Does not include 96,000 shares of Common Stock
issuable pursuant to outstanding stock options that are not currently
exercisable.
(9) Includes 4,600 shares of Common Stock issuable pursuant to immediately
exercisable stock options. Does not include 2,400 shares of Common Stock
issuable pursuant to outstanding stock options that are not currently
exercisable.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The Company's By-Laws currently provide that the Board of Directors shall
consist of no less than five members who shall be elected at the annual meeting
of stockholders of the Company. Pursuant to Proposal No. 1, the five (5)
nominees listed below will be nominated to serve until the next Annual Meeting
of Stockholders and until their successors are elected. Directors chosen to fill
vacancies on a classified board shall hold office until the next election of the
class for which directors shall have been chosen, and until their successors are
duly elected by the stockholders. 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 no
so marked to withhold authority to vote for any individual nominee will be voted
(unless one or both nominees are unable or unwilling to serve) FOR the election
of 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 table sets forth for each nominee to be considered for
election at the Meeting and for each director whose term of office will extend
beyond the Meeting, the year each such nominee or director was first elected a
director, the positions currently held by each nominee or director with the
Company and the year each nominee's or director's term will expire.
Nominee's or Director's Name
and Year Nominee or Year Term
Director First Became Director Position(s) Held Will Expire
------------------------------ ---------------- -----------
Maurice E. Needhan............. Chairman of the Board 2000
1993
Robert H. Davis................ Chief Executive Officer, 2000
1997 President and Director
Robert D. Maust................ Vice President of Operations 2000
1997 and Director
Lew F. Boyd.................... Director 2000
1992
Jagruti Oza.................... Director 2000
1998
3
<PAGE>
OCCUPATIONS OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth all of the candidates for election of
directors at the Meeting, and the executive officers of the Company, their ages,
and the positions currently held by each such person with the Company.
Name Age Position
---- --- --------
Maurice E. Needham(1)....... 58 Chairman of the Board of Directors
Robert H. Davis............. 56 Chief Executive Officer; President; Director
Charles E. Coppa............ 36 Acting Chief Financial Officer; Treasurer;
Secretary
Robert D. Maust............. 60 Vice President of Operations; Director
Lew F. Boyd(1) (2).......... 53 Director
Jagruti Oza(2).............. 38 Director
- - ----------
(1) Member of the Compensation Committee
(2) Member of the Audit Committee
MAURICE E. NEEDHAM has been Chairman of the Company since June 1993. From
June 1993 to July 21, 1997, Mr. Needham also served as Chief Executive Officer
of the Company. He also serves as Chairman of Electronic Packaging Interconnect
Corporation ("EPIC"), an electronics contract manufacturer since October 1997.
He previously served as Chairman of Dynaco Corporation, a manufacturer of
flexible printed circuit boards which he founded in 1987. Prior to 1987, Mr.
Needham spent 17 years at Hadco Corporation, a printed circuit board
manufacturer, where he served as President, Chief Operating Officer and
Director.
ROBERT H. DAVIS has been Chief Executive Officer and a Director of the
Company since July 1997. Prior to joining the Company, Mr. Davis served as Vice
President of Recycling for Browning-Ferris Industries, Inc. of Houston, Texas
("BFI") since 1990. As an early leader of BFI's recycling division, Mr. Davis
grew that operation from startup to $650 million per year. A 25-year veteran of
the recycling industry, Mr. Davis has also held executive positions with Fibres
International, Garden State Paper Company, and SCS Engineers, Inc.
CHARLES E. COPPA has served as the Company's Acting Chief Financial
Officer, Treasurer and Secretary since March 1998. From October 1995 to March
1998, he served as Corporate Controller. Mr. Coppa was CFO and Treasurer of Food
Integrated Technologies of Brookline, MA, 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.
ROBERT D. MAUST has been Vice President of Operations and a Director since
July 1997 and was President of the Company's Recycling Operation from December
1996 to July 1997 and a Director of the Company since July 30, 1997. Prior to
joining the Company, Mr. Maust was Vice President for BFI's tire recycling
operations from July 1991 to 1996 and was instrumental in growing that operation
from 5 million tires/year to 22 million tires/year over a five year period. Mr.
Maust has over ten years experience in tire recycling. He was President of Maust
Tire Recycling from 1988 to 1991, when he sold the business to BFI and joined
BFI as Vice President.
LEW F. BOYD has been a Director of the Company 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.
JAGRUTI OZA has been a Director of the Company since March 12, 1998. Ms.
Oza is Vice President--Strategy and Acquisitions for VNU Marketing Information
Services, a subsidiary of VNU, a $3 billion international publishing and
marketing information service company. Previously, Ms. Oza was Vice
President--Corporate Planning for Public Service Enterprise Group ("PSEG") from
March 1995 to March 1998, a holding company with $6 billion in annual revenues
whose businesses include electric and gas utility, international power
development and retail energy services. From 1991 to 1995, Ms. Oza held various
managerial positions at PSEG
4
<PAGE>
including Regional Manager--Fossil Generation, overseeing the operation of three
power plants. Prior to joining PSEG, Ms. Oza was a management consultant with
Bain and Company (from 1987 to 1990) providing strategic management services to
multinational companies in the chemical, consumer products and retail service
industries.
Board Meetings and Committees
The Board of Directors met two times during the fiscal year ended May 31,
1998 and two times during the Transition Period. None of the directors attended
fewer than 75% of the meetings held during the period. The Board of Directors
took action by unanimous written consent in lieu of a meeting on four occasions
during the fiscal year ended May 31, 1998. There were no actions taken by
unanimous written consent in lieu of a meeting during the Transition Period.
On July 30, 1997, the Board of Directors established a Compensation
Committee and an Audit Committee. The Compensation Committee sets the
compensation of the Chief Executive Officer and reviews and approves the
compensation arrangements for all other officers of the Company. The Audit
Committee reviews all financial functions of the company, including matters
relating to the appointment and activities of the Company's auditors. The
Compensation Committee, which consists of Messrs. Needham and Boyd, met once
during the fiscal year ended May 31, 1998 and twice during the Transition
Period. The Audit Committee which consists of Mr. Boyd and Ms. Oza met twice
during the fiscal year ended May 31, 1998 and twice during the Transition
Period. The Board of Directors does not currently have a standing nominating
committee.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
Executive Compensation
The following table summarizes the compensation paid or accrued by the
Company for services rendered by the Company's Chief Executive Officer and its
Vice President of Operations during the Transition Period and the fiscal years
ended May 31, 1998 and 1997. The Company 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
Annual Compensation
-------------------
<TABLE>
<CAPTION>
Long-Term
Compensation
Securities
Name and Other Annual Underlying All Other
Principal Position Fiscal Year Salary Bonus Compensation(1) Options(3) Compensation(2)
------------------ ----------- ------ ----- --------------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Robert H. Davis............... 1998* $ 61,539 $ -- $ 3,985 -- $ --
Chief Executive Officer 1998 188,000 -- 7,740 415,000 --
1997 -- -- -- -- --
Robert D. Maust............... 1998* $ 38,464 $ -- $ 5,685 -- $ --
Vice President 1998 125,000 -- 11,940 140,000 19,000
1997 57,089 -- 3,600 30,000 --
</TABLE>
- - ----------
* Note: Information for the 1998* period reflects the period from June 1,
1998 through September 30, 1998.
(1) Represents payments made to or on behalf of Messrs. Davis and Maust for
health insurance and auto allowances.
(2) Represents payments made to Mr. Maust for relocation expenses.
(3) Represents options granted in July 1997 and March 1998 for Mr. Davis and
options granted in December 1996 and March 1998 to Mr. Maust. Does not
include 20,000 warrants to purchase shares of common stock granted to Mr.
Davis pursuant to a stock purchase agreement and 6,400 warrants to purchase
shares of common stock granted to Mr. Maust pursuant to the terms of loans
made to the Company by Mr. Maust.
5
<PAGE>
The following table sets forth information concerning the value of
unexercised options as of September 30, 1998 held by the executives named in the
Summary Compensation Table above. No options were exercised by such executive
officers during the transition period ended September 30, 1998.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES(1)
<TABLE>
<CAPTION>
Value of Unexercised
Number of Unexercised In-the-Money Options
Options at September 30, 1998(1) at September 30, 1998(2)
-------------------------------- ------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Robert H. Davis...... 8,000 407,000 $ -- $ --
Robert D. Maust...... 6,000 164,000 $ -- $ --
</TABLE>
- - ----------
(1) There were no options exercised by any of the executive officers named in
the Summary Compensation Table during the four months ended September 30,
1998. The options granted to the executive officers began to become
exercisable commencing July 17, 1998 in the case of Mr. Davis and December
30, 1997 in the case of Mr. Maust at an annual rate of 20% of the
underlying shares of Common Stock.
(2) Assumes that the value of shares of Common Stock is equal to $.60 per
share, which was the closing bid price of the Company's Common Stock as
listed by NASDAQ on September 30, 1998.
Employment Agreements
In July 1997, the Company entered into five-year employment agreements with
each of Messrs. Needham and Levangie pursuant to which Messrs. Needham and
Levangie will receive a salary of $90,000 per annum. Any increases or bonuses
will be made at the discretion of the Board of Directors upon the recommendation
of the Compensation Committee. The agreements provide for the payment of six
months salary as a severance payment for termination without cause.
Mr. Levangie resigned as an employee of the Company effective November 19,
1998, and in connection with such termination, the Company agreed to pay Mr.
Levangie his salary through December 31, 1999 and to accelerate the vesting of
his unvested options
In December 1996, the Company entered into a three-year employment
agreement with Mr. Robert D. Maust pursuant to which Mr. Maust will receive a
salary of $125,000 per annum. Any increases or bonuses will be made at the
discretion of the Board of Directors upon the recommendation of the Compensation
Committee. The agreement provides for the payment of twelve months salary as a
severance payment for termination without cause.
In June, 1997, the Company entered into a two-year employment agreement
pursuant to which Mr. Coppa will receive a salary of $80,000 per annum.
All of the Company's executive employees have executed confidentiality and
non-disclosure agreements concerning the Company's proprietary processes.
Stock Option Plan
The Company's 1993 Stock Option Plan (the "Plan") was adopted by the Board
of Directors on June 10, 1993 and approved by the stockholders on June 10, 1993.
Options granted under the Plan may be either (i) options intended to
qualify as "incentive stock options" under Section 422 of the Internal Revenue
Code of 1986, as amended (the "Internal Revenue Code"), or (ii) non-qualified
stock options. Incentive stock options may be granted under the Plan to
employees, including officers and directors who are employees. Non-qualified
options may be granted to employees, directors and consultants of the Company.
6
<PAGE>
The Plan is administered by the Board of Directors. Under the Plan, the
Board has the authority to determine the persons to whom options will be
granted, the number of shares to be covered by each option, whether the options
granted are intended to be incentive stock options, the manner of exercise, and
the time, manner and form of payment upon exercise of an option. On June 7, 1996
a Special Meeting of Stockholders was held and the Company increased the total
number of shares of Common Stock reserved for issuance under the Plan to .
Incentive stock options granted under the Plan may not be granted at a
price less than the fair market value of the 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 the voting stock of the Company). Non-qualified stock options may be
granted at an exercise price established by the Board which may not be less than
85% of fair market value of the shares on the date of grant. Incentive stock
options granted under the 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 the voting
stock of the Company.
As of September 30, 1998, there were 1,274,500 options granted and
outstanding under the Plan of which 58,120 options were exercisable at prices
ranging from $.45 to $5.65.
Non-Employee Director Stock Option Plan
On January 24, 1996, the Board of Directors of the Company adopted the 1996
Non-Employee Director Stock Option Plan ("Director Plan") and the Company's
stockholders' approved the Director Plan on June 7, 1996. The purpose of the
Director Plan is to promote the interests of the Company by providing an
inducement to obtain and retain the services of qualified persons who are not
officers or employees of the Company to serve as members of the Board of
Directors. The Board of Directors has reserved 60,000 shares of common stock for
issuance and as of September 30, 1998, options to purchase 8,000 shares of
Common Stock have been granted under the Director Plan.
Each person who was a member of the Board of Directors on January 24, 1996,
and was not an officer or employee of the Company, was automatically granted an
option to purchase 2,000 shares of the Company's Common Stock. In addition,
after an individual's initial election to the Board of Directors, any director
who is not an officer or employee of the Company who continues to serve as a
director will automatically be granted on the date of Annual Meeting of
Stockholders an additional option to purchase 2,000 shares of the Company's
Common Stock. The exercise price per share of options granted under the Director
Plan is 100% of the fair-market value of the Company's Common Stock on the
business day immediately prior to the date of the grant. Each option granted
under the 1996 Director Plan is immediately exercisable for a period of ten
years from the date of the grant.
On June 24, 1998, the Board of Directors approved an increase to the number
of shares authorized under the Director Plan to 2,000,000 subject to shareholder
approval.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING REQUIREMENTS
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's directors and officers, and persons who
own more than 10% of a registered class of the Company's equity securities, to
file initial reports of ownership and reports of changes in ownership with the
Securities and Exchange Commission (the "SEC"). Such persons are required by SEC
regulations to furnish the Company with copies of all Section 16(a) forms they
file.
Based solely on the Company's review of the copies of such forms received
by it or written representations from certain reporting persons, the Company
believes that during the year ended September 30, 1998, some of the filing
requirements applicable to its directors, executive officers and
greater-than-10% beneficial owners have not been met. No Form 3 has been filed
for Mr. Coppa and Ms. Oza, who joined the Company in 1998. No Form 5 has been
filed for the fiscal years ending May 31, 1997, May 31, 1998, or September 30,
1998 for Messrs.
7
<PAGE>
Needham, Maust, and Levangie. No Form 5 has been filed for the fiscal years
ending May 31, 1998 or September 30, 1998 for Messrs. Davis and Coppa and Ms.
Oza. Transactions that were not reported were the acquisition of common stock
through two private placements and the conversion of debt to equity. The current
stock ownership of the Company's directors and officers is indicated in this
proxy statement under the heading "Security Ownership of Certain Beneficial
Owners and Management." The Company intends to file promptly the appropriate
forms.
PROPOSAL NO. 2
PROPOSAL TO INCREASE AUTHORIZED SHARES OF COMMON STOCK
The Board of Directors has resolved to recommend to the stockholders that
the Company amend the Company's Certificate of Incorporation to increase the
number of authorized shares of Common Stock from 20,000,000 to 50,000,000
shares. Shares of the Company's Common stock, including the additional shares
proposed for authorization, do not have preemptive or similar rights. The text
of the proposed amendment is set forth in Exhibit I to this Proxy Statement.
If this proposal is approved and after giving effect to shares reserved for
issuance under the Company's stock plans, and shares reserved for issuance upon
the exercise of outstanding warrants, options and other commitments, the Board
of Directors will have the authority to issue approximately an additional
30,000,000 (as of January 31, 1999) shares of Common Stock without further
stockholder approval. The Board of Directors of the Company believes that the
increase in the number of authorized shares of common Stock is in the best
interests of the Company and its stockholders. The Board of Directors believes
that the authorized Common Stock should be increased to provide sufficient
shares for such corporate purposes as may be determined by the Board of
Directors. These purposes may include the issuance of Common Stock to facilitate
potential mergers or acquisitions, raising capital or acquiring technology
rights through the sale of stock, or attracting or retaining valuable employees
by the issuance of stock options, although the Company at present has no
commitments, agreements or undertakings obligating the Company to issue any such
additional shares. The Board of Directors, however, considers the authorization
of additional shares of Common Stock advisable to ensure prompt availability of
shares for issuance should the occasion arise.
Under the Delaware General Corporation Law, the Board of Directors
generally may issue authorized but unissued shares of Common Stock without
further stockholders approval. The Board of Directors does not currently intend
to seek stockholder approval prior to any future issuance of additional shares
of Common Stock, unless stockholder action is required in a specific case by
applicable law, the rules of any exchange or market on which the Company's
securities may then be listed, or the Certificate of Incorporation or By-Laws of
the Company then in effect. Frequently, opportunities arise that require prompt
action, and the Company believes that delay necessitated for stockholder
approval of a specific issuance could be to the detriment of the Company and its
stockholders.
The Board of Directors believes that the increase in the number of
authorized shares of undesignated Common Stock is in the best interests of the
Company and its stockholders, since the complexity of modern business financing
requires greater flexibility in the Company's capital structure than now exists.
The additional Common Stock to be available for issuance from time to time for
any proper corporate purposes, including public or private sale for cash as a
means of obtaining capital for the use in the Company's business or for the
acquisition by the Company of other businesses or assets. The Board of Directors
believes that having additional shares of Common Stock will provide the
flexibility and facility for finding financing sources quickly that may be
necessary for consummating any such transaction. Additionally, from time to
time, the Company is involved in various discussions with other companies
relating to the acquisition of complementary products or services, or other
forms of business combinations involving the Company. However, the Company has
no present commitments or agreements relating to any potential acquisitions or
financing. The Board of Directors, however, consider the authorization of such
additional shares advisable to ensure prompt availability of shares for issuance
should the occasion arise.
8
<PAGE>
The additional shares of Common Stock authorized for issuance pursuant to
this proposal will have the rights and privileges which the presently
outstanding shares of Common Stock possess under the Company's Certificate of
Incorporation. The increase in authorized shares would not affect the terms or
rights of holders of existing shares of Common Stock. The voting, dividend and
liquidation rights of the holders of Common Stock, however, are subordinate to
the rights of the holders of the Preferred Stock in certain instances. All
outstanding shares of Common Stock would continue to have one vote per share on
all matters to be voted on by the stockholders, including the election of
directors.
The issuance of any additional shares of Common Stock by the Company may,
depending on the circumstances under which those shares are issued, reduce
stockholders' equity per share and may reduce the percentage ownership of Common
Stock of existing stockholders. The Company expects, however, to receive
consideration for any additional shares of Common Stock issued, thereby reducing
or eliminating the economic effect to each stockholder of such dilution.
The authorized but unissued shares of Common Stock could be used to make
more difficult a change in control of the Company. For example, such shares
could be sold to purchasers who might side with the Board of Directors in
opposing a takeover bid that the Board determines not to be in the best
interests of the Company and its stockholders. Such a sale could have the effect
of discouraging an attempt by another person or entity, through the acquisition
of a substantial number of shares of the Company's Common Stock, to acquire
control of the Company since the issuance of new shares could be used to dilute
the stock ownership of the acquirer. Neither the Certificate of Incorporation
nor By-Laws of the Company now contain any provisions that are generally
considered to have an anti-takeover effect, and the Board of Directors does not
now plan to propose any anti-takeover measures in future proxy solicitations.
The Company is not aware of any pending or threatened efforts to obtain control
of the Company, and the Board of Directors has no current intention to use the
additional shares of Common Stock to impede a takeover attempt.
Approval of the amendment to increase the number of authorized shares of
Common Stock will require the affirmative vote of the holders of a majority of
the outstanding shares of Common Stock of the Company represented in person or
by proxy and entitled to vote at the Meeting. Abstentions will have the same
effect as a vote against the proposal; broker non-votes will have no outcome on
the vote.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THE AMENDMENT
TO THE COMPANY'S CERTIFICATE OF INCORPORATION TO INCREASE THE NUMBER OF
AUTHORIZED SHARES OF COMMON STOCK FROM 20,000,000 TO 50,000,000 SHARES.
PROPOSAL NO. 3
PROPOSAL TO INCREASE THE NUMBER OF SHARES
RESERVED UNDER THE 1993 PLAN
The 1993 Plan was adopted by the Company's Board of Directors on June 10,
1993 and approved by the Company's stockholders on June 10, 1993. A maximum of
82,000 shares of Common Stock were originally reserved for issuance under the
1993 Plan upon the exercise of options. In June 1996, the Company's stockholders
approved an increase to the number of shares authorized under the Plan to
200,000 shares (as adjusted for the Company's reverse 5:1 stock split). On June
24, 1998, the Board of Directors approved an increase to the number of shares
authorized under the Plan to 2,000,000 shares, subject to shareholder approval.
Since June 10, 1993, when the 1993 Plan was originally approved, the number
of employees at the Company has increased from approximately 60 to approximately
150 persons. The Company's management relies on stock options as an essential
part of the compensation packages necessary for the Company to attract and
retain experienced officers and employees. The Board of Directors of the Company
believes that the proposed increase in the number of shares available under the
1993 Plan is essential to permit the Company's management to continue to provide
long-term, equity-based incentives to present and future employees.
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During the fiscal year ended May 31, 1998, the Company granted 1,182,600
options under the 1993 Plan with fair market value exercise prices. There were
no options granted under the 1993 plan during the Transition Period ended
September 30, 1998.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THE PROPOSAL
TO AMEND THE COMPANY'S 1993 PLAN TO INCREASE FROM 200,000 TO 2,000,000 THE
NUMBER OF SHARES AUTHORIZED FOR ISSUANCE UNDER THE 1993 PLAN.
Description of the 1993 Plan
Purpose. The purpose of the 1993 Plan is to provide incentives to officers
and other employees of the Company by providing them with opportunities to
purchase stock of the Company.
Shares Subject to the 1993 Plan. As of March 1, 1999, the aggregate market
value of shares of Common Stock issuable pursuant to outstanding options under
the 1993 Plan was $ based upon the average of the bid-and-ask prices as quoted
on the Nasdaq SmallCap Market at the close of trading on that date.
Eligibility. Under the 1993 Plan, employees (including officers) of the
Company may be awarded incentive stock options ("ISO" or "ISOs"), as defined in
Section 422(b) of the Code, and directors, employees (including officers) and
consultants of the Company may be granted options which do not qualify as ISOs
("Non-Qualified Option" or "Non-Qualified Options"). ISOs and Non-Qualified
Options are sometimes collectively referred to as "Options."
Administration. The 1993 Plan is administered by the Board of Directors of
the Company. Subject to the terms of the 1993 Plan, the Board has the authority
to determine the persons to whom Options are granted, the number of shares
covered by each Option, the exercise price per share and other terms and
provisions governing the Options.
Option Price and Duration. The exercise price per share of Non-Qualified
Options granted under the 1993 Plan cannot be less than eighty-five percent
(85%) of the fair-market value of the stock subject to the option on the date
the option is granted. The exercise price per share of ISOs cannot be less than
the fair-market value of the Common Stock on the date of grant (or, in the case
of ISOs granted to employees holding more than 10% of the voting stock of the
Company, one hundred ten percent (110%) of the fair-market value of the Common
Stock on the date of grant). The 1993 Plan provides that each option shall
expire on the date specified by the Committee, but not more than ten years from
its date of grant and five years in the case of ISOs granted to an employee or
officer holding more than ten percent (10%) of the voting stock of the Company.
Exercise of Options. Each Option granted under the 1993 Plan may either be
fully exercisable at the time of grant or may become exercisable in such
installments as the Board may specify. Each Option may be exercised from time to
time, in whole or in part, up to the total number of shares with respect to
which it is then exercisable. The Board has the right to accelerate the date of
exercise of any installment of any option (subject to the $100,000-per-year
limitation on the fair-market value of stock subject to ISOs granted to any
employee which become exercisable in any calendar year).
Payment of Stock. Payment of the exercise price of an option granted under
the 1993 Plan may be made (i) in cash; (ii) by tendering Common Stock of the
Company; (iii) according to a deferred payment arrangement; or (iv) in any other
form of legal consideration as provided by the terms of the option agreement.
The 1993 Plan contains terms providing for the exercise of options by or on
behalf of former and deceased employees, respectively, as described below.
Non-Assignability of Option. Only the optionee may exercise an option; no
assignment or transfers are permitted except by will or by the laws of descent
and distribution.
Termination of Option Rights. If an ISO optionee ceases to be employed by
the Company other than by reason of death or disability, no further installments
of his or her ISOs will become exercisable, and the ISOs shall terminate after
the passage of 30 days from the date of termination of employment. If an
optionee is
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disabled, any ISO held by the optionee may be exercised, to the extent
exercisable on the date of disability, by the optionee at any time within one
year from the date of the optionee's disability. If an optionee dies, any ISO
held by the optionee may be exercised, to the extent exercisable on the date of
death, by the optionee at any time within eighteen (18) months following death
of the optionee by the optionee's estate or by persons to whom the optionee's
rights under such option pass by will or by the laws of descent and
distribution. Non-Qualified Options are subject to such termination and
cancellation provisions as may be determined by the Committee.
Changes in Capitalization and Other Matters. Option holders are protected
against dilution in the event of a stock dividend, recapitalization, stock
split, merger or similar transaction. The Board of Directors may from time to
time adopt amendments to the 1993 Plan, certain of which are subject to
stockholder approval, and may terminate the 1993 Plan, at any time (although
such action shall not affect options previously granted). Any shares subject to
an option granted under the 1993 Plan, which for any reason expire or terminate
unexercised, may again be available for future option grants. Unless terminated
sooner, the 1993 Plan will terminate on June 10, 2003, and options may be
granted under the 1993 Plan at any time prior to this date.
Federal Tax Considerations
The following general rules are applicable under current federal income tax
law to ISOs under the 1993 Plan:
1. In general, no taxable income results to the optionee upon the
grant of an ISO or upon the issuance of shares to him or her upon the
exercise of the ISO, and no tax deduction is allowed to the Company upon
either grant or exercise of an ISO.
2. If shares acquired upon exercise of an ISO are not disposed of
within (i) two years following the date the option was granted or (ii) one
year following the date the shares are issued to the optionee pursuant to
the ISO exercise, the difference between the amount realized on any
subsequent disposition of the shares and the exercise price will generally
be treated as capital gain or loss to the optionee.
3. If shares acquired upon exercise of an ISO are disposed of before
the expiration of one or both of the requisite holding periods (a
"Disqualifying Disposition"), then in most cases the lesser or (i) any
excess of the fair-market value of the shares at the time of exercise of
the ISO over the exercise price or (ii) the actual gain on disposition will
be treated as compensation to the optionee and will be taxed as ordinary
income in the year of such disposition.
4. In any year that an optionee recognizes compensation income on a
Disqualifying Disposition of stock acquired by exercising an ISO, the
Company generally should be entitled to a corresponding deduction for
income tax purposes.
5. Any excess of the amount realized by the optionee as the result of
a Disqualifying Disposition over the sum of (i) the exercise price and (ii)
the amount of ordinary income recognized under the above rules will be
treated as capital gain.
6. Capital gain or loss recognized on a disposition of shares will be
long-term capital gain or loss if the optionee's holding period for the
shares exceeds one year.
7. An optionee may be entitled to exercise an ISO by delivering shares
of the Company's Common Stock to the Company in payment of the exercise
price, if the optionee's ISO agreement so provides. If an optionee
exercises an ISO in such a manner, special rules will apply.
8. In addition to the tax consequences described above, the exercise
of ISOs may result in a further "minimum tax" under the Code. The Code
provides that an "alternative minimum tax" (at a rate of 26% or 28%) will
be applied against a taxable base which is equal to "alternative minimum
taxable income," reduced by a statutory exemption. In general, the amount
by which the value of the Common Stock received upon exercise of the ISO
exceeds the exercise price is included in the optionee's alternative
minimum taxable income. A taxpayer is required to pay the higher of his
regular tax liability or the alternative
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minimum tax. A taxpayer who pays alternative minimum tax attributable to
the exercise of an ISO may be entitled to a tax credit against his or her
regular tax liability in later years.
The following general rules are applicable under current federal income tax
law to Non-Qualified Options under the 1993 Plan:
1. The optionee generally does not realize any taxable income upon the
grant of an option, and the Company is not allowed a business expense
deduction by reason of such grant.
2. The optionee generally will recognize ordinary compensation income
at the time of exercise of the option in an amount equal to the excess, if
any, of the fair-market value of the shares on the date of exercise over
the exercise price.
3. When the optionee sells the shares, he or she generally will
recognize a capital gain or loss in an amount equal to the difference
between the amount realized upon the sale of the shares and his or her
basis in the stock (generally, the exercise price plus the amount taxed to
the optionee as compensation income). If the optionee's holding period for
the shares exceeds one year, such gain or loss will be a long-term capital
gain or loss.
4. The Company generally should be entitled to a tax deduction when
compensation income is recognized by the optionee.
5. An optionee may be entitled to exercise a non-qualified option by
delivering shares of the Company's Common Stock to the Company in payment
of the exercise price. If an optionee exercises a non-qualified option in
such fashion, special rules will apply.
PROPOSAL NO. 4
RATIFICATION OF SELECTION OF AUDITORS
The Board of Directors has selected the firm of Wolf & Company, P.C.,
independent certified public accountants, to serve as auditors for the fiscal
year ending September 30, 1999. Wolf & Company, P.C. has acted as the Company's
independent auditor since the Company's inception. It is expected that a member
of Wolf & Company, P.C. will be present at the Meeting with the opportunity to
make a statement if so desired and will be available to respond to appropriate
questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF ITS SELECTION
OF WOLF & COMPANY, P.C. AS INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING
SEPTEMBER 30, 1999.
TRANSACTION OF OTHER BUSINESS
The Board of Directors of the Company 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 the Company's 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 the
principal executive offices of the Company
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(containing certain information specified in the By-laws) (i) not less 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.
The 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 the principal
executive offices of the Company (containing certain information specified in
the By-laws) (i) not less 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 the Company's 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 Clerk of the Company at GreenMan Technologies,
Inc., 7 Kimball Lane, Building A, Lynnfield, MA 01940.
STOCKHOLDER PROPOSALS
Proposals of stockholders intended for inclusion in the proxy statement to
be mailed to all stockholders entitled to vote at the next annual meeting of
stockholders of the Company must be received at the Company's principal
executive offices not later than November 4, 1999. In order to curtail
controversy as to the date on which a proposal was received by the Company, 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 the Company, and in
addition to directly soliciting stockholders by mail, the Company may request
banks and brokers to solicit their customers who have stock of the Company
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 officers and
employees of the Company may be made of some stockholders in person or by mail
or telephone.
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EXHIBIT I
Text of Proposed Amendment
to the
Certificate of Incorporation
to
Increase Authorized Stock
RESOLVED: That the Certificate of Incorporation of the Corporation be amended by
deleting Article Fourth of the Certificate of Incorporation in its
present form and substituting therefor a new Article Fourth in the
following form:
"FOURTH. This corporation is authorized to issue two classes of stock,
to be designated, respectively, "Common Stock" and "Preferred Stock." The
total number of shares this corporation is authorized to issue is Fifty-One
Million (51,000,000) shares of capital stock.
Of such authorized shares, Fifty Million (50,000,000) shares shall be
designated "Common Stock" and have a par value of $0.01 per share. One Million
(1,000,000) shares shall be designated "Preferred Stock" and have a par value of
$1.00 per share.
A. COMMON STOCK
1. General. The voting, dividend and liquidation rights of the holders of
the Common Stock are subject to and qualified by the rights of the holders of
the Preferred Stock of any series as may be designated by this Board of
Directors upon any issuance of the Preferred Stock of any series.
2. Voting. The holders of the Common Stock are entitled to one vote for
each share held at all meetings of stockholders (and written actions in lieu of
meetings). There shall be no cumulative voting.
3. Dividends. Dividends may be declared and paid on the Common Stock from
funds lawfully available therefor as and when determined by the Board of
Directors and subject to any preferential dividend rights of any then
outstanding Preferred Stock.
4. Liquidation. Upon the dissolution or liquidation of the Corporation,
whether voluntary or involuntary, holders of Common Stock will be entitled to
receive all assets of the Corporation available for distribution to its
stockholders, subject to any preferential rights of any then outstanding
Preferred Stock.
B. PREFERRED STOCK
Preferred Stock may be issued from time to time in one or more series, each
of such series to have such terms as stated or expressed herein and in the
resolution or resolutions providing for the issue of such series adopted by the
Board of Directors of the Corporation as hereinafter provided. Any shares of
Preferred Stock which may be redeemed, purchased or acquired by the Corporation
may be reissued except as otherwise provided by law. Different series of
Preferred Stock shall not be construed to constitute different classes of shares
for the purpose of voting by classes unless expressly provided.
Authority is hereby expressly granted to the Board of Directors from time
to time to issue the Preferred Stock in one or more series and in connection
with the creation of any such series, by resolution or resolutions providing for
the issue of the shares thereof, to determine and fix such voting powers, full
or limited, or no voting powers, and such designations, preferences and relative
participating, optional or other special rights, and qualifications, limitations
or restrictions thereof, including without limitation thereof, dividend rights,
conversion rights, redemption privileges and liquidation preferences, as shall
be stated and expressed in such resolutions, all to the full extent now or
hereafter permitted by the General Corporation Law of Delaware. Without limiting
the generality of the foregoing, the resolutions providing for issuance of any
series of Preferred Stock may provide that such series shall be superior or rank
equally or be junior to the Preferred Stock of any other series to the extent
permitted by law. No vote of the holders of the Preferred Stock or Common Stock
shall be a prerequisite to the issuance of any shares of any series of the
Preferred Stock authorized by and complying with the conditions of the
Certificate of Incorporation, the right to have such vote being expressly waived
by all present and future holders of the capital stock of the Corporation.
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