SCHEDULE 14A
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GREENMAN TECHNOLOGIES, INC.
7 Kimball Lane, Building A
Lynnfield, Massachusetts 01940
(781) 224-2411
NOTICE OF ANNUAL
MEETING OF STOCKHOLDERS
To Be Held April 21, 2004
TO OUR
STOCKHOLDERS:
The Annual Meeting of Stockholders (the "Meeting") of GreenMan
Technologies, Inc. (together with its subsidiaries, "we", "us" or "our"), a
Delaware corporation, will be held on Wednesday, April 21, 2004, at 9:30 A.M.,
in the Reading Room at the Sheraton Colonial Hotel, One Audubon Road, Wakefield,
Massachusetts, 01880 for the following purposes:
1. To elect five members of our Board of Directors.
2. To consider and act upon a proposal to ratify the selection of the
firm of Wolf & Company, P.C. as independent auditors for the fiscal
year ending September 30, 2004.
3. To transact such other business as may properly come before the
meeting and any adjournments thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only stockholders of record at the close of business on February 17, 2004
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 25, 2004
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING. WHETHER OR NOT
YOU PLAN TO ATTEND THE MEETING, PLEASE SIGN THE ENCLOSED PROXY CARD AND RETURN
IT PROMPTLY IN THE ENCLOSED STAMPED ENVELOPE.
GREENMAN TECHNOLOGIES, INC.
7 Kimball Lane, Building A
Lynnfield, Massachusetts 01940
(781) 224-2411
PROXY STATEMENT
March 25, 2004
Proxies in the form enclosed with this proxy statement are solicited by
our Board of Directors (the "Board of Directors") at our expense for use at the
Annual Meeting of Stockholders (the "Meeting") to be held on Wednesday, April
21, 2004 in the Reading Room at the Sheraton Colonial Hotel, One Audubon Road,
Wakefield, Massachusetts, 01880.
Only stockholders of record as of February 17, 2004 will be entitled to
vote at the Meeting and any adjournments thereof. As of that date, 16,815,348
shares of our common stock, par value $.01 per share, were issued and
outstanding. The holders of our common stock are entitled to one vote per share
on any proposal presented at the Meeting. Stockholders may vote in person or by
proxy.
Execution of a proxy will not in any way affect a stockholder's right to
attend the Meeting and vote in person. Any stockholder giving a proxy has the
right to revoke it at any time before it is exercised by attending the Meeting
and voting in person or filing with our Secretary either a written instrument
revoking the proxy or another executed proxy bearing a later date.
All properly executed proxies returned in time to be counted at the
Meeting will be voted. With respect to the election of our Board of Directors,
shares represented by proxies will be voted as stated below under "Election of
Directors." Any stockholder submitting a proxy has the right to withhold
authority to vote for any individual nominee to the Board of Directors by
writing that nominee's name on the space provided on the proxy. In addition to
the election of Directors, the stockholders will consider and vote upon a
proposal to ratify the selection of Wolf & Company, P.C. as our independent
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 a majority of the outstanding
shares of our common stock entitled to vote at the Meeting is necessary to
establish a quorum for the transaction of business. Votes withheld from any
nominee, abstentions and broker non-votes are counted as present or represented
for purposes of determining the presence or absence of a quorum. A "non-vote"
occurs when a broker holding shares for a beneficial owner votes on one
proposal, but does not vote on another proposal because the broker does not have
discretionary voting power and has not received instructions from the beneficial
owner. Directors are elected by a plurality of the votes cast by stockholders
entitled to vote at the Meeting. The ratification of the selection of Wolf &
Company, P.C. as our independent auditors requires the affirmative vote of the
majority of shares present in person or represented by proxy at the Meeting. An
automated system administered by our transfer agent tabulates the votes. The
vote on each matter submitted to stockholders is tabulated separately.
Abstentions are included in the number of shares present or represented and
voting on each matter.
The Board of Directors knows of no other matter to be presented at the
Meeting. If any other matter should be presented at the Meeting upon which a
vote properly may be taken, shares represented by all proxies received by us
will be voted with respect thereto in accordance with the judgment of the
persons named as attorneys in the proxies.
Our Annual Report, containing financial statements for fiscal year ended
September 30, 2003, 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 March 25, 2004.
2
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding beneficial
ownership of our common stock as of February 17, 2004:
o by each person (including any "group" as used in Section 13(d) of the
Securities Exchange Act of 1934) who is known by us to own beneficially 5%
or more of the outstanding shares of common stock;
o by each of our directors and officers; and
o by all of our directors and officers as a group.
Unless otherwise indicated below, to the best of our knowledge, all
persons listed below have sole voting and investment power with respect to their
shares of common stock, except to the extent authority is shared by spouses
under applicable law. As of February 17, 2004, 16,815,348 shares of our common
stock were issued and outstanding.
SECURITY OWNERSHIP OF MANAGEMENT AND DIRECTORS
Number of Shares Percentage of
Name (1) Beneficially Owned (2) Class (2)
-------- ---------------------- ---------
Dr. Allen Kahn (3) ..................... 2,941,372 17.48 %
Maurice E. Needham (4) ................. 1,826,251 10.33 %
Robert H. Davis (5) .................... 1,276,200 7.26 %
Charles E. Coppa (6) ................... 638,427 3.73 %
Mark T. Maust (7) ...................... 467,736 2.74 %
Lew F. Boyd (8) ........................ 364,588 2.15 %
Lyle Jensen (9) ........................ 7,800 *
All officers and directors as a group
(7 persons) ........................ 7,522,374 39.25 %
* Less than 1%
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Number of Shares Percentage of
Beneficially Owned Class
------------------ -----
Richard Ledet (10)...................... 1,950,400 11.60 %
(1) Except as noted, each person's address is care of GreenMan Technologies,
Inc., 7 Kimball Lane, Building A, Lynnfield, Massachusetts 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 10,500 shares of common stock issuable pursuant to immediately
exercisable stock options.
(4) Includes 869,000 shares of common stock issuable pursuant to immediately
exercisable stock options. Also includes 59,556 shares of common stock
owned by Mr. Needham's wife.
(5) Includes 757,500 shares of common stock issuable pursuant to immediately
exercisable stock options.
(6) Includes 305,500 shares of common stock issuable pursuant to immediately
exercisable stock options.
(7) Includes 276,500 shares of common stock issuable pursuant to immediately
exercisable stock options.
(8) Includes 124,394 shares of common stock issuable pursuant to immediately
exercisable stock options.
(9) Includes 7,500 shares of common stock issuable pursuant to immediately
exercisable stock options.
(10) Mr. Ledet's address is 2960 NE Broadway, Des Moines, Iowa 50317.
3
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Pursuant to Proposal No. 1, the five nominees listed below will be
nominated to serve until the next Annual Meeting of Stockholders and until their
successors are elected. Officers are elected by and serve at the discretion of
the Board of Directors, subject to their employment contracts.
Shares represented by all proxies received by the Board of Directors and
not so marked to withhold authority to vote for any individual nominee will be
voted (unless one or more nominees are unable or unwilling to serve) FOR the
election of all nominees. The Board of Directors knows of no reason why any such
nominees should be unable or unwilling to serve, but if such should be the case,
proxies may be voted for the election of some other person or for fixing the
number of directors at a lesser number.
The following information is set forth with respect to each nominee for election
as a director.
Year Term
Nominee's Name Position(s) Held Will Expire
-------------- ---------------- -----------
Maurice E. Needham .................... Chairman of the Board 2005
Robert H. Davis ....................... Chief Executive Officer, 2005
President and Director
Lew F. Boyd ........................... Director 2005
Allen Kahn, M.D ....................... Director 2005
Lyle Jensen ........................... Director 2005
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE NOMINEES LISTED ABOVE.
OCCUPATIONS OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth all of the candidates for election of
directors at the Meeting, and our executive officers, their ages, and the
positions held by each such person within our company.
Our directors and executive officers are as follows:
Name Age Position
---- --- --------
Maurice E. Needham ............ 63 Chairman of the Board of Directors
Robert H. Davis ............... 61 Chief Executive Officer; President;
Director
Charles E. Coppa .............. 40 Chief Financial Officer; Treasurer;
Secretary
Mark T. Maust ................. 45 Vice President of Operations
Dr. Allen Kahn ................ 83 Director
Lew F. Boyd ................... 58 Director
Lyle Jensen ................... 53 Director
We have established an Audit Committee consisting of Messrs. Jensen
(Chair) and Boyd and Dr. Kahn, and a Compensation Committee consisting of
Messrs. Boyd (Chair) and Jensen. Our Board of Directors has determined that Mr.
Jensen is an "audit committee financial expert" within the meaning given that
term by Item 401(e) of Regulation S-B and that Mr. Jensen is "independent"
within the meaning given to that term by Item 7(d)(3)(iv) of Schedule 14A under
the Exchange Act.
MAURICE E. NEEDHAM has been Chairman since June 1993. From June 1993 to
July 21, 1997, Mr. Needham also served as Chief Executive Officer. He has also
served as a Director of Comtel Holdings, an electronics contract manufacturer,
since April 1999. He previously served as Chairman of Dynaco Corporation, a
manufacturer of electronic components which he founded in 1987. Prior to 1987,
Mr. Needham spent 17 years at Hadco Corporation, a manufacturer of electronic
components, where he served as President, Chief Operating Officer and Director.
ROBERT H. DAVIS has been Chief Executive Officer and a Director since July
1997. Prior to joining us, 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 in profitable revenues. 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. Mr. Davis
currently serves as a Director and Audit Committee member of Waste Connections,
Inc., the fourth largest solid waste management company in the United States.
4
CHARLES E. COPPA has served as Chief Financial Officer, Treasurer and
Secretary since March 1998. From October 1995 to March 1998, he served as
Corporate Controller. Mr. Coppa was Chief Financial Officer and Treasurer of
Food Integrated Technologies, a publicly-traded development stage company, from
July 1994 to October 1995. Prior to joining Food Integrated Technologies, Inc.,
Mr. Coppa served as Corporate Controller for Boston Pacific Medical, Inc., a
manufacturer and distributor of disposable medical products, and Corporate
Controller for Avatar Technologies, Inc., a computer networking company.
MARK T. MAUST has been Vice President of Operations since July 2000 and
Vice President of our Minnesota subsidiary since July 1997. Prior to joining us,
Mr. Maust served as Vice President for BFI Tire Recyclers of Minnesota, Inc.
from July 1991 to June 1997. Mr. Maust was Vice President of Maust Tire
Recycling from 1988 to 1991, when the business was sold to BFI and he joined BFI
as a Vice President.
ALLEN KAHN, M.D., has been a Director since March 2000. Dr. Kahn operated
a private medical practice in Chicago, Illinois, which he founded in 1953 until
his retirement in October 2002. Dr. Kahn has been actively involved as an
investor in "concept companies" since 1960. From 1965 through 1995 Dr. Kahn
served as a member of the Board of Directors of Nease Chemical Company
(currently German Chemical Company), Hollymatic Corporation and Pay Fone Systems
(currently Pay Chex, Inc.).
LEW F. BOYD has been a Director since August 1994. Mr. Boyd is the founder
and since 1985 has been the Chief Executive Officer of Coastal International,
Inc., an international business development and executive search firm,
specializing in the energy and environmental sectors. Previously, Mr. Boyd had
been Vice President/General Manager of the Renewable Energy Division of Butler
Manufacturing Corporation and had served in academic administration at Harvard
and Massachusetts Institute of Technology.
LYLE JENSEN has been a Director since May 2002. Mr. Jensen is currently a
Business Development and Operations Consultant. Prior to that he held executive
roles as Chief Executive Officer and minority owner of Comtel and Corlund
Electronics, Inc. He served as President of Dynaco Corporation from 1988 to
1997, General Manager of Interconics from 1984 to 1988 and various financial and
general management roles within Rockwell International from 1973 to 1984.
Code of Ethics
We have not yet adopted a code of ethics that applies to our principal
executive officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions. We are in the process of
preparing and adopting a code of ethics, which will be posted on our corporate
website.
Board Meetings
Our Board of Directors met six times during the fiscal year ended
September 30, 2003. None of the directors attended fewer than 75% of the
meetings held during the period. There were no actions taken by unanimous
consent in lieu of a meeting during the fiscal year ended September 30, 2003.
Committees of the Board of Directors
Our Board of Directors has established an Audit Committee and a
Compensation Committee.
1. Audit Committee: The Audit Committee of the Board of Directors acts
to: (i) acquire a complete understanding of our audit functions;
(ii) review with management and our independent accountants our
finances, financial condition and interim financial statements;
(iii) review with the independent accountants our year-end financial
statements; and (iv) review implementation with the independent
accountants and management any action recommended by our independent
accountants. The Audit Committee met four times during the fiscal
year ended September 30, 2003. None of the members of the Audit
Committee attended fewer than 75% of the meetings held during the
period.
The Audit Committee adopted a written charter governing its actions
on June 1, 2000. The three members of the Audit Committee are
"independent" within the definition of that term as provided by
Section 121(A) of the listing standards of the American Stock
Exchange.
Report of the Audit Committee
The Audit Committee has reviewed and discussed our audited
consolidated balance sheets and statements of operations, cash flows
and stockholders' equity for the fiscal years ended September 30,
2003 and 2002 with management. The Audit Committee has discussed
with Wolf & Company, P.C., our independent auditors, the matters
required to be discussed by Statement of Auditing Standards No. 61.
5
The Audit Committee has also received and reviewed written
disclosures and the letter from Wolf & Company, P.C. required by
Independent Standards Board No. 1 and has discussed with Wolf &
Company, P.C. their independence. Based on the foregoing review and
discussions, the Audit Committee recommended to the Board of
Directors that the audited financial statements be included in our
Annual Report on Form 10-KSB for the fiscal year ended September 30,
2003 for filing with the Securities and Exchange Commission.
AUDIT COMMITTEE
Lyle Jensen Lew Boyd Dr. Allen Kahn
2. Compensation Committee: The Compensation Committee of the Board of
Directors sets the compensation of the Chief Executive Officer and
reviews and approves the compensation arrangements for all other
officers. The Compensation Committee met four times during the
fiscal year ended September 30, 2003. None of the members of the
Compensation Committee attended fewer than 75% of the meetings held
during the period.
Our Board of Directors has not established a nominating committee. Our
Board believes that each of the five current members should, and does,
participate in the consideration of director nominees. In accordance with
Section 804 of the American Stock Exchange's Company Guide, our independent
directors recommend nominees for selection as directors by the full Board. The
policy of our Board is to consider director candidates recommended by our
stockholders. Stockholders wishing to nominate director candidates must comply
with certain procedures and notice requirements set forth in our By-Laws.
Nominations must be submitted in writing to our principal executive office on a
timely basis and must contain certain information set forth in our By-Laws. See
"Advance Notice Procedures" below. Our Board has not established a formal
charter regarding the nomination and consideration of director candidates. We
expect to establish a Nominating Committee, and a charter governing its
operations, in fiscal 2004. When adopted, the charter will be posted on our
corporate website.
Stockholders may communicate directly with members of our Board of
Directors by sending a letter or other written communication to The Chairman of
the Board (or, if applicable to an individual director by name), in care of the
Corporate Secretary, GreenMan Technologies, Inc., 7 Kimball Lane, Building A,
Lynnfield, MA 01940. Our current policy is to forward all communications to the
Chairman of the Board or the individually named director, if applicable, but we
reserve the right to modify that policy in the future.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
Executive Compensation
The following table summarizes the compensation paid or accrued for
services rendered during the fiscal years ended September 30, 2003, 2002 and
2001, to our Chief Executive Officer, our Vice President of Operations and our
Chief Financial Officer. We did not grant any restricted stock awards or stock
appreciation rights or make any long-term plan payouts during the periods
indicated.
SUMMARY COMPENSATION TABLE
Long-Term
Compensation
Annual Compensation Securities
Name and Fiscal -------------------- Other Annual Underlying All Other
Principal Position Year Salary Bonus Compensation (1) Options (2) Compensation (3)
------------------ ---- ------ ----- ---------------- ----------- ----------------
Robert H. Davis ............. 2003 $230,000 $ -- $19,900 -- $ --
Chief Executive Officer 2002 230,000 23,000 16,817 7,500 --
2001 230,000 44,000 15,586 25,000 5,813
Mark T. Maust ............... 2003 $140,000 $ -- $18,908 -- $ --
Vice President 2002 140,000 70,000 17,278 7,500 --
2001 140,000 70,000 17,074 25,000 5,813
Charles E. Coppa ............ 2003 $130,000 $ -- $ 9,343 -- $ --
Chief Financial Officer 2002 130,000 5,000 7,200 7,500 --
2001 130,000 20,000 7,200 50,000 5,813
6
(1) Represents payments made to or on behalf of Messrs. Davis, Maust and Coppa
for health and life insurance and auto allowances.
(2) The fiscal 2002 grants represent options granted to Mr. Davis, Mr. Maust
and Mr. Coppa in August 2002. The fiscal 2001 grants represent options
granted in January 2001 to Mr. Davis, Mr. Maust and Mr. Coppa.
(3) Represents the value assigned to 19,375 shares of our unregistered common
stock granted to each of Messrs. Davis, Maust and Coppa for prior services
rendered.
Options/SAR Grants Table
We did not grant any stock options or other equity during the fiscal year
ended September 30, 2003 to the executives named in the Summary Compensation
Table above.
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option
Values
The following table sets forth information concerning the value of
unexercised options as of September 30, 2003 held by the executives named in the
Summary Compensation Table above.
Value of Unexercised
Number of Unexercised In-the-Money Options
Shares Options at September 30, 2003 (3) at September 30, 2003 (2)
Acquired on Value --------------------------------- ----------------------------
Name Exercise (1) Realized (2) Exercisable Unexercisable Exercisable Unexercisable
---- ------------ ------------ ----------- ------------- ----------- -------------
Robert H. Davis ........... 103,000 $119,940 944,500 273,500 $441,430 $257,830
Mark T. Maust ............. -- -- 166,000 166,500 $208,550 $112,500
Charles E. Coppa .......... -- -- 214,000 173,500 $242,720 $124,880
(1) During the fiscal year ended September 30, 2003, Mr. Davis exercised
103,000 options at exercise prices ranging from $.40 to $.53 per share.
(2) Assumes that the value of shares of common stock is equal to $1.66 per
share, which was the closing bid price on the American Stock Exchange on
September 30, 2003.
(3) The options granted to the executive officers became exercisable
commencing July 17, 1998 in the case of Mr. Davis, December 30, 1997 in
the case of Mr. Maust and March 23, 1999 in the case of Mr. Coppa at an
annual rate of 20% of the underlying shares of our common stock. The
options granted to Mr. Davis pursuant to his April 1999 employment
agreement vest over a seven-year period.
Employment Agreements
In April 1999, we entered into a three-year employment agreement with Mr.
Davis pursuant to which Mr. Davis receives a salary of $230,000 per annum with
an additional $50,000 of deferred compensation in the first year. The agreement
automatically renews for three additional years upon each anniversary, unless
notice of non-renewal is given by either party, and provides for payment of
twelve months salary as a severance payment for termination without cause. Any
increases will be made at the discretion of our Board of Directors upon the
recommendation of the Compensation Committee. The agreement also provides for
Mr. Davis to receive incentive compensation based on the following formula:
Consolidated Net Income Incentive Cumulative
Before Income Taxes Compensation Rate Maximum
-------------------- ----------------- -------
$0 - $1,000,000 5% $ 50,000
$1,000,001 - $2,000,000 7.5% 125,000
$2,000,001+ 2.5% 125,000+
No bonus was payable for fiscal 2003. Based upon our fiscal 2002
performance, Mr. Davis chose to accept a reduced bonus amount of $23,000.
In June 1999, we entered into a two-year employment agreement with Mr.
Coppa pursuant to which Mr. Coppa currently receives a salary of $130,000 per
annum. The agreement automatically renews for two additional years upon each
anniversary, unless notice of non-renewal is given by either party. Any
increases or bonuses will be made at the discretion of our Board of Directors
upon the recommendation of the Compensation Committee. The agreement provides
for payment of twelve months salary as a severance payment for termination
without cause.
7
In June 2003, we entered into a three-year employment agreement with Mr.
Needham pursuant to which Mr. Needham will receive a salary of $90,000 per
annum. The agreement automatically renews for three additional years upon each
anniversary, unless notice of non-renewal is given by either party. Any
increases or bonuses will be made at the discretion of our Board of Directors
upon the recommendation of the Compensation Committee. The agreement provides
for payment of twelve months salary as a severance payment for termination
without cause.
Stock Option Plan
Our 1993 Stock Option Plan, was established to provide options to purchase
shares of common stock to our employees, officers, directors and consultants. In
March 2001, our stockholders approved an increase to the number of shares
authorized under the 1993 Stock Option Plan to 3,000,000 shares.
Options granted under the 1993 Stock Option Plan may be either options
intended to qualify as "incentive stock options" under Section 422 of the
Internal Revenue Code of 1986, as amended; or non-qualified stock options.
Incentive stock options may be granted under the 1993 Stock Option Plan to
employees, including officers and directors who are employees. Non-qualified
options may be granted to our employees, directors and consultants.
The 1993 Stock Option Plan is administered by our Board of Directors,
which has the authority to determine:
o the persons to whom options will be granted;
o the number of shares to be covered by each option;
o whether the options granted are intended to be incentive stock
options;
o the manner of exercise; and
o the time, manner and form of payment upon exercise of an option.
Incentive stock options granted under the 1993 Stock Option Plan may not
be granted at a price less than the fair market value of our common stock on the
date of grant (or less than 110% of fair market value in the case of persons
holding 10% or more of our voting stock). Non-qualified stock options may be
granted at an exercise price established by our Board which may not be less than
85% of fair market value of our shares on the date of grant. Incentive stock
options granted under the 1993 Stock Option Plan must expire no more than ten
years from the date of grant, and no more than five years from the date of grant
in the case of incentive stock options granted to an employee holding 10% or
more of our voting stock.
As of September 30, 2003, there were 1,983,894 options granted and
outstanding under the 1993 Stock Option Plan of which 1,533,094 options were
exercisable at prices ranging from $0.38 to $4.70.
Non-Employee Director Stock Option Plan
Our 1996 Non-Employee Director Stock Option Plan is intended to promote
our interests by providing an inducement to obtain and retain the services of
qualified persons who are not officers or employees to serve as members of our
Board of Directors. The Board of Directors has reserved 60,000 shares of common
stock for issuance under Non-Employee Director Stock Option Plan.
Each person who was a member of the Board of Directors on January 24,
1996, and who was not an officer or employee, was automatically granted an
option to purchase 2,000 shares of common stock. In addition, after an
individual's initial election to the Board of Directors, any director who is not
an officer or employee and who continues to serve as a director will
automatically be granted on the date of the Annual Meeting of Stockholders an
additional option to purchase 2,000 shares of common stock. The exercise price
per share of options granted under the Non-Employee Director Stock Option Plan
is 100% of the fair-market value of the common stock on the business day
immediately prior to the date of the grant and each option is immediately
exercisable for a period of ten years from the date of the grant.
As of September 30, 2003,options to purchase 26,000 shares of our common
stock have been granted under the 1996 Non-Employee Director Stock Option Plan,
of which 16,000 are outstanding and exercisable at prices ranging from $0.38 to
$1.95.
Employee Benefit Plan
In August 1999, we implemented a Section 401(k) plan for all eligible
employees. Employees are permitted to make elective deferrals of up to 15% of
employee compensation and employee contributions to the 401(k) plan are fully
vested at all times. We may make discretionary contributions to the 401(k) plan
which become vested over a period of
8
five years. We did not make any discretionary contributions to the 401(k) plan
during the fiscal years ended September 30, 2003 and 2002.
Loans; Personal Guarantees
In January 1998, we advanced Mr. Davis $104,000 under an 8.5% secured loan
agreement with both principal and interest due January 2001. This agreement was
amended on September 30, 2000 to extend the maturity of the note until April 15,
2002 and increase the interest rate to 9.5%. In September 2001, we agreed to
extend the maturity date to April 15, 2004. As of September 30, 2003, the
outstanding balance on this note amounted to approximately $158,100, including
accrued interest.
In January 1999, we advanced Messrs. Davis and Coppa a total of $55,000
under 8.5% secured loan agreements with both principal and interest due January
2002 (subsequently extended to April 15, 2004). The proceeds were used to
participate in a private placement of our common stock and the loans are secured
by 191,637 shares of common stock owned by the two officers. In June 2002,
Messrs. Davis and Coppa each repaid $5,000 of their respective then outstanding
balances. As of September 30, 2003, the outstanding balance on these notes
amounted to approximately $66,800, including accrued interest, of which $45,000
is classified as an offset to stockholders' equity.
Messrs. Needham, Davis and Coppa have personally guaranteed a $1.1 million
note payable issued to Cryopolymers Leasing Inc. in May 1999.
Dr. Kahn loaned us $300,000 under the terms of an October 1999 private
offering of 10% convertible notes and warrants and $75,000 under a February 2000
private offering of 11% convertible notes and warrants. The entire principal
balance was outstanding as of September 30, 2003. The warrants are exercisable
for a period of five years to purchase 125,000 shares of our common stock at
exercise prices ranging from $.31 to $.50 per share. Dr. Kahn has been granted
limited registration rights to cause us to register for resale the common stock
underlying the warrants in the event that we register shares of common stock for
our own account. The original maturity date of the convertible notes was twelve
months after issuance and they are payable in cash or unregistered shares of our
common stock at a conversion price of $1.00 per share. In September 2000 and
June 2001, Dr. Kahn agreed to extend the maturity date of his notes for an
additional twelve months from their original maturity. In return for the June
2001 extension, we agreed to reduce the conversion price to $.75 per share. In
September 2002, Dr. Kahn again agreed to extend the maturity of each note for an
additional twenty-four months from their extended maturity dates with no change
in existing terms.
Dr. Kahn has also loaned us $200,000 under the terms of a November 2000
unsecured promissory note which bears interest at 12% per annum with interest
due monthly and the principal due in November 2001. In June 2001, Dr. Kahn
agreed to extend the maturity date of the note for an additional twelve months
from its original maturity. In September 2002, Dr. Kahn again agreed to extend
the maturity of the note until November 2004.
In September 2003, Mr. Davis loaned us $400,000 under the terms of a
September 30, 2003 unsecured promissory note which bears interest at 12% per
annum with interest due quarterly and the principal due March 31, 2004.
During the period of June to August 2003, two immediate family members of
Mr. Needham loaned us a total of $400,000 under the terms of two-year, unsecured
promissory notes which bear interest at 12% per annum with interest due
quarterly and the principal due upon maturity.
Related Party Transactions
We rent several pieces of equipment on a monthly basis from Valley View
Farms, Inc., a company co-owned by Mr. Maust. Rent expense associated with
payments made to Valley View Farms for the fiscal years ended September 30, 2003
and 2002 was $279,443 and $355,040, respectively.
In July 2002, our Minnesota subsidiary entered into a four-year equipment
lease with Valley View Farms. Under the terms of the lease, the subsidiary is
required to pay rent of $4,394 per month and has the ability to purchase the
equipment at the end of the lease at approximately 40% of its original value.
The lease is classified as a capital lease at September 30, 2003 with an
equipment value of $146,670.
In September 1999, our Georgia subsidiary entered into a five-year
equipment lease with Valley View Farms. Under the terms of the lease, the
subsidiary was required to pay rent of $6,421 per month and had the ability to
apply 85% of all payments made towards the purchase of the equipment at the end
of the lease. In August 2002 the subsidiary exercised its option to acquire the
equipment.
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Our majority-owned joint venture, Able Tire of Oklahoma, LLC, which we
divested in April 2003, leased on a month-to-month basis certain rolling stock
equipment from Gary Humphreys, an owner of Able Tire Company, LLC, the other
member of the joint venture. Payments made to Mr. Humphreys totaled $48,700 and
$45,100 during the fiscal years ended September 30, 2003 and 2002, respectively.
Able Tire of Oklahoma, LLC also purchased certain operating equipment from
Green Tree Resorts, a company partly owned by Mr. Humphreys, for $10,500 during
the fiscal year ended September 30, 2002.
In April 2003, our Iowa subsidiary entered into a ten-year lease agreement
with Maust Asset Management Company, LLC ("Maust Asset Management") for our Iowa
facility. Maust Asset Management is co-owned by one of our officers. Under the
terms of the lease, monthly rent payments of $8,250 are required for the first
five years, increasing to $9,000 per month for the remaining five years. The
lease also provides us a right of first refusal to purchase the land and
buildings at fair market value during the term of the lease. Maust Asset
Management acquired the property from the former lessor. For the fiscal year
ended September 30, 2003, payments made in connection with this lease amounted
to $41,250.
On September 30, 2003, Mart Management, Inc., our Georgia subsidiary's
landlord, loaned us $100,000 under the terms of a September 30, 2003 unsecured
promissory note which bears interest at 12% per annum with interest due
quarterly and the principal due September 30, 2004.
All transactions, including loans, between us and our officers, directors,
principal stockholders, and their affiliates are approved by a majority of the
independent and disinterested outside directors on the Board of Directors.
Management believes these transactions were consummated on terms no less
favorable to us than could be obtained from unaffiliated third parties.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires our directors and executive
officers, and persons who own more than 10% of our common stock, to file with
the Securities and Exchange Commission initial reports of ownership of our
common stock and other equity securities on Form 3 and reports of changes in
such ownership on Form 4 and Form 5. Officers, directors and 10% stockholders
are required by the Securities and Exchange Commission regulations to furnish us
with copies of all Section 16(a) forms they file.
To the best of management's knowledge, based solely on review of the
copies of such reports furnished to us during and with respect to, our most
recent fiscal year, and written representation that no other reports were
required, all Section 16(a) filing requirements applicable to our officers and
directors have been complied with.
PROPOSAL NO. 2
RATIFICATION OF SELECTION OF AUDITORS
Our 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, 2004. Wolf & Company, P.C. has acted as our
independent auditor since inception. Stockholder ratification of our independent
auditors is not required under Delaware law or under the our Certificate of
Incorporation or By-Laws. If the stockholders do not ratify the selection of
Wolf & Company, P.C. as our independent auditors for the fiscal year ending
September 30, 2004, our Board of Directors will evaluate what would be in the
best interests of our company and our stockholders and consider whether to
select new independent auditors for the current fiscal year or whether to wait
until the completion of the audit for the current fiscal year before changing
independent auditors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF ITS SELECTION
OF WOLF & COMPANY, P.C. AS INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING
SEPTEMBER 30, 2004.
INDEPENDENT PUBLIC ACCOUNTANTS
In addition to audit services, Wolf & Company, P.C. also provided certain
non-audit services to us during the fiscal year ended September 30, 2003. The
Audit Committee has considered whether the provision of these additional
services is compatible with maintaining the independence of Wolf & Company, P.C.
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Audit Fees. The aggregate fees billed for professional services rendered
by Wolf & Company, P.C. for (1) the audit of our financial statements as of and
for the fiscal year ended September 30, 2003 and (2) the review of the financial
statements included in the company's Form 10-QSB filings for fiscal 2003 were
$118,450. The aggregate fees billed for professional services rendered by Wolf &
Company, P.C. for (1) the audit of our financial statements as of and for the
fiscal year ended September 30, 2002 and (2) the review of the financial
statements included in the company's Form 10-QSB filings for fiscal 2002 were
$71,100.
Audit-Related Fees. The aggregate fees billed in fiscal 2003 and 2002 for
assurance and related services rendered by Wolf & Company, P.C. that are
reasonably related to the performance of the audit or review of our financial
statements, were $8,200 and $14,400, respectively. Services rendered in this
category consisted of (i) financial accounting and reporting consultations, and
(ii) participation in board and audit committee meetings and (iii) assurance
services on specific transactions.
Tax Fees. The aggregate fees billed in fiscal 2003 and 2002 for
professional services rendered by Wolf & Company, P.C. for tax compliance, tax
advice and tax planning, were $ 20,000 and $10,750, respectively.
All Other Fees. There were no fees billed in fiscal 2003 and 2002 for
products and services provided by Wolf & Company, P.C., other than services
reported above.
Pre-Approval Policies and Procedures. The Audit Committee has adopted
policies which provide that our independent auditors may only provide those
audit and non-audit services that have been pre-approved by the Audit Committee,
subject, with respect to non-audit services, to a de minimis exception
(discussed below) and to the following additional requirements: (1) such
services must not be prohibited under applicable federal securities rules and
regulations, and (2) the Audit Committee must make a determination that such
services would be consistent with the principles that the independent auditor
should not audit its own work, function as part of management, act as an
advocate of our company, or be a promoter of our company's stock or other
financial interests. The chairman of the Audit Committee has the authority to
grant pre-approvals of permitted non-audit services between meetings, provided
that any such pre-approval must be presented to the full Audit Committee at its
next scheduled meeting.
During fiscal 2003, all of the non-audit services provided by Wolf &
Company, P.C. were pre-approved by the Audit Committee. Accordingly, the Audit
Committee did not rely on the de minimis exception noted above. This exception
waives the pre-approval requirements for non-audit services if certain
conditions are satisfied, including, among others, that such services are
promptly brought to the attention of and approved by the Audit Committee prior
to the completion of the audit.
It is expected that a member of the firm 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.
TRANSACTION OF OTHER BUSINESS
Our Board of Directors knows of no other matters which may be brought
before the Meeting. If any other matters properly come before the Meeting, or
any adjournment thereof, it is the intention of the persons named in the
accompanying form of proxy to vote the proxy on such matters in accordance with
their best judgment.
ADVANCE NOTICE PROCEDURES
Under our By-laws, nominations for a director may be made only by the
Board of Directors, a committee appointed by the Board of Directors, or by a
stockholder of record entitled to vote on the election of directors, who is also
a stockholder at the record date of the meeting and also on the date of the
meeting at which directors are to be elected, who has delivered notice to our
principal executive offices (containing certain information specified in the
By-laws) (i) not fewer than 60 days nor more than 90 days prior to the
anniversary date of the preceding year's annual meeting, or (ii) if the meeting
is called for a date not within thirty days before or after such anniversary
date, not later than the close of business on the 10th day following the date
notice of such meeting is mailed or made public, whichever is earlier.
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Our By-laws also provide that no business may be brought before an annual
meeting of stockholders except as specified in the notice of the meeting or as
otherwise brought before the meeting by or at the direction of the Board of
Directors, the presiding officer or by a stockholder who shall have been a
stockholder of record on the record date for such meeting and who shall continue
to be entitled to vote thereafter, who has delivered notice to our principal
executive offices (containing certain information specified in the By-laws) (i)
not fewer than 60 days nor more than 90 days prior to the anniversary date of
the preceding year's annual meeting, or (ii) for a special meeting or an annual
meeting called for a date not within thirty days before or after such
anniversary date, not later than the close of business on the 10th day following
the date notice of such meeting is mailed or made public, whichever is earlier.
These requirements are separate and apart from and in addition to the
requirements that a stockholder must meet in order to have a stockholder
proposal included in our Proxy Statement under Rule 14a-8 of the Exchange Act. A
copy of the full text of the By-law provisions discussed above may be obtained
by writing to the Corporate Secretary, GreenMan Technologies, Inc., 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 our next annual meeting of
stockholders must be received at our principal executive offices not later than
November 25, 2004. In order to curtail controversy as to the date on which a
proposal was received by us, it is suggested that proponents submit their
proposals by Certified Mail Return Receipt Requested.
EXPENSES AND SOLICITATION
The cost of solicitation by proxies will be borne by us, in addition to
directly soliciting stockholders by mail, we may request banks and brokers to
solicit their customers who have our stock registered in the name of the nominee
and, if so, will reimburse such banks and brokers for their reasonable
out-of-pocket costs. Solicitation by our officers and employees may be made of
some stockholders in person or by mail or telephone.
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