UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy
Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed
by the Registrant
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Filed by a Party other than the Registrant
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Check the appropriate box:
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as
permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to §240.14a-12
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Plug
Power Inc.
(Name of Registrant as
Specified In Its Charter)
(Name of Person(s) Filing
Proxy Statement, if other than the Registrant)
Payment
of Filing Fee (Check the appropriate box):
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No fee required.
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Fee computed on table below per Exchange Act Rules
14a-6(i)(1) and 0-11.
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(1) Title of each class of securities to
which transaction applies:
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(2) Aggregate number of securities to
which transaction applies:
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(3) Per unit price or other underlying
value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth
the amount on which the filing fee is calculated and state how it was
determined):
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(4) Proposed maximum aggregate value of
transaction:
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(5) Total fee paid:
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as
provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date of its
filing.
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(1) Amount Previously Paid:
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(2) Form, Schedule or Registration
Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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IMPORTANT VOTING
INFORMATION
STOCKHOLDERS MAY REQUEST
ELECTRONIC DELIVERY OF PROXY DOCUMENTS.
The Company has made our
Annual Meeting materials available to Stockholders on the Internet via
www.proxyvote.com or via sendmaterial@proxyvote.com. Upon request,
printed versions or e-mail versions of these materials will be made available
to Stockholders through www.proxyvote.com, by telephoning 1-800-579-1639 or by
emailing sendmaterial@proxyvote.com. Further instructions to shareholders
can be found on the notice.
INFORMATION REGARDING
ADMISSION TO THE 2014 ANNUAL MEETING
In accordance with our security
procedures, all stockholders attending the 2014 Annual Meeting of Stockholders
must present valid picture identification upon entry.
1
PLUG POWER INC.
968
Albany Shaker Road
Latham,
NY 12110
June 12,
2014
Dear Stockholder:
You are cordially invited to attend the 2014 Annual
Meeting of Stockholders (the Annual Meeting) of Plug Power Inc., a Delaware
corporation (the Company), to be held on Wednesday, July 23, 2014, at 10:00
a.m., Eastern Time, at the offices of Goodwin Procter LLP, The New York Times
Building, 620 Eighth Avenue, New York, NY 10018.
The Annual Meeting has been called for the purpose of
(i) the election of two Class III Directors, each for a three-year term;
(ii) the approval of an amendment and restatement of the Companys 2011 Stock
Option and Incentive Plan as described in the accompanying proxy statement;
(iii) the approval of an amendment of the Companys Amended and Restated
Certificate of Incorporation to increase the number of authorized shares of
Common Stock by 205,000,000 shares; (iv) the
approval, on an advisory basis, of the compensation of the Corporations named
executive officers, as disclosed pursuant to Item 402 of Regulation S-K, in the
Compensation Discussion and Analysis section, compensation tables and narrative
discussion set forth in the accompanying proxy statement; (v) the
ratification of KPMG LLP as the Companys independent auditors for 2014; and (vi)
such other business as may properly come before the Annual Meeting and any
adjournments or postponements thereof.
The Board of Directors has fixed the close
of business on June 6, 2014, as the record date for determining stockholders
entitled to notice of, and to vote at, the Annual Meeting and any adjournments
or postponements thereof.
The Board of Directors of the Company recommends that
you
vote:
1.
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FOR the election of
the two nominees as Class III Directors of the Company as described in the
accompanying proxy statement;
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2.
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FOR the approval of
an Amendment and Restatement of the Companys 2011 Stock Option and Incentive
Plan as described in the accompanying proxy statement;
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3.
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FOR the approval of
the Third Certificate of Amendment of the Amended and Restated Certificate of
Incorporation of the Company to increase the number of authorized shares of
Common Stock by 205,000,000 shares.
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4.
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FOR the approval of
the advisory resolution regarding the compensation of the Companys named
executive officers as described in the accompanying proxy statement;
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5.
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FOR the
ratification of KPMG LLP as the Companys independent auditors for 2014.
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IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE
ANNUAL MEETING. WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE
CAREFULLY REVIEW THE PROXY MATERIALS AND THEN CAST YOUR VOTE, REGARDLESS OF THE
NUMBER OF SHARES YOU HOLD. IF YOU ARE A STOCKHOLDER OF RECORD YOU MAY VOTE OVER
THE INTERNET, BY TELEPHONE, OR BY REQUESTING A COPY OF THE PROXY MATERIALS BY
MAIL AND SIGNING, DATING AND MAILING THE ACCOMPANYING PROXY CARD IN THE RETURN
ENVELOPE, OR BY ATTENDING THE MEETING AND VOTING IN PERSON. IN ANY EVENT, TO BE
SURE THAT YOUR VOTE WILL BE RECEIVED IN TIME, PLEASE CAST YOUR VOTE BY YOUR
CHOICE OF AVAILABLE MEANS AT YOUR EARLIEST CONVENIENCE. IF YOU ATTEND THE
ANNUAL MEETING, YOU MAY VOTE IN PERSON IF YOU WISH, EVEN IF YOU HAVE PREVIOUSLY
VOTED BY PROXY.
2
Sincerely,
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Andrew
Marsh
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President
and Chief Executive Officer
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3
PLUG POWER INC.
968
Albany Shaker Road
Latham,
NY 12110
(518)
782-7700
NOTICE OF ANNUAL MEETING
OF STOCKHOLDERS
To Be Held on Wednesday,
July 23, 2014
NOTICE IS HEREBY GIVEN that the 2014
Annual Meeting of Stockholders of Plug Power Inc., a Delaware corporation (the
Company), will be held on Wednesday, July 23, 2014, at 10:00 a.m.
Eastern Time, at the offices of Goodwin Procter LLP, The New York Times
Building, 620 Eighth Avenue, New York, NY 10018 (the Annual Meeting) for the
purpose of considering and voting upon:
1.
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The election of two Class III Directors each to hold
office until the Companys 2017 Annual Meeting of Stockholders and until such
directors successor is duly elected and qualified or until such directors
earlier resignation or removal;
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2.
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To consider and approve an amendment and restatement
of the Companys 2011 Stock Option and Incentive Plan;
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3.
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To consider and approve the Third Certificate of
Amendment of the Amended and Restated Certificate of Incorporation of the
Company to increase the number of authorized shares of Common Stock by
205,000,000 shares;
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4.
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To consider and approve an advisory resolution
regarding the compensation of the Companys named executive officers;
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5.
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The ratification of KPMG LLP as the Companys
independent auditors for 2014; and
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6.
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Such other business as may properly come before the
Annual Meeting and any adjournments or postponements thereof.
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The Board of Directors has fixed the close of business
on June 6, 2014 as the record date for determination of stockholders entitled
to notice of, and to vote at, the Annual Meeting and any adjournments or
postponements thereof. Only holders of the Companys common stock of record at
the close of business on that date will be entitled to notice of, and to vote
at, the Annual Meeting and any adjournments or postponements thereof.
Any action may be taken on the foregoing matters at
the Annual Meeting on the date specified above, or on any date or dates to
which, by original or later postponement or adjournment, the Annual Meeting may
be postponed or adjourned.
By
Order of the Board of Directors
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Gerard
L. Conway, Jr.
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Corporate Secretary
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Latham, NY
June 12,
2014
4
PLUG POWER INC.
968 Albany Shaker Road
Latham, NY 12110
(518) 782-7700
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
To Be Held on Wednesday July 23, 2014
This Proxy Statement is furnished in connection with
the solicitation of proxies by the Board of Directors of Plug Power Inc. (the
Company) for use at the 2014 Annual Meeting of Stockholders of the Company to
be held on Wednesday, July 23, 2014, at 10:00 a.m. Eastern Time, at the offices
of Goodwin Procter LLP, The New York Times Building, 620 Eighth Avenue, New
York, NY 10018, and any adjournments or postponements thereof (the Annual
Meeting).
At the Annual Meeting, the stockholders of
the Company will be asked to consider and vote upon the following matters:
1.
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The election of two Class III Directors each to hold
office until the Companys 2017 Annual Meeting of Stockholders and until such
directors successor is duly elected and qualified or until such directors
earlier resignation or removal;
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2.
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To consider and approve an amendment and restatement
of the Companys 2011 Stock Option and Incentive Plan;
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3.
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To consider and approve the Third Certificate of
Amendment of the Amended and Restated Certificate of Incorporation of the
Company to increase the number of authorized shares of Common Stock by
205,000,000 shares;
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4.
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To consider and approve an advisory resolution
regarding the compensation of the Companys named executive officers;
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5.
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The ratification of KPMG LLP as the Companys
independent auditors for 2014; and
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6.
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Such other business as may properly come before the
Annual Meeting and any adjournments or postponements thereof.
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The Notice of Annual Meeting and instructions for
accessing proxy materials as well as casting proxy votes are first being
furnished to stockholders of the Company on or
about June 12,
2014 in connection with the solicitation of proxies for the Annual Meeting. The
Board of Directors has fixed the close of business on June 6, 2014 as the record
date for the determination of stockholders entitled to notice of, and to vote
at, the Annual Meeting (the Record Date). Only holders of record of the
Companys common stock, par value $0.01 per share (the Common Stock) and
holders of the Companys Series C Redeemable Convertible Preferred Stock , par
value $ 0.01 per share (the Preferred Stock), at the close of business on the
Record Date will be entitled to notice of, and to vote at, the Annual Meeting.
As of the Record Date, there were 167,129,241 shares of Common Stock and 10,431
shares of Preferred Stock outstanding and entitled to vote at the Annual
Meeting. As of the record date, there were approximately 2,600 holders of record
of the Common Stock and one holder of record of the Preferred Stock. However,
management believes that a significant number of shares of Common Stock are
held by brokers under a nominee name and that the number of beneficial
stockholders of the Common Stock exceeds 122,000.
Each share of Common Stock outstanding on the Record Date is entitled to one
vote and each share of Preferred Stock outstanding on the Record Date is
entitled to a number of votes equal to the number of whole shares of Common
Stock into which such share of Preferred Stock is convertible as of the Record
Date.
As of the Record Date, the Preferred Stock was
convertible into 11,965,880 shares of Common Stock.
The presence, in person or by proxy, of a
majority of the total number of outstanding shares of Common Stock (treating
the Preferred Stock on an as-converted to Common Stock basis) entitled to vote
is necessary to constitute a quorum for the transaction of business at the
Annual Meeting. A quorum being present, the affirmative vote of a plurality of
the votes present in person or represented by proxy at the Annual Meeting and
entitled to vote on the matter is necessary to elect a nominee as a director of
the Company. Withhold authority votes, abstentions and broker
non-votes will be counted as present and entitled to vote for purposes of
determining a quorum. A withhold authority vote is a stockholders vote
to withhold authority to cast a vote for the election of one or more director
nominees. An abstention represents an affirmative choice to decline to vote
on a proposal other than the election of directors. A broker non-vote occurs
when a nominee holding shares for a beneficial owner does not vote on a
particular proposal because the nominee does not have discretionary voting
power under applicable law with respect to that proposal and has not received
instructions with respect to that proposal from the beneficial owner.
5
With respect to the
election of a director, votes may be cast in favor of or withheld from
the nominee
. With respect to Proposals 2, 3, 4 and 5,
stockholders may cast a vote in favor of or against, or abstain from voting on,
each proposal. Proposal 1, election of two Class III directors, shall be
determined by a plurality vote, which means the two nominees receiving the
highest number of affirmative votes at the Annual Meeting will be elected as
directors.
For Proposal 2, approval
of an amendment and restatement the Companys 2011 Stock Option and Incentive
Plan, Proposal 4, approval of an advisory resolution regarding the compensation
of the Companys named executive officers as described in the accompanying
proxy statement and Proposal 5, ratification of the independent auditors, the
affirmative vote of a majority of the votes properly cast for and against such
matter is required for approval. For Proposal 3, approval of an amendment
of the Companys Amended and Restated Certificate of Incorporation, the
affirmative vote of the holders of a majority of the outstanding shares of the
Common Stock
(treating
the Preferred Stock on an as-converted to Common Stock basis) is required for
approval.
For Proposals 2, 4 and 5,
abstentions and broker non-votes are not included in the number of votes cast
for and against the proposal and therefore have no effect on the vote on such
proposal. For Proposal 3, abstentions and broker non-votes will not be counted
as having been voted for the proposal and therefore will have the same effect
as negative votes.
If you hold shares through a broker, bank
or other custodian (also referred to as holding shares in street-name), only
such broker, bank, custodian or other nominee can vote your shares. In order to
ensure that your shares are voted at the Annual Meeting, you must give specific
instructions regarding how to vote your shares. If you do not give specific
instructions regarding how to vote your shares, the broker, bank, custodian or
other nominee may not exercise their discretion to vote your shares.
Stockholders of the Company are requested
to vote over the internet, by telephone, or by requesting a copy of the proxy
materials and by signing, dating and mailing the accompanying Proxy Card in the
return envelope or by attending the Annual Meeting and voting in person.
Stockholders who hold shares indirectly as the beneficial owner of shares held
for them by a broker or other nominee (i.e., in street name) may direct their
vote without attending the Annual Meeting by submitting voting instructions to
their broker or nominee.
Common Stock represented by properly
executed proxies received by the Company and not revoked will be voted at the
Annual Meeting in accordance with the instructions contained therein.
If
instructions are not given therein, properly executed proxies will be voted
FOR the election of the two nominees of the Board of Directors as Class III
Directors of the Company (Proposal 1); FOR the approval of the Amendment and
Restatement of the Companys 2011 Stock Option and Incentive Plan (Proposal 2); FOR the approval of the Third
Certificate of Amendment of the Amended and Restated Certificate of
Incorporation of the Company (Proposal 3); FOR the approval of the advisory
resolution regarding the compensation of the Companys
named
executive officers
(Proposal 4); and FOR the ratification of
KPMG LLP as the Companys Independent Auditors for 2014 (Proposal 5), as
described in this Proxy Statement.
It is not anticipated that any
matters other than those set forth in this Proxy Statement will be presented at
the Annual Meeting. If other matters are presented, proxies will be voted in
accordance with the discretion of the proxy holders.
Any properly completed proxy may be
revoked at any time before it is voted on any matter (without, however,
affecting any vote taken prior to such revocation) by (1) giving written notice
of such revocation to the Corporate Secretary of the Company, (2) submitting a
new proxy by telephone, internet or proxy card after the date of the previously
submitted proxy (or submitting new voting instructions with respect to shares
held in street name), or (3) attending the Annual Meeting and voting in person.
Attendance at the Annual Meeting will not, by itself, revoke a proxy.
A notice with
instructions for accessing proxy materials via the internet or receipt by mail
is being furnished to stockholders of the Company concurrently with the Notice
of Annual Stockholder Meeting.
6
PROPOSAL 1: ELECTION OF
DIRECTORS
Introduction
At the Annual Meeting, two Class III
Directors will be elected to serve until the Annual Meeting of Stockholders in
2017 and until such directors successor is duly elected and qualified or until
such directors earlier resignation or removal. The Board of Directors has
nominated Larry G. Garberding and Douglas T. Hickey for re-election as Class
III Directors. Shares represented by each properly executed proxy will be
voted for the re-election of Larry G. Garberding and Douglas T. Hickey as
directors, unless contrary instructions are set forth on such proxy. Each
nominee has agreed to stand for re-election and to serve, if elected, as a
director. However, if any nominee fails to stand for re-election or is
unable to accept election, the proxies will be voted for the election of such
other person as the Board of Directors may recommend.
Vote
Required
A quorum being present, the affirmative vote of a
plurality of the votes cast is necessary to elect a nominee as a director of
the Company. Votes
that are withheld will be excluded
entirely from the vote and will have no effect on the vote. Broker non-votes
will also have no effect on the outcome of the election of directors.
Recommendation of the
Board
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A
VOTE
FOR
THE ELECTION OF EACH OF THE NOMINEES OF THE BOARD OF DIRECTORS
AS CLASS III DIRECTORS OF THE COMPANY.
INFORMATION ABOUT OUR DIRECTORS
The number of directors of the Company is presently
fixed at ten (10), and the Board of Directors currently consists of ten (10)
members. The Board of Directors is divided into three classes, with three (3)
directors in Class I, four (4) directors in Class II, and three (3) directors
in Class III. Directors in Classes I, II and III serve for three-year
terms with one class of directors being elected by the Companys stockholders
at each Annual Meeting of Stockholders.
The Board of Directors has nominated Larry G.
Garberding and Douglas T. Hickey for re-election as Class III Directors.
The Board determined that Evgeny Miroshnichenko would not be nominated for
re-election at the Annual Meeting and his term as a director will expire at the
Annual Meeting on July 23, 2014.
The Board of Directors has determined that Ms. Helmer
and Messrs. Garberding, McNamee, Willis, Hickey, Roth and Kenausis are
independent directors as defined in Rule 5605(a)(2) under the Marketplace Rules
of the National Association of Securities Dealers, Inc. (the NASDAQ Rules).
The positions of Chief Executive Officer and Chairman
of the Board are currently each filled by a different individual, Andrew Marsh
and George McNamee, respectively. If the position of Chairman of the Board is
vacant, or if he or she is absent, the Chief Executive Officer presides, when
present, at meetings of stockholders and of the Board of Directors.
Set forth below is certain information regarding the
directors of the Company, including the two Class III Directors who have been
nominated for re-election at the Annual Meeting. The ages of and biographical
information regarding the nominees for re-election and each director who is not
standing for election is based on information furnished to the Company by each
nominee and director and is as of May 31, 2014.
7
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Name
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Age
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Director
Since
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Class ITerm Expires
2015
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Andrew Marsh
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58
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2008
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Gary
K. Willis (1)(2)
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67
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2003
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Maureen
O. Helmer (1)(3)
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57
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2004
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Class IITerm Expires 2016
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George
C. McNamee (2)
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6
7
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1997
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Johannes M. Roth
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35
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2013
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Xavier Pontone
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39
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2013
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Gregory L. Kenausis
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45
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2013
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Class IIITerm Expires 2014
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Larry
G. Garberding (1)(3)*
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75
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1997
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Douglas
T. Hickey (1)(2)(3)*
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59
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2011
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Evgeny
Miroshnichenko
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33
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2011
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_______________________
*
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Nominee for re-election.
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(1)
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Member
of the Audit Committee.
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(2)
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Member of the Compensation Committee.
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(3)
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Member of the Corporate Governance and Nominating
Committee.
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The principal occupation and business experience for
at least the last five years for each director of the Company is set forth
below. The biographies of each of the directors below contains
information regarding the persons service as a director, business experience,
director positions held currently or at any time during the last five years,
information regarding the experiences, qualifications, attributes or skills
that caused the Corporate Governance Committee and the Board to determine that
the person should serve as a director.
8
Andrew J. Marsh
has served as Chief Executive Officer, President and member of the Board of
Directors of the Company since April 8, 2008. Previously, Mr. Marsh was a
co-founder of Valere Power, where he served as CEO and Board Member from the
Companys inception in 2001 through its sale to Eltek ASA in 2007. Under his
leadership, Valere grew into a profitable global operation with over 200
employees and $90 million in revenues derived from the sale of DC power
products to the telecommunications sector. During Mr. Marshs tenure, Valere
Power received many awards such as the Tech Titan award as the fastest growing
technology company in the Dallas Fort Worth area and the Red Herring Top 100
Innovator Award. Prior to founding Valere, he spent almost 18 years with Lucent
Bell Laboratories in a variety of sales and technical management positions. Mr.
Marsh is a member of the board of directors of the California Hydrogen Business
Council, a non-profit group comprised of organizations and individuals in the
business of hydrogen. Mr. Marsh holds a Bachelor of Science in Electrical
Engineering Technology from Temple University, a Master of Science in Electrical
Engineering from Duke University and a Masters of Business Administration from
Southern Methodist University. We believe Mr. Marshs qualifications to
sit on our Board include his record of success in leadership positions in
technology companies having attributes similar to our Company, his extensive
experience in management positions as well as his educational background in
engineering and business administration.
Gary
K. Willis
has been a director of the
Company since 2003. Mr. Willis joined Zygo Corporations Board of
Directors in June 2009 after retiring as Chairman of the Board of Directors in
November 2000, having served in that capacity since November 1998. Zygo
Corporation is a provider of metrology, optics, optical assembly, and systems
solutions to the semiconductor, optical manufacturing, and
industrial/automotive markets. Mr. Willis had been a director of Zygo
Corporation since February 1992 and also served as President from 1992 to 1999
and as Chief Executive Officer from 1993 to 1999. Prior to joining Zygo
Corporation, Mr. Willis served as the President and Chief Executive
Officer of The Foxboro Company, a manufacturer of process control instruments
and systems. Mr. Willis is also a director of Rofin-Sinar Technologies,
Inc. and Middlesex Health Services, Inc. Mr. Willis holds a Bachelor
of Science degree in Mechanical Engineering from Worcester Polytechnic
Institute. We believe Mr. Willis qualifications to sit on our Board
include his extensive experience in management and director positions with similar
companies as well as his educational background in mechanical engineering.
Maureen
O. Helmer
has been a director of the
Company since 2004. Maureen O. Helmer is currently a member of the law firm
Hiscock & Barclay LLP and is the Chair of the firms Regulatory
Practice Group. Prior to her joining Hiscock & Barclay LLP,
Ms. Helmer was a member of Green & Seifter Attorneys,
PLLC. From 2003 through 2006 she practiced as a partner in the law firm of
Couch White, LLP and then as a solo practitioner. In addition to serving
as Chair of the New York State Public Service Commission (PSC) from 1998 to
2003, Ms. Helmer also served as Chair of the New York State Board on
Electric Generation Siting and the Environment. Ms. Helmer has
advised international energy, telecommunications and industrial companies on
policy and government affairs issues. Prior to her appointment as Chair,
Ms. Helmer served as Commissioner of the Public Service Commission from
1997 until 1998 and was General Counsel to the Department of the Public Service
Commission from 1995 through 1997. From 1984 through 1995, Ms. Helmer held
several positions in the New York Legislature. She also served as a board
member of the New York State Energy Research and Development Authority, the New
York State Environmental Board and the New York State Disaster Preparedness
Commission during her tenure as Chair of the PSC. In addition, she was
Vice Chair of the Electricity Committee of the National Association of
Regulatory Utility Commissioners and a member of the NARUC Board of
Directors. She was also appointed to serve as a member of the New York
State Cyber-Security Task Force. Ms. Helmer earned her Bachelor of
Science from the State University at Albany and her Juris Doctorate from the
University of Buffalo law school. She is admitted to practice law in New
York. We believe Ms. Helmers qualifications to sit on our Board
include her long history of experience with energy regulation, policy and
government affairs and advising energy and industrial companies.
George
C. McNamee
serves as Chairman of the
Companys Board of Directors and has served as such since 1997.
Mr. McNamee is a Director of iRobot Corporation (IRBT). He was previously
Chairman of First Albany Companies (now GLCH) and a Managing Partner of FA Tech
Ventures, an information and energy technology venture capital firm. Mr.
McNamees background in investment banking has given him broad exposure to many
financing and merger and acquisition issues. As an executive, he has dealt with
rapid-growth companies, technological change, crisis management, team building
and strategy. As a public company director, Mr. McNamee has led board
special committees, chaired audit committees, chaired three boards and has been
an active lead director. Mr. McNamee has previously served on public company
boards, including Mechanical Technology Inc. (MTI) and Home Shopping Network
(HSN). He has been an early stage investor, director and mentor for private
companies that subsequently went public including MapInfo (now Pitney Bowes),
META Group (now Gartner Group) and iRobot. He served as a NYSE director from
1999 to 2004 and chaired its foundation. In the aftermath of the 1987 stock
market crash, he chaired the Group of Thirty Committee to reform the Clearance
and Settlement System. Mr. McNamee has been active as a director or trustee of
civic organizations including The Albany Academies and Albany Medical Center,
whose finance Committee he chaired for a dozen years. He is also a
director of several private companies, a member of the Yale Development Board
and a Trustee of The American Friends of Eton College. He received his Bachelor
of Arts degree from Yale University. We believe Mr. McNamees
qualifications to sit on our Board include his experience serving on countless
boards, his background in investment banking and experience with the financial
sector and its regulatory bodies.
9
Johannes
M. Roth
has been a director since
April 2013. Mr. Roth is the founder and, since 2006, has been Managing Director
and Chairman of FiveT Capital Holding AG, an investment holding company based
in Switzerland with businesses specializing in asset management, risk
management and alternative investments. Since 2006, Mr. Roth has been a board
member of FiveT Capital AG, Zürich, Switzerland, which advises several
long-only funds and operates an asset management business for high net-worth
individuals. We believe Mr. Roths qualifications to sit on our Board include
his background in financial investments, financial and risk management and
equity capital markets as well as his experience in management positions.
Xavier
Pontone
has been a director since
October 2013. He is a director designee of Air Liquide Investissements dAvenir
et de Démonstration pursuant to the terms of Air Liquides investment in the
Company as described below under Item 13 - CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS AND DIRECTOR INDEPENDENCE. Since September 2013, Mr. Pontone has
been the Managing Director of Air Liquide Advanced Business, where he leads a
team that develops new growth opportunities with a focus on hydrogen mobility,
biogas and energy transition. Mr. Pontone sits on the board of directors of
Hypulsion, the Companys joint venture with Axane, S.A. (an Air Liquide
subsidiary). Mr. Pontone also sits on the boards of both Air Liquide Advanced
Technologies and Axane. He is Vice President of AFHYPAC (French association for
hydrogen and fuel cells). Mr. Pontone previously served as Manager of
Operations Control Center of Air Liquide Belgium Industries where he managed
operations of 12 large industrial gas production plants and associated
industrial gas product networks. Prior to Air Liquide Belgium Industries, Mr.
Pontone held a Business Management role in Western Canada for Air Liquide
Canada. We believe Mr. Pontones qualifications to sit on our Board include his
senior management experience in the hydrogen mobility and energy space, in
European markets and with our Hypulsion joint venture.
Gregory
L. Kenausis
has been a director since
October 2013. Mr. Kenausis is the founding partner and since 2005 has been
the Chief Investment Officer of Grand Haven Capital AG, an investment firm with
$40 million of assets under management, where he is the head of trading
activity and research and is responsible for managing the funds structure. We
believe Mr. Kenausiss qualifications to sit on our Board include his
background and senior level experience in financial investments, trading and
management and equity capital markets.
Larry G. Garberding
has served as a director of the Company since 1997.
Mr. Garberding was a Director and Executive Vice President and Chief
Financial Officer of DTE Energy Company and the Detroit Edison Company from
1990 until retiring in 2001. Mr. Garberding was a Certified Public Accountant,
a partner with a major public accounting firm, and has been on the board of
several corporations, having had responsibility for financial, operational,
regulatory and sales activities. Mr. Garberding received a Bachelor of
Science degree in Industrial Administration from Iowa State University. We
believe Mr. Garberdings qualifications to sit on our Board include his
extensive experience with power and energy companies and his background in
accounting, financing and operations.
Douglas
T. Hickey
has served as a director of
the Company since October 2011. Mr. Hickey previously sat on Plug Powers
Board from September 1, 2000 to April 24, 2006. Mr. Hickey currently
serves as Chief Executive Officer of BinWise, Inc. since 2012. Prior to
BinWise, from 2000 to 2011, Mr. Hickey was Managing Director at Hummer
Winblad Venture Partners (HWVP), one of the nations leading software venture
capital firms. Prior to joining HWVP, Mr. Hickey served as CEO for
Critical Path, Inc., where during his tenure revenue grew from less than $1M to
more than $150M and the company earned Forbes.com Number-One Fastest Growing
Company Award in 2000. Mr. Hickey previously held the CEO and President
position for Global Center Inc., where, he grew revenue from zero to more than
$50M of recurring revenue and achieved profitability. His focus on the
companys strategy enabled rapid growth, securing customers like Yahoo,
Netscape and Oracle, ultimately leading to the successful sale of the company
to Frontier Communications, (NYSE:FRO). Prior to Global Center, Mr. Hickey
was CEO and President of MFS DataNet, the leading supplier of data related
services to internet service providers and enterprise customers worldwide. MFS
grew to more than $1 billion in revenue and subsequently completed a successful
IPO and trade sale. We believe Mr. Hickeys qualifications to sit on our
Board include his extensive corporate leadership experience and his proven
background growing revenue.
Evgeny Miroshnichenko
has been a director
since October 2011. Mr. Miroshnichenko is the Director for Strategic
Development for INTER RAO UES (the Group). He is responsible for organization
of strategic management process, development and implementation of corporate
strategy, realization of strategic projects, as well as management of financial
investments of the Group. Mr. Miroshnichenko has also built solid
experience in corporate governance as he has held director positions in Boards
of Directors in a number of Russian electricity companies. We believe
Mr. Miroshnichenkos qualifications to sit on our Board include his
experience with strategic corporate projects and background in financial
investment management and corporate governance.
10
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors of the Company held
nine meetings during the fiscal year ended December 31, 2013 (Fiscal 2013).
The Board of Directors has established three standing committees, an Audit
Committee (the Audit Committee), a Compensation Committee (the Compensation
Committee), and a Corporate Governance and Nominating Committee (the
Governance Committee). During Fiscal 2013, each director attended at least
75% of the aggregate of (1) the total number of meetings of the Board of
Directors of the Company (held during the period for which he or she has been a
director) and (2) the total number of meetings of all committees of the Board
of Directors of the Company on which the director served (during the periods
that he or she served).
Discussed below in greater detail, the
Board of Directors administers its risk oversight function directly and through
its Audit Committee and Corporate Governance and Nominating Committee.
The Board and each of these Committees regularly discuss with management our
major risk exposures, their potential financial impact on Plug Power and the
steps we take to manage them. The Audit Committee is responsible for
oversight of Company risks relating to accounting matters, financial reporting
and legal and regulatory compliance, while the Corporate Governance and
Nominating Committee is responsible for oversight of risks relating to
management and Board succession planning, stakeholder responses to the
Companys ethics and business practices.
The Chief Financial Officer and the
General Counsel report to the Board of Directors regarding ongoing risk
management activities at the regularly scheduled, quarterly Board of Directors
meetings and may report on risk management activities more frequently, as
appropriate. Additionally, risk management is a standing agenda item for
the regularly scheduled, quarterly Audit Committee meetings.
Audit Committee
The Audit Committee consists of Messrs. Garberding
(Chair), Willis and Hickey, and Ms. Helmer. The Audit Committee held four
meetings during Fiscal 2013 and each member attended all of the meetings during
the period in which such person served on the committee.
Audit Committee Report
The Audit Committee of the Board of Directors is
currently composed of four directors, each of whom is an independent director
as defined in the NASDAQ Rules and the applicable rules of the Securities and
Exchange Commission (SEC). In addition, the Board of Directors has made a
determination that Mr. Garberding qualifies as an audit committee financial
expert as defined in the applicable rules of the SEC. Mr. Garberdings
designation by the Board as an audit committee financial expert is not
intended to be a representation that he is an expert for any purpose as a
result of such designation, nor is it intended to impose on him any duties,
obligations, or liability greater than the duties, obligations or liability
imposed on him as a member of the Audit Committee and the Board in the absence
of such designation.
The Audit Committees primary responsibility is for
oversight of the Companys accounting and financial reporting processes and
audits of the Companys financial statements. A more complete description of
the Audit Committees functions is set forth in the Audit Committees charter
which is published on the Investors section of the Companys website at
www.plugpower.com
.
In accordance with the Audit Committees
charter, management has the primary responsibility for the financial statements
and the financial reporting process, including maintaining an adequate system
of internal controls over financial reporting. The Companys independent
auditors, KPMG LLP (KPMG), report directly to the Audit Committee and are
responsible for performing an independent audit of the Companys consolidated
financial statements in accordance with the standards of the Public Company
Accounting Oversight Board (United States). The Audit Committee, among other
matters, is responsible for (i) appointing the Companys independent auditors,
(ii) evaluating such independent auditors qualifications, independence and
performance, (iii) determining the compensation for such independent auditors,
and (iv) approving all audit and non-audit services. Additionally, the Audit
Committee is responsible for oversight of the Companys accounting and
financial reporting processes and audits of the Companys financial statements
including the work of the independent auditors. The Audit Committee reports to
the Board of Directors with regard to:
11
-
fees to be paid to the auditors;
-
the performance of the Companys
independent auditors;
-
compliance with accounting and
financial policies; and
-
the Companys procedures and
policies relative to the adequacy of internal accounting controls.
The Audit Committee reviewed and discussed with
management of the Company and KPMG, the Companys 2013 quarterly unaudited
interim consolidated financial statements and 2013 annual consolidated
financial statements, including managements assessment of the effectiveness of
the Companys internal controls over financial reporting as of December 31,
2013. Management has represented to the Audit Committee that the Companys
consolidated financial statements were prepared in accordance with U.S.
generally accepted accounting principles.
Additionally, the Audit Committee has discussed with
KPMG any matters required to be discussed under professional standards which
include, among other items, matters related to the conduct of the audit of the
Companys annual consolidated financial statements. The Audit Committee has
also discussed the critical accounting policies used in the preparation of the
Companys annual consolidated financial statements, alternative treatments of
financial information within generally accepted accounting principles that KPMG
discussed with management, if any, the ramifications of using such alternative
treatments and other written communications between KPMG and management.
KPMG has provided to the Audit Committee the written
disclosures and the letter required by the applicable Public Company Accounting
Oversight Board requirements for independent accountant communications with
audit committees concerning auditor independence, and the Audit Committee
discussed with KPMG that firms independence. The Audit Committee has also
concluded that KPMGs performance of non-audit services is compatible with
KPMGs independence.
The Audit Committee also discussed with KPMG their
overall scope and plans for their audit and met with KPMG, with and without
management present, to discuss the results of their audit and the overall
quality of the Companys financial reporting. The Audit Committee also
discussed with KPMG whether there were any audit problems or difficulties, and
managements response.
In reliance on the reviews and discussions
referred to above, the Audit Committee recommended to the Board of Directors,
and the Board has approved, the inclusion of audited consolidated financial
statements in the Companys Annual Report on Form 10-K for the year ended
December 31, 2013. This report is provided by the following independent
directors, who constitute the Audit Committee:
Larry
G. Garberding (Chairman)
Maureen
O. Helmer
Gary
K. Willis
Douglas
Hickey
Independent Auditors Fees
The following table presents fees for
professional services rendered by KPMG for the audit of the Companys annual
financial statements and fees billed for other services rendered by KPMG:
|
KPMG
|
|
2013
|
2012
|
Audit Fees
|
$325,000
|
$310,000
|
Audit-Related Fees
|
$239,500
|
51,500
|
Tax Fees
|
-
|
-
|
|
|
|
Other
|
-
|
-
|
Total
|
$564,500
|
$361,500
|
12
In the above table, and in accordance with
SEC definitions and rules: (1) audit fees are fees for professional services
for the audit of the Companys consolidated financial statements included in
Form 10-K, review of unaudited interim consolidated financial statements
included in Form 10-Qs, or for services that are normally provided by the
accountant in connection with statutory and regulatory filings or engagements;
(2) audit-related fees are fees for assurance and related services that are
reasonably related to the performance of the audit or review of the Companys
consolidated financial statements; (3) tax fees are fees for tax compliance,
tax advice, and tax planning; and (4) all other fees are fees for any
services not included in the first three categories.
The Audit Committee approved all audit and
non-audit services provided to the Company by KPMG during Fiscal 2013.
Compensation Committee
The Compensation Committee consists
of Messrs. Willis (Chair), McNamee and Hickey, each of whom is an independent
director under the NASDAQ Rules. The Compensation Committee held three meetings
during Fiscal 2013. See Report of the Compensation Committee and the Board of
Directors on Executive Compensation and Compensation Committee Interlocks and
Insider Participation for a further description of the activities of the
Compensation Committee in Fiscal 2013. The Compensation Committees primary
responsibilities include (i) discharging the responsibilities of the Board of
Directors of the Company relating to compensation of the Companys executive
officers, (ii) providing oversight of the Companys benefit, perquisite and
employee equity programs, and (iii) reviewing the adequacy of the Companys
management succession plans. A more complete description of the Compensation
Committees functions is set forth in the Compensation Committees charter
which is published on the Investors section of the Companys website at
www.plugpower.com
.
Corporate
Governance and Nominating Committee
The Corporate Governance and Nominating
Committee (the Governance Committee) consists of Ms. Helmer (Chair) and
Messrs. Garberding and Hickey, each of whom is an independent director under
the NASDAQ Rules. The Governance Committee held three meetings during Fiscal 2013.
The Governance Committees responsibilities include (i) establishing criteria
for Board and committee membership, (ii) considering director nominations
consistent with the requirement that a majority of the Board be comprised of
independent directors as defined in the NASDAQ Rules, (iii) identifying
individuals qualified to become board members, and (iv) selecting the director
nominees for election at each Annual Meeting of Stockholders. The Governance
Committee is also responsible for developing and recommending to the Board a
set of corporate governance guidelines applicable to the Company and
periodically reviewing such guidelines and recommending any changes thereto. A
more complete description of the Governance Committees functions is set forth
in the Governance Committees charter which is published on the Investors
section of the Companys website at
www.plugpower.com
.
Director Compensation
The Compensation Committee periodically reviews the
Companys Non-Employee Director Compensation Plan (the Plan) to ensure that
the compensation aligns the directors interests with the long-term interests
of the stockholders and that the structure of the compensation is simple,
transparent and easy for stockholders to understand. The Compensation Committee
also considers whether the Plan fairly compensates the Companys directors when
considering the work required in a company of the size and scope of the
Company. Employee directors do not receive additional compensation for their
services as directors.
13
Pursuant to the Plan, upon initial
election or appointment to the Board of Directors, new non-employee directors
receive non-qualified stock options to purchase 65,000 shares (50,000 shares
for any new non-employee Chairman) of Common Stock with an exercise price equal
to fair market value on the date of grant and that become fully vested and
exercisable on the first anniversary of the date of the grant. Each year of a
non-employee directors tenure, the director will receive non-qualified options
to purchase 10,000 shares (15,000 shares for any non-employee Chairman), plus
non-qualified options to purchase an additional 5,000 shares if the director
serves as chairman of the Audit Committee and non-qualified options to purchase
an additional 2,000 shares if the director serves as chairman of any other
committee, including the Compensation Committee and the Corporate Governance
and Nominating Committee. These annual options have an exercise price equal to
fair market value on the grant date and become fully vested and exercisable on
the first anniversary of the date of the grant.
Under the Plan, each
non-employee director is paid an annual retainer of $40,000 ($85,000 for any
non-employee Chairman) for their services. Committee members receive additional
annual retainers in accordance with the following table:
|
|
|
Committee
|
Chairman
|
Member
|
Audit Committee
|
$
20,000
|
$ 15,000
|
|
|
|
Compensation Committee
|
15,000
|
5,000
|
|
|
|
Corporate
Governance and Nominating Committee
|
10,000
|
5,000
|
These additional payments for service on a committee
are due to the workload and broad-based responsibilities of the committees. The
total amount of the annual retainers are paid in a combination of fifty percent
(50%) cash and fifty percent (50%) Common Stock, with the ability to receive up
to one hundred percent (100%) Common Stock, at the election of the non-employee
director. At the Boards discretion, directors may receive up to eighty
percent (80%) of their annual retainers in cash. All Common Stock issued for the
annual retainers is fully vested at the time of issuance and is valued at its
fair market value on the date of issuance. Non-employee directors are also
reimbursed for their direct expenses associated with their attendance at board
meetings.
Non-Employee Director Compensation Table
The following table provides information
for non-employee directors who served during Fiscal 2013.
|
Fees Earned or Paid in
|
|
|
|
Name
|
Cash ($)
|
Stock Awards (1) ($)
|
Option Awards (2) ($)
|
Total ($)
|
Douglas
Hickey
|
31,250
|
31,251
|
3,480
|
65,981
|
Evgeny
Miroshnichenko
|
20,000
|
20,000
|
2,900
|
42,900
|
Evgeny
Rasskazov (3)
|
10,000
|
10,000
|
-
|
20,000
|
Gary
Willis
|
8,750
|
61,251
|
3,480
|
73,481
|
George
McNamee
|
18,000
|
72,001
|
4,350
|
94,351
|
Gregory
Kenausis
|
3,805
|
3,805
|
30,550
|
38,160
|
Johannes
Minoh Roth
|
17,926
|
17,927
|
12,000
|
47,853
|
Larry
Garberding
|
32,500
|
32,500
|
4,350
|
69,350
|
Maureen
Helmer
|
30,000
|
30,000
|
2,900
|
62,900
|
Xavier
Pontone
|
3,805
|
3,805
|
30,550
|
38,160
|
1)
|
This column represents the
aggregate grant date fair value of the stock award computed in accordance with
Financial Accounting Standards Board (FASB) Accounting Standards Codification
(ASC) Topic 718. Pursuant to SEC rules, the amounts shown exclude the impact of
estimated forfeitures. Fair value is calculated using the closing price of Plug
Power stock on the date of grant. Stock awards granted to directors vest
immediately. For additional information on stock awards, refer to note 14 of
the Companys consolidated financial statements in the Form 10-K for the year
ended December 31, 2013, as filed with the SEC. These amounts reflect the
Companys accounting expense for these awards, and do not correspond to the
actual value that will be recognized by the non-employee directors.
|
14
2)
|
This
column represents the aggregate grant date fair value of the option award
computed in accordance with FASB ASC Topic 718. Pursuant to SEC rules, the
amounts shown exclude the impact of estimated forfeitures. For additional
information on the valuation assumptions with respect to option awards, refer
to note 6 of the Companys consolidated financial statements in the Form 10-K
for the year ended December 31, 2013, as filed with the SEC. These amounts
reflect the Companys accounting expense for these awards, and do not
correspond to the actual value that will be recognized by the non-employee
directors. As of December 31, 2013, the non-employee directors held options to
purchase shares of Common Stock as follows: Douglas Hickey (91,000), Evgeny
Miroshnichenko (10,000), Gary Willis (111,100), George McNamee (132,000),
Gregory Kenausis (65,000), Johannes Minoh Roth (75,000), Larry Garberding
(119,500), Maureen Helmer (106,700) and Xavier Pontone (65,000).
|
|
|
3)
|
Evgeny
Rasskazov resigned from the Board of Directors as of June 28, 2013.
|
Policy Governing Director Attendance at Annual
Meetings
The Board of Directors has adopted a formal policy
that all directors are expected to attend the Companys Annual Meetings of
Stockholders in person, unless doing so is impracticable due to unavoidable
conflicts. At the time of the 2013 Annual Meeting, the Company had nine
directors and each director, other than Evgeny Miroshnichenko and Evgeny
Rasskazov, attended the 2013 Annual Meeting.
Policies Governing Director Nominations
Securityholder Recommendations
The Governance Committees current policy
with regard to the consideration of director candidates recommended by
securityholders is that it will review and consider any director candidates who
have been recommended by one or more of the stockholders of the Company
entitled to vote in the election of directors in compliance with the procedures
established from time to time by the Governance Committee. All securityholder
recommendations for director candidates must be submitted to the Companys
Corporate Secretary at Plug Power Inc., 968 Albany Shaker Road, Latham, New
York 12110, who will forward all recommendations to the Governance Committee.
We did not receive any securityholder recommendations for director candidates
for election at the 2014 Annual Meeting. All securityholder recommendations for
director candidates for election at the Companys 2015 annual meeting must be
submitted to the Companys Corporate Secretary on or before April 24, 2015 and
must include the following information:
-
the name and address of record of
the stockholder;
-
a representation that the
securityholder is a record holder of the Companys stock entitled to vote in
the election of directors, or if the securityholder is not a record holder,
evidence of ownership in accordance with Rule 14a-8(b)(2) of the Securities
Exchange Act of 1934, as amended;
-
the name, age, business and
residential address, educational background, current principal occupation or
employment, and principal occupation or employment for the preceding five (5) full
fiscal years of the proposed director candidate;
-
a description of the
qualifications and background of the proposed director candidate which
addresses the minimum qualifications and other criteria for membership on the
Board of Directors approved by the Governance Committee from time to time;
-
a description of all arrangements
or understandings between the securityholder and the proposed director
candidate;
-
the consent of the proposed
director candidate (i) to be named in the proxy statement relating to the
Annual Meeting of Stockholders and (ii) to serve as a director if elected at
such annual meeting; and
-
any other information regarding
the proposed director candidate that is required to be included in a proxy
statement filed pursuant to the rules of the SEC.
15
Board
Membership Criteria
The Governance Committee has established
criteria for membership on the Board of Directors. These criteria include the
following specific, minimum qualifications that the Governance Committee
believes must be met by a Governance Committee-recommended nominee for a
position on the Board of Directors:
-
The nominee must have high
personal and professional integrity, must have demonstrated exceptional ability
and judgment, and must be expected, in the judgment of the Governance
Committee, to be highly effective, in conjunction with the other nominees to
the Board of Directors, in collectively serving the interests of the Company
and its stockholders.
In addition to the minimum qualifications for each
nominee set forth above, the Governance Committee will recommend that the Board
of Directors select persons for nomination to help ensure that:
-
the Board of Directors will be
comprised of a majority of independent directors in accordance with NASDAQ
rules;
-
each of the Audit, Compensation
and Governance Committees shall be comprised entirely of independent directors;
-
each member of the Audit Committee
is able to read and understand fundamental financial statements, including a
companys balance sheet, income statement, and cash flow statement; and
-
at least one member of the Audit
Committee has past employment experience in finance or accounting, requisite
professional certification in accounting, or any other comparable experience or
background which results in the individuals financial sophistication,
including being or having been a chief executive officer, chief financial
officer or other senior officer with financial oversight responsibilities.
Finally, in
addition to any other standards the Governance Committee may deem appropriate
from time to time for the overall structure and composition of the Board of
Directors, the Governance Committee, when recommending that the Board of
Directors select persons for nomination, may consider whether the nominee has
direct experience in the industry or in the markets in which the Company
operates.
The Governance Committee will recommend to the Board
of Directors the nomination of the director candidates who it believes will,
together with the existing members of the Board of Directors and other
nominees, best serve the interests of the Company and its stockholders.
Identifying and Evaluating Nominees
In considering whether to
recommend any candidate for inclusion in the Boards slate of recommended
director nominees, including candidates recommended by shareholders, the
Companys Corporate Governance and Nominating Committee will apply the criteria
set forth in Plug Powers Corporate Governance Guidelines. These criteria
include the candidates integrity, business acumen, age, experience,
commitment, diligence, conflicts of interest and the ability to act in the
interests of all shareholders. Our Corporate Governance Guidelines
specify that the value of diversity on the Board should be considered by the
Corporate Governance and Nominating Committee in the director identification
and nomination process. The Committee seeks nominees with a broad diversity of
experience, professions, skills, geographic representation and backgrounds. The
Committee does not assign specific weights to particular criteria and no
particular criterion is necessarily applicable to all prospective nominees. The
Company believes that the backgrounds and qualifications of the directors,
considered as a group, should provide a significant composite mix of
experience, knowledge and abilities that will allow the Board to fulfill its
responsibilities. Nominees are not discriminated against on the basis of race,
religion, national origin, sexual orientation, disability or any other basis
proscribed by law. For a more comprehensive discussion of our Corporate
Governance and Nominating Committees current policy with regard to the
consideration of director candidates, please refer to the section of this
document titled Policies Governing Director Nominations.
To review the effectiveness
of assessing the diverse skills, qualifications and backgrounds of Director
Nominations, the Board of Directors and each of the three standing Board Committees
conduct annual self-evaluations. In addition, the Corporate Governance and
Nominating Committee monitors the effectiveness of these procedures on an
ongoing basis.
16
Contacting
the Board of Directors
You may contact any director of the Company by writing
to them c/o Plug Power Inc., 968 Albany Shaker Road, Latham, New York 12110,
Attention: Corporate Secretary. Your letter should clearly specify the name of
the individual director or group of directors to whom your letter is addressed.
Any communications received in this manner will be forwarded as addressed.
17
INFORMATION ABOUT OUR
EXECUTIVE OFFICERS
The names and ages of all executive
officers of the Company and the principal occupation and business experience
for at least the last five years for each are set forth below. The ages of and
biographical information regarding each executive officer is based on
information furnished to the Company by each executive officer and is as of May
31, 2014.
|
|
|
Executive Officers
|
Age
|
Position
|
|
|
|
Andrew Marsh
|
58
|
President, Chief Executive Officer and Director
|
|
|
|
David P. Waldek
|
49
|
Interim Chief Financial Officer
|
|
|
|
Keith C. Schmid
|
51
|
Chief Operating Officer
|
|
|
|
Jill McCoskey
|
46
|
Chief Accounting Officer
|
|
|
|
Gerard L. Conway, Jr.
|
49
|
General
Counsel, Corporate Secretary and Senior Vice President
|
|
|
|
Erik Hansen
|
42
|
Senior
Vice President
|
|
|
|
|
|
|
The biographies of each of the executive officers
below contains information regarding the persons service as an executive,
business experience, director positions held currently or at any time during
the last five years, information regarding the experiences, qualifications,
attributes or skills that caused the Corporate Governance Committee and the
Board to determine that the person should serve as an executive officer.
Andrew Marshs
biographical
information can be found in the section entitled
Information about our
Directors
in this Proxy Statement.
David
P. Waldek
has been a founding partner
of CFO Advisory Group, LLC, financial and business solutions advisory firm,
since 2005. Prior to founding CFO Advisory Group, Mr. Waldek served as
Chief Financial Officer of Albany Molecular Research, Inc., a publicly held
drug discovery and development company, from March 1999 to November 2004. While
at Albany Molecular Research, Inc., he was responsible for development and
execution of the companys financial and strategic vision with operation
responsibility over finance, business development investor relations,
information technology and facilitates management. Mr. Waldek holds a
Bachelors of Science Degree in Economics from the University of Rochester and
an M.B.A in Finance from the William E. Simon Graduate School of Business Administration.
Keith
C. Schmid
joined Plug Power Inc. as
Chief Operating Officer in 2013. Mr. Schmid served as President of
SPS Solutions, a power solutions and energy storage consulting firm, from
2011 to 2013. Previously, Mr. Schmid served as CEO of Boston-Power
Incorporated, a provider of large format lithium ion battery solutions, in
2011, and as President and CEO of Power Distribution Incorporated, a power
distribution and protection company, from 2007 to 2010. In addition,
Mr. Schmid held the position of General Manager, Industrial Energy
Division- Americas for Exide Technologies from 2001 to 2007. Mr. Schmid holds a
Master of Science degree in Engineering and an M.B.A. from the University of
WisconsinMadison.
18
Jill
McCoskey
joined Plug Power Inc. as
Controller in 2008 and was appointed Chief Accounting Officer in April of 2013.
Prior to that, she served as the Controller of Consolidations and Financial
Reporting at Philips Medical Systems MR Inc. from November 2006 to December
2007. Her responsibilities at Philips Medical Systems MR Inc. included leading
the corporate accounting department as well as consolidating and reporting on
the financial operations of the business. She holds a Bachelors of Science
Degree in Accounting from Clarkson University, and an M.B.A. from the
University at Albany, State University of New York.
Gerard
L. Conway, Jr.
has served as General
Counsel and Corporate Secretary since September 2004 and, since March 2009, has
also served as Senior Vice President. In that capacity, Mr. Conway is
responsible for advising the Company on legal issues such as corporate law,
securities, contracts, strategic alliances and intellectual property. He
also serves as the Compliance Officer for securities matters affecting the
Company. During his tenure, Mr. Conway served as Vice President of
Government Relations from 2005 to June 2008 and in that capacity he advocated
on energy issues, policies, legislation and regulations on the state, federal,
national and international levels on behalf of the Company and the alternative
energy sector. Prior to his appointment to his current position,
Mr. Conway served as Associate General Counsel and Director of Government
Relations for the Company beginning in July 2000. Prior to joining Plug Power,
Mr. Conway spent four years as an Associate with Featherstonhaugh, Conway,
Wiley & Clyne, LLP, where he concentrated in government relations,
business and corporate law. Mr. Conway has more than nineteen years
of experience in general business, corporate real estate and government
relations. Mr. Conway holds a Bachelor of Arts degree in English and
Philosophy from Colgate University and a Juris Doctorate from Boston University
School of Law.
Erik
Hansen
joined Plug Power Inc. as Vice
President of Business Development in 2008 and was appointed Senior Vice
President in October of 2009. Mr. Hansen is responsible for directing
the sales of the Company. Mr. Hansen has more than 15 years of
experience with cutting edge technologies related to energy storage
systems. Prior to joining Plug Power, he was General Manager of Sales and
Systems Engineering for Cobasys LLC in Orion, Michigan, where he worked for
eight years. In that role, Mr. Hansen led the decision-making and
strategic planning for the manufacture and sales of advanced energy storage
solutions for both the transportation and uninterruptible power
systems. Mr. Hansen holds a Bachelor of Science degree in Electrical
Engineering and a Bachelor of Science degree in Computer Engineering, both from
West Virginia University.
Subject to any terms of any employment agreement
with the Company (as further described in this Proxy Statement), each of the
executive officers holds his or her respective office until the regular annual
meeting of the Board of Directors following the Annual Meeting of Stockholders
and until his or her successor is elected and qualified or until his or her
earlier resignation or removal.
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
We
provide what we believe is a competitive total compensation package to our
executive management team through a combination of base salary, annual
incentive bonuses, long-term equity incentive compensation, and broad-based
benefits programs. We place emphasis on pay-for-performance based incentive
compensation, which is designed to reward our executives based on the
achievement of predetermined performance goals. This Compensation
Discussion and Analysis explains our compensation objectives, policies and practices
with respect to each individual serving as our Chief Executive Officer or Chief
Financial Officer during 2013, the three most highly-compensated executive
officers other than our Chief Executive Officer and Chief Financial Officer,
and an additional individual for whom disclosure would have been provided but
for the fact that he was not serving as an executive officer of the Company at
the end of 2013, who are collectively referred to as the named executive
officers.
Objectives
of Our Executive Compensation Programs
Our compensation programs for our named executive
officers are designed to achieve the following objectives:
-
Attract and retain talented and
experienced executives;
-
Motivate and reward executives
whose knowledge, skills and performance are critical to our success;
-
Provide a competitive compensation
package which is weighted towards pay-for-performance and in which total
compensation is primarily determined by Company and individual results and the
creation of shareholder value;
19
-
Ensure fairness among the
executive management team by recognizing the contributions each executive makes
to our success; and
-
Motivate our executives to manage
our business to meet our short- and long-term objectives and reward them for
meeting these objectives.
Our
Executive Compensation Programs
Our
executive compensation primarily consists of base salary, annual incentive bonuses,
long-term equity incentive compensation and broad-based benefits
programs. Consistent with the emphasis we place on pay-for-performance
based incentive compensation, long-term equity incentive compensation in the
form of stock options and restricted stock constitute a significant portion of
our total executive compensation.
Within
the context of the overall objectives of our compensation programs, our
Compensation Committee determined the specific amounts of compensation to be
paid to each of our executives in 2013 based on a number of factors, including:
-
Its understanding
of the amount of compensation generally paid by similarly situated companies to
their executives with similar roles and responsibilities;
-
Our executives performance during
2013 in general and as measured against predetermined performance goals;
-
The nature, scope and level of our
executives responsibilities;
-
Our executives effectiveness in
leading the Companys initiatives to increase customer value, productivity and
revenue growth;
-
The individual experience and
skills of, and expected contributions from, our executives;
-
The executives contribution to
the Companys commitment to corporate responsibility, including the executives
success in creating a culture of unyielding integrity and compliance with
applicable law and the Companys ethics policies;
-
The amounts of compensation being
paid to our other executives;
-
The executives contribution to
our financial results;
-
Our executives historical
compensation at our Company; and
-
Any contractual commitments we
have made to our executives regarding compensation.
Each
of the primary elements of our executive compensation is discussed in detail
below, including a description of the particular element and how it fits into
our overall executive compensation. Compensation paid to our named
executive officers in 2013 is discussed under each element. In the
descriptions below, we have identified particular compensation objectives which
we have designed our executive compensation programs to serve; however, we have
designed our compensation programs to complement each other and to collectively
serve all of our executive compensation objectives described above.
Accordingly, whether or not specifically mentioned below, we believe that, as a
part of our overall executive compensation, each element to a greater or lesser
extent serves each of our objectives.
Base Salary
We pay our executives a base salary which we review
and determine annually. We believe that a competitive base salary is a
necessary element of any compensation program designed to attract and retain
talented and experienced executives. We also believe that attractive base
salaries can motivate and reward executives for their overall
performance. Base salaries are, in part, established based on the
individual experience, skills, expected contributions of our executives, and
our executives performance during the prior year.
20
After a
review of 2012 base salaries, we did not increase the annual base salaries of
our named executive officers for 2013. Base salaries for 2013 were as
follows: Mr. Marsh $450,000, Mr. Conway $250,000,
Ms. McCoskey$153,500, Mr. Hansen$230,000, Mr. Andersen
$300,000, and Mr. Corless $230,000 In April 2013, we engaged CFO
Advisory Group to provide the services of Mr. Waldek to serve as our
Interim Chief Financial Officer at a daily rate of $1,250. For 2013, we paid a
total of $113,021 to CFO Advisory Group for the services of Mr. Waldek. In
October 2013, we hired Mr. Schmid as our Chief Operating Officer with an
initial annual base salary of $300,000. Our executives base salaries reflect
the initial base salaries that we negotiated with each of our executives at the
time of his or her initial employment or promotion and our subsequent
adjustments to these amounts to reflect market increases, the growth and stage
of development of our Company, our executives performance and increased
experience, any changes in our executives roles and responsibilities, and
other factors. The initial base salaries that we negotiated with our
executives were based on our understanding of the market at the time, the
individual experience and skills of, and expected contribution from, each
executive, the roles and responsibilities of the executive, the base salaries
of our existing executives, and other factors.
Annual Incentive
Bonuses
Our
named executive officers are eligible to receive annual incentive bonuses based
on our pay-for-performance incentive compensation program. They are
eligible to receive annual incentive bonuses primarily based upon their
performance as measured against predetermined individual performance goals,
including financial measures, achievement of strategic objectives, and other
factors. The primary objective of this program is to motivate and reward
our named executive officers for meeting individual performance goals. We
do not believe that every important aspect of executive performance is capable
of being specifically quantified in a predetermined performance goal. For
example, events outside of our control may occur after we have established the
named executive officers individual performance goals for the year that
require our named executive officers to focus their attention on different or
other strategic initiatives; thus, the individual performance goals may be
modified during the fiscal year by the President and Chief Executive Officer,
or the Board of Directors in the case of the President and Chief Executive
Officer himself, to account for such events.
Within
our pay-for-performance incentive compensation program, specific performance
attainment levels are indicated for each performance goal. These performance
attainment levels correlate to potential bonus award amounts that are
calculated as a percentage of each executives base salary.
We
established threshold, target and stretch attainment levels for each of our
named executive officers based on a percentage of his or her base
salary. For Mr. Marsh, the attainment levels were set at 17%, 56% and
83% of his base salary. For Mr. Hansen, the attainment levels were set at
43%, 109% and 163% of his base salary. For each other named executive officer,
the attainment levels were set at 10%, 20% and 30% of his or her base salary.
Mr. Hansens potential bonus levels were set significantly higher primarily
because of his sales-focused role, the importance of sales growth to the
Companys strategy and our belief that a greater portion of his compensation
should be tied to a performance-based incentive. Because the annual incentive
bonuses are payable based on the achievement of each of several different
performance goals, the executive officer may earn a bonus in an amount equal to
between 0% and 30% (or 83% and 163% in the case of Mr. Marsh and
Mr. Hansen, respectively) of his base salary given his actual
performance. If a performance goal is not met, then the executive does not
earn the portion of the bonus award attributable to that objective. The 20% (or
56% and 109% in the case of Mr. Marsh and Mr. Hansen, respectively)
attainment level is considered the target level for each performance goal
because it is challenging for the executive to attain, and the executive would
meet expectations if he achieved this level. The 10% (or 17% and 43% in
the case of Mr. Marsh and Mr. Hansen, respectively) attainment level
is considered the threshold level for each performance goal because although
still challenging, it is the minimum acceptable performance level. The 30%
(or 83% and 163% in the case of Mr. Marsh and Mr. Hansen,
respectively) attainment level is considered the maximum, or stretch, level for
each performance goal because it is most challenging for the executive to attain,
and the executive would need to exceed expectations to achieve this
level. The maximum and threshold performance attainment levels are
determined in relation to the target attainment levels and are intended to
provide for correspondingly greater or lesser incentives in the event that
performance is within an appropriate range above or below the target
performance attainment level.
21
In
order to link each executives performance to corporate-wide strategy, the
executives individual performance goals directly correlate to our corporate
milestones, which are recommended by management and adopted or modified by the
Board of Directors after appropriate consideration and review. The
executives individual performance goals are determined in the same way as the
corporate milestones such that management reviews how each executive may
contribute to the corporate milestones and recommends individual performance
goals to the Board of Directors. The Board of Directors, after appropriate
consideration and review, approves or modifies the individual performance
goals. For 2013, the individual performance goals, as well as the corporate
milestones, included (i) annual and quarterly product order targets,
(ii) revenue, (iii) addition and expansion of large customer accounts
and (iv) earnings before interest, taxes, depreciation, amortization and
non-cash charges for equity compensation (EBITDAS). Each performance goal is
given a relative weighting for each executive such that the achievement of (or
failure to achieve) certain objectives has a greater impact on the potential
bonus award. For 2013, the goals were weighted as follows: for Mr. Marsh,
order targets 50%, revenue 25%, EBITDAS 25%, for Mr. Hansen, order
targets 40%, large customers 40%, revenue 20%, and each other named
executive officer, order targets 25%, revenue 25%, EBITDAS 25%, large
customers 25%. Because disclosure of the specific individual performance
goals would give competitors information that could be leveraged for
competitive advantage, we do not disclose these specific individual performance
goals or our executives actual performance against such goals.
After
completion of the fiscal year, initially the Chief Executive Officer and other
members of management, as appropriate, make a recommendation to the
Compensation Committee of the Board of Directors for each executives potential
bonus amount based on his level of attainment of each of his individual
performance goals (with the exception of the Chief Executive Officer himself
whose level of attainment is evaluated by the Compensation Committee
directly). The Board of Directors, after review and discussion and
recommendation from the Compensation Committee, determines the final level of
attainment for each executives individual performance goals.
In
2013, Mr. Marsh earned a bonus of $93,750, or 20.8% of his annual base
salary. Ms. McCoskey earned a bonus of $11,252, or 7.33% of her annual
base salary. Mr. Conway earned a bonus of $18,325, or 7.33% of his annual
base salary. Mr. Hansen earned a bonus of $140,000, or 60.9% of his annual
base salary, and Mr. Corless earned a bonus of $22,067, or 9.6% of his
annual base salary. Mr. Andersen did not receive a bonus. Annual bonus
awards made to the named executive officers in 2014 for performance in 2013 are
reflected in the Non-Equity Incentive Plan Compensation column of the Summary
Compensation Table.
Outside
of the incentive bonus plan, we determined to pay Ms. McCoskey a
discretionary bonus in the amount of $100,000 in connection with her
appointment as Chief Accounting Officer and the increased responsibilities that
accompany that position.
Long-Term Equity Incentive Compensation
We
grant long-term equity incentive awards in the form of stock options and
restricted stock to executives as part of our total compensation
package. Consistent with our emphasis on pay-for-performance based
incentive compensation, these awards represent a significant portion of total
executive compensation. Based on the stage of our Companys development
and the incentives we aim to provide to our executives, we have chosen to use
either stock options or a combination of stock options and restricted stock as
our long-term equity incentive awards. Our decisions regarding the amount
and type of long-term equity incentive compensation and relative weighting of
these awards among total executive compensation have also been based on our
understanding of market practices of similarly situated companies and our
negotiations with our executives in connection with their initial employment or
promotion by our Company.
Additionally,
the Board of Directors adopted stock ownership guidelines for executives,
including the named executive officers, and these guidelines are also
considered when granting long-term equity incentive awards to
executives. The ownership guidelines provide a target level of Company
equity holdings with which named executive officers are expected to comply
within five (5) years from the later of the effective date of the
guidelines (August 2005) or the date the individual is first appointed as an
executive. The target stock holdings are determined as a multiple of the
named executive officers base salary (5x for the Chief Executive Officer and
3x for the other named executive officers) and then converted to a fixed number
of shares using a 200-day average stock price. The following shares count
in determining compliance with the stock ownership guidelines: (i) shares
owned outright by the executive or his or her immediate family members residing
in the same household; (ii) shares held in the Plug Power Inc. Savings and
Retirement Plan; (iii) restricted stock issued as part of an executives
annual or other bonus whether or not vested; (iv) shares acquired upon the
exercise of employee stock options; (v) shares underlying unexercised employee
stock options times a factor of thirty-three percent; and (vi) shares held
in trust. The named executive officers are currently in compliance with stock
ownership guidelines.
Stock
option awards provide our executive officers with the right to purchase shares
of our common stock at a fixed exercise price typically for a period of up to
ten years, subject to continued employment with our Company. Stock options
are earned on the basis of continued service and generally vest over three
years, beginning with one-third vesting on the first anniversary of the grant
date, one-third vesting on the second anniversary of the grant date and the
final one-third vesting on the third anniversary of the grant date, subject to
acceleration in certain circumstances. Stock option awards are made
pursuant to our 2011 Stock Option and Incentive Plan. Except as may
otherwise be provided in the applicable stock option award agreement, stock
option awards become fully exercisable upon a change of control. The
exercise price of each stock option is the closing price of our common stock on
the NASDAQ Capital Market as of the option grant date.
22
Grants
to new hires and grants relating to an existing executive officers promotion
may be made on a periodic basis. All grants to executive officers are
approved by the Compensation Committee. We consider a number of factors
in determining the number of stock options, if any, to grant to our executives,
including:
-
the number of shares subject to,
and exercise price of, outstanding options, both vested and unvested, held by
our named executive officers;
-
the vesting schedule of the
unvested stock options held by our named executive officers; and
-
the amount and percentage of our
total equity on a diluted basis held by our named executive officers.
Restricted
stock awards provide our executive officers with a long-term incentive
alternative to the stock option awards. Restricted stock awards vest
subject to both continued employment of the executive by the Company and either
time-based vesting or vesting based on satisfaction of specified performance
objectives.
In
October 2009, the Compensation Committee recommended and the Board of Directors
approved a Long Term Incentive (LTI) Plan (the LTI Plan). Designed as an
incentive vehicle to support employee efforts, the LTI Plan sought to increase
shareholder value by encouraging Plug Power employees to continue to work
diligently to further the Companys long term goals.
Under
the LTI Plan, a select group of critical employees, including Messrs. Marsh,
Conway, Hansen, Corless and Andersen, received a one-time grant of restricted
stock units (RSUs) calculated using a multiple of the employees base salary.
Under the terms of the RSU grant, the restrictions on each participants RSU
allocation lapse over a three-year period upon successful completion of
weighted performance-based metrics. Specifically, restrictions on 25% of RSUs
were tied to the Companys achievement of revenue targets, while the
restrictions on 75% of RSUs were tied to the Companys achievement of earnings
before interest expense, taxes, depreciation, amortization and non-cash charges
for equity compensation (EBITDAS) targets. If the Company fails to achieve
any of the articulated performance-based metrics for a fiscal year, a
percentage of the total RSUs are forfeited for that fiscal year.
In
2010, 2011, 2012 and 2013, none of the revenue or EBITDAS performance-based
metrics were reached. Accordingly, no restrictions lapsed with respect to any
performance period under the LTI Plan and all of the RSUs awarded under the LTI
Plan were forfeited.
Broad-Based Benefits
All full-time employees, including our named executive
officers, may participate in our health and welfare benefit programs, including
medical, dental, and vision care coverage, disability insurance and life
insurance, and our 401(k) plan.
Relationship of
Executive Compensation to Risk
The
Compensation Committee considers whether the design of the Companys executive
compensation program encourages senior executives to engage in excessive
risk-taking. The Compensation Committee reviews the overall program design, as
well as the balance between short-term and long-term compensation, the metrics
used to measure performance and the award opportunity under the Companys
incentive compensation program, and the implementation of other administrative
features designed to mitigate risk such as vesting requirements and stock
ownership guidelines as described above. Based on its review, the Compensation
Committee believes that the Companys executive compensation program is aligned
to the interests of stockholders, appropriately rewards pay for performance,
and does not promote unnecessary and excessive risk.
Our Executive Compensation Process
The Compensation Committee of our Board of Directors is responsible for
determining the compensation for our named executive officers. The Compensation
Committee is composed entirely of non-employee directors who are independent
as that term is defined in the applicable NASDAQ rules. In determining executive
compensation, our Compensation Committee annually reviews the performance of our
executives with our Chief Executive Officer, and our Chief Executive Officer
makes recommendations to our Compensation Committee with respect to the
appropriate base salary, annual incentive bonuses and performance measures, and
grants of long-term equity incentive awards for each of our executives. The
Chairman of the Compensation Committee makes recommendations to the Compensation
Committee with regards to the Chief Executive Officers compensation. The
Compensation Committee makes its determination regarding executive compensation
and then recommends such determination to the Board of Directors. The Board of
Directors ultimately approves executive compensation.
23
As a
result, the total amount of compensation that we paid to our executives, the
types of executive compensation programs we maintained, and the amount of
compensation paid to our executives under each program has been determined by
our Compensation Committee and Board of Directors based on their understanding
of the market, experience in making these types of decisions, and judgment
regarding the appropriate amounts and types of executive compensation to provide.
The Compensation Committee did not engage a compensation consultant in 2013.
Summary
Compensation
The
following table sets forth information concerning compensation for services
rendered in all capacities awarded to, earned by or paid in the last three
fiscal years to the Companys named executive officers.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
|
|
|
|
|
|
Name and
Principal Position
|
|
Year
|
|
|
Salary ($)
|
|
|
Bonus ($)
|
|
|
Stock
Awards ($)
|
|
|
Option
Awards ($)
|
|
|
Incentive Plan
Compensation ($)
|
|
|
All Other
Compensation ($)
|
|
|
Total ($)
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
|
(2)
|
|
|
(3)
|
|
|
|
|
|
|
|
Andrew Marsh
|
|
|
2013
|
|
|
|
450,000
|
|
|
|
|
|
|
|
135,667
|
|
|
|
58,000
|
|
|
|
93,750
|
|
|
|
15,266
|
(4)
|
|
|
752,683
|
|
President, Chief Executive Officer and Director
|
|
|
2012
|
|
|
|
443,654
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,758
|
(4)
|
|
|
458,412
|
|
|
|
|
2011
|
|
|
|
375,000
|
|
|
|
|
|
|
|
|
|
|
|
740,588
|
|
|
|
121,125
|
|
|
|
14,276
|
(4)
|
|
|
1,250,989
|
|
Gerald A. Anderson (5)
|
|
|
2013
|
|
|
|
107,885
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32,936
|
(6)
|
|
|
140,821
|
|
Former Chief Financial Officer and Senior Vice President
|
|
|
2012
|
|
|
|
327,462
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,002
|
(6)
|
|
|
337,464
|
|
|
|
|
2011
|
|
|
|
300,000
|
|
|
|
|
|
|
|
|
|
|
|
421,708
|
|
|
|
57,000
|
|
|
|
9,507
|
(6)
|
|
|
788,215
|
|
David Waldek (7)
|
|
|
2013
|
|
|
|
113,021
|
(8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
113,013
|
|
Interim Chief Financial Officer
|
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jill McCoskey (9)
|
|
|
2013
|
|
|
|
150,500
|
|
|
|
100,000
|
|
|
|
|
|
|
|
43,500
|
|
|
|
11,252
|
|
|
|
7,705
|
|
|
|
312,957
|
|
Chief Accounting Officer
|
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gerard L. Conway, Jr.
|
|
|
2013
|
|
|
|
250,000
|
|
|
|
|
|
|
|
12,334
|
|
|
|
58,000
|
|
|
|
18,325
|
|
|
|
10,757
|
(10)
|
|
|
349,416
|
|
General Counsel, Corporate Secretary and Senior Vice President
|
|
|
2012
|
|
|
|
245,769
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
180
|
(10)
|
|
|
245,949
|
|
|
|
|
2011
|
|
|
|
200,000
|
|
|
|
|
|
|
|
|
|
|
|
245,130
|
|
|
|
38,000
|
|
|
|
180
|
(10)
|
|
|
483,310
|
|
Erik J. Hansen
|
|
|
2013
|
|
|
|
230,000
|
|
|
|
|
|
|
|
43,167
|
|
|
|
58,000
|
|
|
|
140,000
|
|
|
|
11,620
|
(11)
|
|
|
482,787
|
|
Senior Vice President
|
|
|
2012
|
|
|
|
230,000
|
|
|
|
43,700
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,399
|
(11)
|
|
|
285,099
|
|
|
|
|
2011
|
|
|
|
230,000
|
|
|
|
|
|
|
|
|
|
|
|
245,130
|
|
|
|
251,700
|
|
|
|
175,784
|
(11)
|
|
|
902,614
|
|
Adrian Corless (12)
|
|
|
2013
|
|
|
|
248,657
|
|
|
|
|
|
|
|
12,334
|
|
|
|
58,000
|
|
|
|
22,067
|
|
|
|
|
|
|
|
341,058
|
|
Former Chief Technology Officer, Senior Vice President
|
|
|
2012
|
|
|
|
228,731
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
180
|
|
|
|
228,911
|
|
|
|
|
2011
|
|
|
|
215,000
|
|
|
|
|
|
|
|
|
|
|
|
245,130
|
|
|
|
40,850
|
|
|
|
5,215
|
|
|
|
506,195
|
|
24
(1)
|
This column represents the
aggregate grant date fair value of the stock award computed in accordance with FASB
ASC Topic 718. Pursuant to SEC rules, the amounts shown exclude the impact of
estimated forfeitures. Fair value is calculated using the closing price of Plug
Power stock on the date of grant. For additional information on stock awards,
refer to note 14 of the Companys consolidated financial statements in the Form
10-K for the year ended December 31, 2013, as filed with the SEC. These
amounts reflect the Companys accounting expense for these awards, and do not
correspond to the actual value that will be recognized by the named executives.
|
|
|
(2)
|
This column represents the
aggregate grant date fair value of the option award computed in accordance with
FASB ASC Topic 718. Pursuant to SEC rules, the amounts shown exclude the impact
of estimated forfeitures. For additional information on the valuation
assumptions with respect to option awards, refer to note 6 of the Companys
consolidated financial statements in the Form 10-K for the year ended
December 31, 2013, as filed with the SEC. These amounts reflect the
Companys accounting expense for these awards, and do not correspond to the
actual value that will be recognized by the named executives.
|
|
|
(3)
|
This column represents the dollar
amount of bonuses paid to executives under a non-equity incentive plan.
|
|
|
(4)
|
Includes the Companys share of
contributions on behalf of Mr. Marsh to the Plug Power 401(k) savings plan
in the amount of $14,750, $14,242 and $13,760, in the years ended 2013, 2012
and 2011, respectively, and payments of $516 for supplemental life insurance
premiums in each of the years ended 2013, 2012 and 2011.
|
|
|
(5)
|
Mr. Anderson was the Chief
Financial Officer and Senior Vice President until he resigned effective April 26,
2013.
|
|
|
(6)
|
Includes the Companys share of
contributions on behalf of Mr. Anderson to the Plug Power 401(k) savings
plan in the amount of $6,706, $9,486, and $9,231 in the years ended 2013, 2012
and 2011, respectively, payments of $0, $516, and $276 for supplemental life
insurance premiums in the years ended 2013, 2012 and 2011, respectively, and
payment of $26,230 for earned but unused vacation time in the year 2013.
|
|
|
(7)
|
Mr. Waldek was hired as
Interim Chief Financial Officer effective April 16, 2013.
|
|
|
(8)
|
Reflects the amount paid to CFO
Advisory Group for the services of Mr. Waldek.
|
|
|
(9)
|
Ms. McCoskey was named Chief
Accounting Officer effective April 16, 2013.
|
|
|
(10)
|
Includes the Companys share of
contributions on behalf of Mr. Conway to the Plug Power 401(k) savings
plan in the amount of $10,577 in the year ended 2013, and payments of $180 for
supplemental life insurance premiums in each of the years ended 2013, 2012 and
2011.
|
|
|
(11)
|
Includes the Companys share of
contributions on behalf of Mr. Hansen to the Plug Power 401(k) savings
plan in the amount of $11,500, $11,279 and $9,246 in the years ended 2013, 2012
and 2011, respectively, payment of $166,418 for moving and relocation expenses
in 2011, and payments of $120 for supplemental life insurance premiums in each of
the years ended 2013, 2012 and 2011.
|
|
|
(12)
|
Mr. Corless was the Chief
Technology Officer and Senior Vice President until he resigned effective
November 8, 2013.
|
25
Grants of Plan-Based Awards Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other
|
|
|
Option
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Awards:
|
|
|
Awards:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Number of
|
|
|
Exercise or
|
|
|
Grant Date
|
|
|
|
|
|
|
Shares of
|
|
|
Securities
|
|
|
Base Price of
|
|
|
Fair Value of
|
|
|
|
Estimated future payouts under non-equity incentive plan awards
|
|
|
|
|
|
Stock or Units
|
|
|
Underlying
|
|
|
Option
|
|
|
Option
|
|
|
|
Threshold ($)
|
|
|
Target ($)
|
|
|
Stretch ($)
|
|
|
Grant Date
|
|
|
(#)
|
|
|
Options (#)
|
|
|
Awards ($/Sh)
|
|
|
Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
|
(2)
|
|
|
(3)
|
|
|
(4)
|
|
Andrew Marsh
|
|
|
76,500
|
|
|
|
153,000
|
|
|
|
225,000
|
|
|
|
07/24/13
|
|
|
|
366,667
|
|
|
|
|
|
|
|
|
|
|
|
135,667
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
07/24/13
|
|
|
|
|
|
|
|
200,000
|
|
|
|
0.37
|
|
|
|
58,000
|
|
Gerry Anderson
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David Waldek
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jill McCoskey
|
|
|
15,350
|
|
|
|
30,700
|
|
|
|
46,050
|
|
|
|
07/24/13
|
|
|
|
|
|
|
|
150,000
|
|
|
|
0.37
|
|
|
|
43,500
|
|
Gerard L. Conway, Jr.
|
|
|
25,000
|
|
|
|
50,000
|
|
|
|
75,000
|
|
|
|
07/24/13
|
|
|
|
33,334
|
|
|
|
|
|
|
|
|
|
|
|
12,334
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
07/24/13
|
|
|
|
|
|
|
|
200,000
|
|
|
|
0.37
|
|
|
|
58,000
|
|
Erik J. Hansen
|
|
|
100,000
|
|
|
|
250000
|
|
|
|
375,000
|
|
|
|
07/24/13
|
|
|
|
116,667
|
|
|
|
|
|
|
|
|
|
|
|
43,167
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
07/24/13
|
|
|
|
|
|
|
|
200,000
|
|
|
|
0.37
|
|
|
|
58,000
|
|
Adrian Corless
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
07/24/13
|
|
|
|
33,334
|
|
|
|
|
|
|
|
|
|
|
|
12,334
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
07/24/13
|
|
|
|
|
|
|
|
200,000
|
|
|
|
0.37
|
|
|
|
58,000
|
|
1)
|
This column shows the number of
restricted shares granted in 2013 to the named executive. The restrictions
lapse ratably in three equal annual installments, beginning one year from the
date of grant.
|
2)
|
This column shows the number of
stock options granted in 2013 to the named executives. These options generally
vest and become exercisable ratably in three equal annual installments,
beginning one year from the date of grant.
|
3)
|
This column shows the per share exercise
price for the stock options granted, which was the closing price of Plug Power common
stock on the date of grant.
|
4)
|
This column represents the
aggregate grant date fair value of the stock awards and option awards computed
in accordance with Financial Accounting Standards Board (FASB) Accounting
Standards Codification (ASC) Topic 718. Pursuant to SEC rules, the amounts
shown exclude the impact of estimated forfeitures. For additional
information on the valuation assumptions with respect to option awards, refer
to note 6 of the Companys consolidated financial statements in the Form 10-K
for the year ended December 31, 2013, as filed with the SEC. These amounts
reflect the Companys accounting expense for these awards, and do not correspond
to the actual value that will be recognized by the named executives.
|
26
Outstanding
Equity Awards at Fiscal Year-End
The
following table provides information on the holdings of stock options and stock
awards by the named executive officers as of December 31, 2013. For
additional information about the option awards and stock awards, see the
description of equity incentive compensation in the section titled
Compensation Discussion and Analysis.
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
Number of
|
|
|
Number of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities
|
|
|
Securities
|
|
|
|
|
|
|
|
|
|
|
|
Market Value
|
|
|
|
Underlying
|
|
|
Underlying
|
|
|
|
|
|
|
|
|
Number of
|
|
|
of Shares of
|
|
|
|
Unexercised
|
|
|
Unexercised
|
|
|
Option
|
|
|
Option
|
|
|
Shares of Stock
|
|
|
Stock That
|
|
|
|
Options (#)
|
|
|
Options (#)
|
|
|
Exercise
|
|
|
Expiration
|
|
|
That Have Not
|
|
|
Have Not
|
|
|
|
Exercisable
|
|
|
Unexercisable
|
|
|
Price ($)
|
|
|
Date
|
|
|
Vested (#) (1)
|
|
|
Vested ($) (2)
|
|
Andrew Marsh
|
|
|
40,000
|
|
|
|
|
|
|
|
35.80
|
|
|
|
04/08/18
|
|
|
|
|
|
|
|
|
|
|
|
|
250
|
|
|
|
|
|
|
|
9.50
|
|
|
|
05/20/19
|
|
|
|
|
|
|
|
|
|
|
|
|
71,067
|
|
|
|
35,533
|
|
|
|
6.10
|
|
|
|
04/13/21
|
|
|
|
|
|
|
|
|
|
|
|
|
133,333
|
|
|
|
66,667
|
|
|
|
2.17
|
|
|
|
12/13/21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
200,000
|
|
|
|
0.37
|
|
|
|
07/24/23
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
366,667
|
|
|
|
568,334
|
|
Gerald A. Anderson
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David Waldek
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jill McCoskey
|
|
|
1,500
|
|
|
|
|
|
|
|
26.00
|
|
|
|
01/24/18
|
|
|
|
|
|
|
|
|
|
|
|
|
250
|
|
|
|
|
|
|
|
9.50
|
|
|
|
05/20/19
|
|
|
|
|
|
|
|
|
|
|
|
|
9,567
|
|
|
|
4,783
|
|
|
|
6.10
|
|
|
|
04/13/21
|
|
|
|
|
|
|
|
|
|
|
|
|
13,333
|
|
|
|
6,667
|
|
|
|
2.17
|
|
|
|
12/13/21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
150,000
|
|
|
|
0.37
|
|
|
|
07/24/23
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gerard L. Conway, Jr.
|
|
|
1,200
|
|
|
|
|
|
|
|
53.90
|
|
|
|
01/28/15
|
|
|
|
|
|
|
|
|
|
|
|
|
3,000
|
|
|
|
|
|
|
|
55.80
|
|
|
|
02/01/16
|
|
|
|
|
|
|
|
|
|
|
|
|
3,000
|
|
|
|
|
|
|
|
37.50
|
|
|
|
02/14/17
|
|
|
|
|
|
|
|
|
|
27
|
|
|
2,700
|
|
|
|
|
|
|
|
26.00
|
|
|
|
01/24/18
|
|
|
|
|
|
|
|
|
|
|
|
|
250
|
|
|
|
|
|
|
|
9.50
|
|
|
|
05/20/19
|
|
|
|
|
|
|
|
|
|
|
|
|
27,333
|
|
|
|
13,667
|
|
|
|
6.10
|
|
|
|
04/13/21
|
|
|
|
|
|
|
|
|
|
|
|
|
33,333
|
|
|
|
16,667
|
|
|
|
2.17
|
|
|
|
12/13/21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
200,000
|
|
|
|
0.37
|
|
|
|
07/24/23
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
33,334
|
|
|
|
51,668
|
|
Erik J. Hansen
|
|
|
5,000
|
|
|
|
|
|
|
|
8.60
|
|
|
|
10/29/18
|
|
|
|
|
|
|
|
|
|
|
|
|
250
|
|
|
|
|
|
|
|
9.50
|
|
|
|
05/20/19
|
|
|
|
|
|
|
|
|
|
|
|
|
27,333
|
|
|
|
13,667
|
|
|
|
6.10
|
|
|
|
04/13/21
|
|
|
|
|
|
|
|
|
|
|
|
|
33,333
|
|
|
|
16,667
|
|
|
|
2.17
|
|
|
|
12/13/21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
200,000
|
|
|
|
0.37
|
|
|
|
07/24/23
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
116,667
|
|
|
|
180,834
|
|
Adrian Corless
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,000
|
|
|
|
|
|
|
|
32.40
|
|
|
|
02/08/14
|
|
|
|
|
|
|
|
|
|
|
|
|
2,700
|
|
|
|
|
|
|
|
24.20
|
|
|
|
02/08/14
|
|
|
|
|
|
|
|
|
|
|
|
|
250
|
|
|
|
|
|
|
|
9.50
|
|
|
|
02/08/14
|
|
|
|
|
|
|
|
|
|
|
|
|
27,333
|
|
|
|
|
|
|
|
6.10
|
|
|
|
02/08/14
|
|
|
|
|
|
|
|
|
|
|
|
|
16,667
|
|
|
|
|
|
|
|
2.17
|
|
|
|
02/08/14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
This column represents the number of shares
that have not yet vested.
|
(2)
|
This column represents the market value of
the unvested restricted stock awards using the stock price at the end of
fiscal year 2013.
|
Option
Exercises and Stock Vested in Fiscal 2013 Table
There were no option exercises or stock
awards vested during the year for the named executive officers.
28
Employment Agreements
The Company and Mr. Marsh are parties to an
employment agreement which renews automatically for successive one-year terms
unless Mr. Marsh or the Company gives notice to the contrary.
Mr. Marsh receives an annual base salary of $450,000 and is eligible to:
(i) receive an annual incentive bonus of up to an amount equal to fifty
percent (50%) of his annual base salary; (ii) participate in all
savings and retirement plans; and (iii) participate in all benefit and
executive perquisites. Mr. Marshs employment may be terminated by the
Company for Cause, as defined in the agreement, or by Mr. Marsh for
Good Reason, as defined in the agreement, or without Good Reason upon
written notice of termination to the Company. If Mr. Marshs employment is
terminated by the Company for any reason other than Cause, death or disability,
or in the event that Mr. Marsh terminates his employment with the Company
and is able to establish Good Reason, the Company is obligated to pay
Mr. Marsh the sum of the following amounts:
(i)
|
any earned but unpaid annual base salary,
|
(ii)
|
incentive bonus earned but not yet paid,
|
(iii)
|
unpaid expense reimbursements,
|
(iv)
|
accrued but unused vacation, plus
|
(v)
|
any benefits that may have vested under any employee
benefit plan of the Company through the date of termination; plus
:
|
|
(a) one (1) times annual base salary and
|
|
(b) one (1) times the annual incentive bonus for the
immediately preceding fiscal year.
|
In addition, as of the date
of termination, any restricted stock, stock options and other stock awards held
by Mr. Marsh will accelerate vesting as if he had remained an employee for
an additional twelve (12) months following the date of termination. Further,
the Company is required to continue paying for health insurance and other
benefits for Mr. Marsh and his eligible family members for twelve
(12) months following his termination. The agreement also provides, among
other things, that if, within twelve (12) months after a Change in
Control, as defined in the agreement, the Company terminates Mr. Marshs
employment without Cause, then he is be entitled to:
(i)
|
receive a lump sum payment equal to three (3) times
the sum of (1) his current annual base salary plus (2) his average annual
incentive bonus over the three (3) fiscal years prior to the Change in
Control (or his annual incentive bonus for the fiscal year immediately
preceding to the Change of Control, if higher),
|
(ii)
|
accelerated vesting of his stock options and other
stock-based awards that would have vested had he remained an active employee
for twelve (12) months following his termination, and
|
(iii)
|
receive benefits, including health and life
insurance for twelve (12) months following the Change of Control.
|
The Company and Messrs. Conway, Hansen,
and Ms. McCoskey are parties to Executive Employment Agreements pursuant
to which if any of their employment is terminated by the Company for any reason
other than Cause, as defined in the agreement, death or disability, or in the
event that any terminates his employment with the Company and is able to
establish Good Reason, as defined in the agreement, the Company is obligated
to pay each the sum of the following amounts:
(i)
|
any earned but unpaid annual base salary,
|
(ii)
|
incentive bonus earned but not yet paid,
|
(iii)
|
unpaid expense reimbursements,
|
(iv)
|
accrued but unused vacation,
|
(v)
|
any benefits that may have vested under any employee
benefit plan of the Company through the date of termination; plus:
one (1) times annual base salary for Messrs. Conway
and Hansen, and fifty percent (50%) of then current annual base salary for Ms.
McCoskey.
|
29
In addition, Messrs. Conway and Hansen are entitled to
exercise any vested stock options for twelve (12) months following the
date of termination and the Company is required to continue paying health
insurance and other benefits to each and his eligible family members for twelve
(12) months following his termination. Ms. McCoskey is entitled to
exercise any vested stock options for six (6) months following the date of
termination and the Company is required to continue paying health insurance and
other benefits to her and her eligible family members for six (6) months
following her termination. The Executive Employment Agreements also provide,
among other things, that if, within twelve (12) months after a Change in
Control, as defined in the agreement, the Company terminates such executives
employment without Cause, then such executive shall be entitled to:
(i)
|
receive a lump sum payment (A) for Messrs.
Conway and Hansen equal to the sum of (1) his average annual base salary
over the three (3) fiscal years immediately prior to the Change of
Control (or the executives annual base salary in effect immediately prior to
the Change of Control, if higher) and (2) his average annual bonus over
the three (3) fiscal years prior to the Change in Control (or the
executives annual bonus in effect immediately prior to the Change of
Control, if higher), and (B) for Ms. McCoskey, equal to the sum of
(1) fifty percent (50%) of her average annual base salary over the
three (3) fiscal years immediately prior to the Change of Control (or
the executives annual base salary in effect immediately prior to the Change
of Control, if higher) and (2) fifty percent (50%) of her average
annual bonus over the three (3) fiscal years prior to the Change in
Control (or the executives annual bonus in effect immediately prior to the
Change of Control, if higher)
|
(ii)
|
accelerated vesting of his stock options and other
stock-based awards that would have vested had he remained an active employee
for twelve (12) months following his termination, and
|
(iii)
|
receive benefits, including health and life
insurance for twelve (12) months following the Change of Control.
|
|
|
Messrs. Andersen and Corless are also
parties to employment agreements that provide for a similar potential payment
upon termination of employment other than for Cause as discussed above. In
2013, Mr. Andersen and Mr. Corless each left the Company voluntarily
and therefore neither was entitled to receive any such payment.
Potential Payments Upon Termination or
Change-in-Control
The
Company and Messrs. Marsh, Conway and Hansen and Ms. McCoskey and are
parties to employment agreements, respectively, that provide for a potential
payment upon termination of employment other than for Cause as discussed
above in
Employment Agreements
.
Such
payments by the Company to any of the executives are subject to the executive
signing a general release of claims in a form and manner satisfactory to the
Company. An executive is not entitled to receive any such payment in the event
he breaches the Employee Patent, Confidential Information and Non-Compete
Agreement referenced in the executives respective agreement or any
non-compete, non-solicit or non-disclosure covenants in any agreement between
the Company and such executive. We agreed to provide severance payments to
such executives in these circumstances based on our negotiations with each of
our executives at the time they joined our Company, or as negotiated subsequent
to hiring, and in order to provide a total compensation package that we believed
to be competitive. Additionally, we believe that providing severance upon
a termination without cause can help to encourage our executives to take the
risks that we believe are necessary for our Company to succeed and also
recognizes the longer hiring process typically involved in hiring a senior
executive.
If
Mr. Marsh had been terminated without cause on December 31, 2013, the
approximate value of the severance package, including, as mentioned above in
Employment
Agreements
, salary, benefits and equity awards, under his employment
agreement would have been $767,883. If Ms. McCoskey, Mr. Conway or
Mr. Hansen had been terminated without cause on December 31, 2013,
the approximate value of the severance packages, including, as mentioned above
in
Employment Agreements
, salary, benefits and equity awards, under the
employment agreement for such named executive would have been:
Ms. McCoskey$88,899, Mr. Conway$314,607 and
Mr. Hansen$411,073.
30
The
Company and Messrs. Marsh, Conway and Hansen and Ms. McCoskey are parties
to employment agreements, respectively, that provide for a potential payment
upon a Change of Control, as discussed above in
Employment Agreements
. Such
payments by the Company to any of the executives are subject to the executive
signing a general release of claims in a form and manner satisfactory to the
Company. An executive is not entitled to receive any such payment in the event
he breaches the Employee Patent, Confidential Information and Non-Compete
Agreement referenced in the executives respective agreement or any
non-compete, non-solicit or non-disclosure covenants in any agreement between
the Company and such executive.
We
agreed to provide payments to these executives in these circumstances in order
to provide a total compensation package that we believed to be competitive.
Additionally, the primary purpose of our equity-based incentive awards is to
align the interests of our executives and our stockholders and provide our
executives with strong incentives to increase stockholder value over time. As
change-in-control transactions typically represent events where our
stockholders are realizing the value of their equity interests in our Company,
we believe it is appropriate for our executives to share in this realization of
stockholder value, particularly where their employment is terminated in
connection with the change-in-control transaction. We believe that this will
also help to better align the interests of our executives with our stockholders
in pursuing and engaging in these transactions.
If a
change-in-control had occurred on December 31, 2013 and on that date
Mr. Marsh, Ms. McCoskey, Mr. Conway or Mr. Hansen, had been
terminated without Cause, experienced a material negative change in his or her
compensation or responsibilities or was required to be based at a location more
than fifty (50) miles from his or her current work location, the value of
the change-of-control payments and benefits under the employment agreements for
each such named executive would have been as follows:
Mr. Marsh$1,806,921, Ms. McCoskey$105,171, Mr. Conway$333,851
and Mr. Hansen$441,906. The employment agreements provide for a
modified cutback of the payments in the event that the total value of all
change in control benefits exceed the maximum benefit that allows for a tax
deduction for the Company under Section 280G of the Internal Revenue Code
of 1986, as amended.
The following Report of the Compensation Committee of
the Board of Directors on Executive Compensation will not be deemed incorporated
by reference by any general statement incorporating by reference this Proxy
Statement into any of the Companys filings under the Securities Act of 1933,
as amended, or the Securities Exchange Act of 1934, as amended, except to the
extent that the Company specifically incorporates this information by
reference, and will not otherwise be deemed filed under such Acts.
Compensation Committee
Report
The
Compensation Committee reviews and evaluates individual executive officers and
determines the compensation for each executive officer (See the section
entitled
Executive Compensation
). The Compensation Committee also
oversees managements decisions concerning the performance and compensation of
other Company officers, administers the Companys incentive compensation and
other stock-based plans, evaluates the effectiveness of its overall
compensation programs, including oversight of the Companys benefit, perquisite
and employee equity programs, and reviews the Companys management succession
plans. A more complete description of the Compensation Committees functions is
set forth in the Compensation Committees charter which is published on the
Investors section of the Companys website at
www.plugpower.com
. Each
member of the Compensation Committee is an independent director as defined in
the NASDAQ Rules.
In
general, the Compensation Committee designs compensation to attract, retain and
motivate a superior executive team, reward individual performance, relate
compensation to Company goals and objectives and align the interests of the
executive officers with those of the Companys stockholders. We rely upon our
judgment about each individualand not on rigid guidelines or formulas, or
short-term changes in business performancein determining the amount and mix of
compensation elements for each senior executive officer. Key factors affecting
our judgments include: the executives performance compared to the goals and
objectives established for the executive at the beginning of the year; the
nature, scope and level of the executives responsibilities; the executives
contribution to the Companys financial results; the executives effectiveness
in leading the Companys initiatives to increase customer value, productivity
and revenue growth; and the executives contribution to the Companys
commitment to corporate responsibility, including the executives success in
creating a culture of unyielding integrity and compliance with applicable law
and the Companys ethics policies.
The
Compensation Committee has reviewed the Compensation Discussion and Analysis
and discussed that analysis with Management. Based on its review and
discussions with Management, the Compensation Committee recommended to our
Board of Directors that the Compensation Discussion and Analysis be included in
the Companys Annual Report on Form 10-K for the fiscal year ended
December 31, 2013 and the Companys proxy statement relating to the
Companys 2014 annual meeting of stockholders. This report on executive
compensation for is provided by the undersigned members of the Compensation Committee
of the Board of Directors.
Gary K. Willis (Chairman)
George C. McNamee
Douglas Hickey
31
Compensation Committee
Interlocks and Insider Participation
During 2013, Messrs. Willis (Chairman),
McNamee and Hickey served as members of the Compensation Committee. None
of them had any relationship with the Company requiring disclosure under
applicable rules and regulations of the SEC.
PROPOSAL 2: APPROVAL OF
AN AMENDMENT AND RESTATEMENT OF THE COMPANYS 2011
STOCK OPTION AND INCENTIVE PLAN
Summary of the Amendment and Restatement of the 2011
Plan
The stockholders are being
asked to approve an amended and restatement of the 2011 Plan to, among other
things, increase the number of shares of Common Stock authorized for issuance
under the 2011 Plan from 6,500,000 shares to 17,000,000 shares, an increase of 11,500,000
shares. On April 22, 2014, upon the recommendation of the Compensation
Committee, our Board of Directors approved an amendment and restatement of the
2011 Plan, subject to approval from our stockholders at the annual meeting. Our
named executive officers and directors have an interest in this proposal, as
each of them is eligible to receive grants under the 2011 Plan.
Stockholder approval of
the 2011 Plan, as amended and restated, will also serve as a re-approval of the
performance measures set for in the 2011 Plan, as further described below under
the section entitled Qualified Performance-Based Compensation under Code
Section 162(m).
As of April 16, 2014, 965,755
shares of Common Stock were available for issuance under the 2011 Plan. We
currently expect that these shares, together with shares which become available
due to the cancellation of outstanding awards, will be insufficient for awards
to new hires, directors and existing employees.
As of April 16, 2014,
there were stock options to acquire 4,775,485 shares of common stock
outstanding under the Companys equity compensation plans with a weighted
average exercise price of $3.04 and weighted average remaining term of 8.5
years. In addition, as of April 16, 2014, there were 3,343,333 unvested
full-value awards outstanding under the Companys equity compensation plans.
Other than the foregoing, no other awards under the Companys equity
compensation plans were outstanding as of April 16, 2014.
We believe strongly that
the increase of shares issuable under the 2011 Plan is essential to our
continued success. Our employees are our most valuable assets. At our current
and projected growth rate, we anticipate that we will grant shares to support
new employee growth, employee retention efforts, director compensation and
other stock‑based incentive programs. Our Board has determined that it is
in the best interest of the Company and our stockholders to increase the shares
issuable under the 2011 Plan. The Board believes that stock options and other
stock‑based incentive awards can play an important role in the success of
the Company by encouraging and enabling the employees, officers, non-employee
directors and other key persons of the Company and its subsidiaries upon whose
judgment, initiative and efforts the Company largely depends for the successful
conduct of its business to acquire a proprietary interest in the Company. The
Board anticipates that providing such persons with a direct stake in the
Company will assure a closer identification of the interests of such
individuals with those of the Company and its stockholders, thereby stimulating
their efforts on the Companys behalf and strengthening their desire to remain
with the Company.
Vote Required for Approval
A quorum being present, the affirmative
vote of a majority of the shares of Common Stock (treating the Preferred Stock
on an as-converted to Common Stock basis) present in person or represented by
proxy at the Annual Meeting and entitled to vote is required to approve the
Amendment and Restatement of the 2011 Plan. For purposes of determining
whether this proposal has passed,
abstentions
and broker non-votes are not included in the number of votes cast for or
against the
proposal and therefore have no effect on the vote on the proposal
.
32
Recommendation of the
Board
THE BOARD OF DIRECTORS
RECOMMENDS THAT YOU VOTE FOR
THE APPROVAL OF THE
AMENDMENT AND RESTATEMENT OF THE PLUG POWER INC. 2011 STOCK OPTION AND
INCENTIVE PLAN
Summary of the
2011 Stock Option and Incentive Plan
The Board of Directors believes that stock
options and other stock-based incentive awards can play an important role in
the success of the Company by encouraging and enabling the current employees,
consultants, officers and non-employee directors and prospective employees of
the Company and its subsidiaries upon whose judgment, initiative and efforts
the Company largely depends for the successful conduct of its business to
acquire a proprietary interest in the Company. The Board of Directors
anticipates that providing such persons with a direct stake in the Company will
assure a closer identification of the interests of participants in the plan
with those of the Company and its stockholders, thereby stimulating their
efforts on the Companys behalf and strengthening their desire to remain with
the Company.
The following
description of certain features of the Amended and Restated 2011 Stock Option
and Incentive Plan (the Amended and Restated 2011 Plan) is intended to be a
summary only. The summary is qualified in its entirety by the full text of the
Amended and Restated 2011 Plan, as set forth in Appendix A, attached
hereto.
The material features of the Amended and
Restated 2011 Plan are:
-
The maximum number of shares to be issued under
the Amended and Restated 2011 Plan is the sum of (i) 17,000,000 shares of
Common Stock, plus (ii) the number of shares of Common Stock underlying
any grants pursuant to the 2011 Stock Option and Incentive
Plan
(the 2011 Plan) or the 1999
Stock Option and Incentive Plan (the 1999 Plan) that are forfeited,
canceled, repurchased or are terminated (other than by exercise);
-
Grants of full-value awards are
deemed for purposes of determining the number of shares available for future
grants under the Amended and Restated 2011 Plan as an award for 1.5 shares for
each share of common stock subject to the award. Grants of stock options or
stock appreciation rights are deemed to be an award of one share for each share
of common stock subject to the award;
-
Shares tendered or held back for
taxes will not be added back to the reserved pool under the Amended and
Restated 2011 Plan. Upon the exercise of a stock appreciation right, the full
number of shares underlying the Award will be charged to the reserved pool.
Additionally, shares reacquired by the Company on the open market or otherwise
using cash proceeds of option exercises will not be added to the reserved pool;
-
The award of stock options (both
incentive and non-qualified options), stock appreciation rights, restricted
stock, restricted stock units, unrestricted stock, performance and cash-based
awards is permitted;
-
Minimum vesting periods are
required for grants of restricted stock, restricted stock units and performance
share awards;
-
Without stockholder approval, the
exercise price of stock options and stock appreciation rights will not be
reduced and stock options and stock appreciation rights will not be otherwise
repriced through cancellation in exchange for cash, other awards or stock
options or stock appreciation rights with a lower exercise price;
-
Any material amendment to the
Amended and Restated 2011 Plan is subject to approval by our stockholders; and
-
The Amended and Restated 2011 Plan
will expire on July 23, 2024.
33
Based solely on the closing price of our common stock
as reported by the NASDAQ on April 16, 2014 and the maximum number of shares
that would have been available for awards as of such date taking into account
the proposed increase described herein, the maximum aggregate market value of
the common stock that could potentially be issued under the Amended and
Restated 2011 Plan is $88,257,545.40. The shares we issue under the Amended
and Restated 2011 Plan will be authorized but unissued shares or shares that we
reacquire. The shares of common stock underlying any awards that are
forfeited, canceled, reacquired by the Company prior to vesting, satisfied
without any issuance of stock, expire or are otherwise terminated (other than
by exercise) under the Amended and Restated 2011 Plan are added back to the
shares of common stock available for issuance under the Amended and Restated
2011 Plan.
Qualified
Performance-Based Compensation under Code Section 162(m)
To ensure that certain awards granted under the
Amended and Restated 2011 Plan to a Covered Employee (as defined in the
Internal Revenue Code of 1986 (the Code)) qualify as performance-based
compensation under Section 162(m) of the Code, the Amended and Restated
2011 Plan provides that the Compensation Committee may require that the vesting
of such awards be conditioned on the satisfaction of performance criteria that
may include any or all of the following: (1) earnings before interest, taxes,
depreciation and amortization; (2) net income (loss) (either before or after
interest, taxes, depreciation and/or amortization); (3) changes in the market
price of the stock; (4) economic value-added; (5) achievement of sales or
revenue; (6) acquisitions or strategic transactions; (7) product development or
quality; (8) operating income (loss); (9) cash flow (including, but not limited
to, operating cash flow and free cash flow); (10) return on capital, assets,
equity, or investment; (11) total stockholder returns; (12) return on sales;
(13) gross or net profit levels; (14) productivity; (15) expenses; (16)
margins; (17) operating efficiency; (18) capital raising transactions; (19)
debt transactions; (20) working capital; (21) earnings (loss) per share of
common stock; (22) sales or market shares; and (23) number of customers, any of
which may be measured either in absolute terms or as compared to any
incremental increase or as compared to results of a peer group. The
Compensation Committee will select the particular performance criteria within
90 days following the commencement of a performance cycle. Subject to
adjustments for stock splits and similar events, the maximum award granted to
any one individual that is intended to qualify as performance-based compensation
under Section 162(m) of the Code will not exceed 2,500,000 shares of
common stock for any performance cycle and options or stock appreciation rights
with respect to no more than 5,000,000 shares of common stock may be granted to
any one individual during any calendar year period. If a performance-based
award is payable in cash, it cannot exceed $7,500,000 for any performance
cycle.
Administration.
The Compensation Committee of our Board of Directors will administer the
Amended and Restated 2011 Plan. The Compensation Committee of our Board of
Directors is responsible for reviewing all of our executive compensation
plans.
Eligibility.
All of our employees,
consultants and non-employee directors will be eligible to be granted awards
under the Amended and Restated 2011 Plan. An employee, consultant or
non-employee director granted an award will be a participant under the Amended
and Restated 2011 Plan.
Number
of Shares Available for Issuance.
The
maximum number of shares of our common stock that are authorized for issuance
under the 2011 Plan is 6,500,000. The maximum number of shares of our common
stock that will be authorized for issuance under the Amended and Restated 2011
Plan will be 17,000,000. Shares issued under the Amended and Restated 2011 Plan
may be treasury shares or authorized but unissued shares. In the event
the number of shares to be delivered upon the exercise or payment of any award
granted under the Amended and Restated 2011 Plan is reduced for any reason or
in the event that any award (or portion thereof) can no longer be exercised or
paid, the number of shares no longer subject to such award shall be released
from such award and shall thereafter be available under the Amended and
Restated 2011 Plan for the grant of additional awards. Upon the
occurrence of a merger, consolidation, recapitalization, reclassification,
stock split, stock dividend, combination of shares or the like, the plan
administrator may ratably adjust the aggregate number and affected class of
securities available under the Amended and Restated 2011 Plan.
Types
of Awards.
The plan administrator may
grant the following types of awards under the Amended and Restated 2011 Plan:
stock options; restricted stock; or other stock-based awards. Stock options
awarded under the Amended and Restated 2011 Plan may be nonqualified stock
options or incentive stock options under Section 422 of the Internal Revenue
Code of 1986, as amended. With the exception of incentive stock options, the
plan administrator may grant, from time to time, any of the types of awards
under the Amended and Restated 2011 Plan to our employees, consultants and
non-employee directors. Incentive stock options may only be granted to our
employees.
Effect of Awards
. For purposes of determining the number of shares of common stock
available for issuance under the Amended and Restated 2011 Plan, the grant of
any full value award, such as a restricted stock award, restricted stock
unit, unrestricted stock award or performance share will be counted as 1.5
shares for each share of common stock actually subject to the award. The grant
of any stock option or stock appreciation right will be counted for this
purpose as one share from each share of common stock actually subject to the
award.
34
Stock Options.
A stock option is the right to acquire
shares of our common stock at a fixed price for a fixed period of time and
generally is subject to a vesting requirement. To date, as a matter of
practice, options have generally been subject to a three-year vesting period,
with one-third of the total award vesting at the first anniversary of the grant
date and the remainder vesting in equal thirds each anniversary
thereafter. A stock option will be in the form of a nonqualified stock
option or an incentive stock option. The exercise price is set as the market
price on the grant date. The option exercise price may not be reduced
after the date of grant, other than to appropriately reflect change in our
capital structure. The term of a stock option may not exceed ten years or five
years in the case of incentive stock options granted to a 10% owner.
After termination of an optionee, he or she may exercise his or her vested
options for the period of time stated in the stock option agreement. If termination
is for cause, vested options may no longer be exercised. In all other
cases, the vested options will remain exercisable for executives twelve (12)
months. However, an option may not be exercised later than its expiration
date.
Stock Appreciation Rights
. The Compensation Committee may award stock
appreciation rights subject to such conditions and restrictions as the
Compensation Committee may determine. Stock appreciation rights entitle the
recipient to shares of common stock equal to the value of the appreciation in
the stock price over the exercise price. The exercise price is the fair market
value of the common stock on the date of grant. The maximum term of a stock
appreciation right is ten years.
Restricted
Stock.
A restricted stock award
is an award entitling the recipient to acquire, at par value or such other
higher purchase price determined by the administrator, shares of stock subject
to such restrictions and conditions as the administrator may determine at the
time of grant. Conditions may be based on continuing employment (or other
business relationship) and/or achievement of pre-established performance goals
and objectives. The grant of a restricted stock award is contingent on
the participant executing the restricted stock award agreement.
Restricted stock awards are shares of our common stock that are subject to
cancellation, restrictions and vesting conditions, as determined by the plan
administrator. Restricted stock awards generally vest over three years,
beginning with one-third vesting one year after the date of grant, then
pro-rata vesting monthly thereafter. Restricted stock awards are made pursuant
to the 2011 Plan.
Restricted Stock Units
. The Compensation Committee may award restricted
stock units to any participants. Restricted stock units are ultimately payable
in the form of shares of common stock and may be subject to such conditions and
restrictions as the Compensation Committee may determine. These conditions and
restrictions may include the achievement of certain performance goals (as
summarized above) and/or continued employment with the Company through a
specified vesting period. However, except in the case of retirement, death,
disability or a change of control, in the event these awards granted to
employees have a performance-based goal, the restriction period will be at
least one year, and in the event these awards granted to employees have a
time-based restriction, the restriction period will be at least three years,
but vesting can occur incrementally over the three-year period. In the
Compensation Committees sole discretion, it may permit a participant to make
an advance election to receive a portion of his or her future cash compensation
otherwise due in the form of a deferred stock unit award, subject to the
participants compliance with the procedures established by the Compensation
Committee and requirements of Section 409A of the Code.
Unrestricted Stock Awards
. The Compensation Committee may also grant shares of
common stock which are free from any restrictions under the Amended and
Restated 2011 Plan. Unrestricted stock may be granted to any participant in
recognition of past services or other valid consideration and may be issued in
lieu of cash compensation due to such participant.
Performance Share Awards
. The Compensation Committee may grant performance
share awards to any participant which entitle the recipient to receive shares
of common stock upon the achievement of certain performance goals (as
summarized above) and such other conditions as the Compensation Committee shall
determine. These awards granted to employees will have a performance period of
at least one year.
Cash-Based Awards
. The Compensation Committee may grant cash bonuses under the Amended
and Restated 2011 Plan to participants. The cash bonuses may be subject to the
achievement of certain performance goals (as summarized above).
Change of Control Provisions
. The Amended and Restated 2011 Plan provides that
upon the effectiveness of a sale event as defined in the Amended and Restated
2011 Plan, except as otherwise provided by the Compensation Committee in the
award agreement, all stock options and stock appreciation rights shall become
fully exercisable and the restrictions and conditions on all such other awards
with time-based conditions will automatically be deemed waived. Awards with
conditions and restrictions relating to the attainment of performance goals may
become vested and non-forfeitable in connection with a sale event in the Compensation
Committees discretion. In addition, in the case of a sale event in which the
Companys stockholders will receive cash consideration, the Company may make or
provide for a cash payment to participants holding options and stock
appreciation rights equal to the difference between the per share cash
consideration and the exercise price of the options or stock appreciation
rights in exchange for the cancellation thereto.
35
Adjustments for Stock Dividends, Stock Splits, Etc.
The Amended and Restated 2011 Plan requires the
Compensation Committee to make appropriate adjustments to the number of shares
of common stock that are subject to the Amended and Restated 2011 Plan, to
certain limits in the Amended and Restated 2011 Plan, and to any outstanding
awards to reflect stock dividends, stock splits, extraordinary cash dividends
and similar events.
Tax Withholding
.
Participants in the Amended and Restated 2011 Plan are responsible for the
payment of any federal, state or local taxes that the Company is required by
law to withhold upon the exercise of options or stock appreciation rights or
vesting of other awards. Subject to approval by the Compensation Committee,
participants may elect to have the minimum tax withholding obligations
satisfied by authorizing the Company to withhold shares of common stock to be
issued pursuant to the exercise or vesting of such award.
Amendments and Termination
. The Board may at any time amend or discontinue the
Amended and Restated 2011 Plan and the Compensation Committee may at any time
amend or cancel any outstanding award for the purpose of satisfying changes in
the law or for any other lawful purpose. However, no such action may adversely
affect any rights under any outstanding award without the holders consent. To
the extent required under the rules of the NASDAQ, any amendments that
materially change the terms of the Amended and Restated 2011 Plan will be
subject to approval by our stockholders. Amendments shall also be subject to approval
by our stockholders if and to the extent determined by the Compensation
Committee to be required by the Code to preserve the qualified status of
incentive options or to ensure that compensation earned under the Amended and
Restated 2011 Plan qualifies as performance-based compensation under
Section 162(m) of the Code.
Effective Date of Amended and Restated 2011 Plan
. The Board adopted the Amended and Restated 2011
Plan on April 22, 2014. Awards of incentive options may be granted under the
Amended and Restated 2011 Plan until April 21, 2024. No other awards may be
granted under the Amended and Restated 2011 Plan after the date that is 10
years from the date of stockholder approval or July 22, 2024.
Because the grant
of awards under the Amended and Restated 2011 Plan is within the discretion of
the Compensation Committee, we cannot determine the dollar value or number of
shares of common stock that will in the future be received by or allocated to
any participant in the Amended and Restated 2011 Plan.
Tax Aspects Under the
Code
The following is a summary of the principal federal
income tax consequences of certain transactions under the Amended and Restated
2011 Plan. It does not describe all federal tax consequences under the Amended
and Restated 2011 Plan, nor does it describe state or local tax consequences.
Incentive Options
. No taxable income is generally realized by the optionee upon the
grant or exercise of an incentive option. If shares of common stock issued to
an optionee pursuant to the exercise of an incentive option are sold or
transferred after two years from the date of grant and after one year from the
date of exercise, then (i) upon sale of such shares, any amount realized
in excess of the option price (the amount paid for the shares) will be taxed to
the optionee as a long-term capital gain, and any loss sustained will be a
long-term capital loss, and (ii) the Company will not be entitled to any
deduction for federal income tax purposes. The exercise of an incentive option
will give rise to an item of tax preference that may result in alternative
minimum tax liability for the optionee.
If shares of common stock acquired upon the exercise
of an incentive option are disposed of prior to the expiration of the two-year
and one-year holding periods described above (a disqualifying disposition),
generally (i) the optionee will realize ordinary income in the year of
disposition in an amount equal to the excess (if any) of the fair market value
of the shares of common stock at exercise (or, if less, the amount realized on
a sale of such shares of common stock) over the option price thereof, and
(ii) we will be entitled to deduct such amount. Special rules apply where
all or a portion of the exercise price of the incentive option is paid by
tendering shares of common stock.
If an incentive option is exercised at a time when it
no longer qualifies for the tax treatment described above, the option is
treated as a non-qualified option. Generally, an incentive option will not be
eligible for the tax treatment described above if it is exercised more than
three months following termination of employment (or one year in the case of
termination of employment by reason of disability). In the case of termination
of employment by reason of death, the three-month rule does not apply.
36
Non-Qualified Options
. No income is realized by the optionee at the time
the option is granted. Generally (i) at exercise, ordinary income is
realized by the optionee in an amount equal to the difference between the
option price and the fair market value of the shares of common stock on the
date of exercise, and we receive a tax deduction for the same amount, and
(ii) at disposition, appreciation or depreciation after the date of
exercise is treated as either short-term or long-term capital gain or loss
depending on how long the shares of common stock have been held. Special rules
apply where all or a portion of the exercise price of the non-qualified option
is paid by tendering shares of common stock. Upon exercise, the optionee will
also be subject to Social Security taxes on the excess of the fair market value
over the exercise price of the option.
Other Awards
.
The Company generally will be entitled to a tax deduction in connection with an
award under the Amended and Restated 2011 Plan in an amount equal to the
ordinary income realized by the participant at the time the participant
recognizes such income. Participants typically are subject to income tax and
recognize such tax at the time that an award is exercised, vests or becomes
non-forfeitable, unless the award provides for a further deferral.
Parachute Payments
. The vesting of any portion of an option or other
award that is accelerated due to the occurrence of a change in control (such as
a sale event) may cause a portion of the payments with respect to such
accelerated awards to be treated as parachute payments as defined in the
Code. Any such parachute payments may be non-deductible to the Company, in
whole or in part, and may subject the recipient to a non-deductible 20 percent
federal excise tax on all or a portion of such payment (in addition to other
taxes ordinarily payable).
Limitation on Deductions
. Under Section 162(m) of the Code, the
Companys deduction for certain awards under the Amended and Restated 2011 Plan
may be limited to the extent that the Chief Executive Officer or other
executive officer whose compensation is required to be reported in the summary
compensation table (other than the Principal Financial Officer) receives
compensation in excess of $1 million a year (other than performance-based
compensation that otherwise meets the requirements of Section 162(m) of
the Code). The Amended and Restated 2011 Plan is structured to allow certain
awards to qualify as performance-based compensation.
37
Equity Compensation
Plan Information
The following table provides information as of December
31, 2013 regarding the shares of Common Stock that may be issued upon the
exercise of options, restricted stock and common stock warrants under the Companys
1999 Stock Option and Incentive Plan and the Companys 2011 Stock Option and
Incentive Plan.
|
Equity Compensation Plan
Information
|
|
Number
of securities to be
issued upon exercise of
outstanding options, warrants and
rights
|
Weighted
Average
exercise price of
outstanding options,
warrants and rights
|
Number
of securities
remaining available for
future issuance under equity
compensation plan (excluding securities
referenced in
column (a))
|
|
|
|
|
|
(a)
|
(b)
|
(c)
|
|
|
|
|
Equity
compensation plans approved by security holders:
|
5,353,328(1)
|
2.83
|
1,148,924
(2)
|
Equity
compensation plans not approved by security holders:
|
400,000
(3)
|
0.57
|
--
|
|
|
|
|
Total
|
5,753,328
|
2.68
|
1,148,924
|
|
(1)
|
Represents 725,051 outstanding options issued under the
1999 Plan, 3,978,275 outstanding options issued under the 2011 Plan, and
650,002 shares of restricted stock issued under the 2011 Plan.
|
|
|
|
|
(2)
|
Includes shares available for future issuance under
the 2011 Plan.
|
|
|
|
|
(3)
|
Included in equity compensation plans not approved
by security holders are shares granted to new employees for key positions
within the company. As such, no specific shares have been allocated for
this purpose, but rather shares are approved by the companys Board of
Directors on an applicant by applicant basis. To date, we have 400,000
options outstanding in this category.
|
Recommendation of the
Board
THE
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR
THE
APPROVAL OF THE AMENDED AND RESTATED 2011 STOCK OPTION AND INCENTIVE PLAN
PROPOSAL 3:
APPROVAL OF THE THIRD CERTIFICATE OF AMENDMENT OF THE AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION OF THE COMPANY TO INCREASE THE NUMBER OF
AUTHORIZED SHARES OF COMMON STOCK
Summary
The
Board of Directors has adopted a resolutions approving and recommending that
the stockholders approve an amendment of the Amended and Restated Certificate
of Incorporation of the Company to increase the number of authorized shares of
Common Stock from 245,000,000 shares to 450,000,000 shares. The authorized capital
stock of the Company currently consists of 245,000,000 shares of Common Stock
and 5,000,000 shares of undesignated preferred stock, par value $0.01 per
share. If the proposed amendment is approved, the authorized capital stock of
the Company will consist of 450,000,000 shares of Common Stock and 5,000,000
shares of undesignated preferred stock, par value $0.01 per share. The form of
the Third Certificate of Amendment of the Certificate of Incorporation of the
Company to increase the number of authorized shares of Common Stock is attached
as Appendix B to this Proxy Statement.
The
purpose of the proposed amendment is to provide additional authorized shares of
Common Stock for possible use in connection with future financings, investment
opportunities, acquisitions, employee benefit plans or for other corporate
purposes. The Company has no commitments at this time for the issuance of the
additional authorized Common Stock but desires to position itself to do so when
needs arise and market conditions warrant.
If
the proposed amendment is approved by the stockholders, 450,000,000 shares of
Common Stock will be authorized for issuance and the additional authorized
Common Stock may be issued by the Company without any further action by the
stockholders. The issuance of additional authorized shares, may, among other
things, have a dilutive effect on earnings per share and on the equity and
voting power of existing holders of Common Stock. In addition, such issuance
may also be deemed to have an antitakeover effect by making it more difficult
to obtain stockholder approval of various actions, such as a merger or removal
of management. Although the Board of Directors has no present intention of
issuing additional shares for such purposes, the proposed increase in the
number of authorized shares could also enable the Board of Directors to render
more difficult or discourage an attempt by another person or entity to obtain
control of the Company.
Vote Required for Approval
A quorum being present, the affirmative
vote of the holders of a majority of the outstanding shares of the Common Stock
(treating the Preferred Stock on an as-converted to Common Stock basis) is
required for the approval of the Third Certificate of Amendment of the
Certificate of Incorporation of the Company. For purposes of determining
whether this proposal has passed, abstentions and broker non-votes will not be
counted as having been voted for the proposal and therefore will have the same
effect as negative votes
Recommendation of the
Board
THE BOARD OF DIRECTORS
RECOMMENDS THAT YOU VOTE FOR THE THIRD CERTIFICATE OF AMENDMENT OF THE
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF THE COMPANY TO INCREASE
THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK.
39
PROPOSAL
4: ADVISORY VOTE ON EXECUTIVE
COMPENSATION
Overview
In accordance with Section 14A of the
Exchange Act, we are providing the Companys stockholders the opportunity to
vote on a non-binding, advisory resolution to approve the compensation of our
Named Executive Officers, which is described in the section titled
Compensation Discussion and Analysis in this Proxy Statement. Accordingly,
the following resolution will be submitted for a stockholder vote at the 2014
Annual Meeting:
RESOLVED, that the stockholders of Plug Power Inc.
(the Company) approve, on an advisory basis, the overall compensation of the
Companys Named Executive Officers, as disclosed pursuant to Item 402 of
Regulation S-K,
in the
Compensation Discussion and Analysis section, compensation tables and narrative
discussion set forth in the Proxy Statement for this Annual Meeting.
As described in the
section titled Compensation Discussion and Analysis, our executive
compensation program is designed to (1) attract and retain talented and
experienced executives, (2) motivate and reward executives whose knowledge,
skills and performance are critical to our success, (3) provide a competitive
compensation package which is weighted towards pay-for-performance and in which
total compensation is primarily determined by Company and individual results
and the creation of shareholder value, (4) ensure fairness among the executive
management team by recognizing the contributions each executive makes to our
success, and (5) motivate our executives to manage our business to meet our
short- and long-term objectives and reward them for meeting these objectives.
In order to align executive compensation with the interests of our
stockholders, an important portion of compensation for our Named Executive
Officers is at risk, or contingent upon the successful achievement of annual
as well as long-term strategic corporate goals that we believe will drive
stockholder value. Stockholders are urged to read the Compensation Discussion
and Analysis section of this Proxy Statement, which more thoroughly discusses
how our compensation policies and procedures implement our compensation
philosophy and objectives. The Compensation Committee and the Board believe
that these policies and procedures are effective in implementing our
compensation philosophy and in achieving its objectives.
This vote is only
advisory and will not be binding upon the Company or the Board. However, the
Board values constructive dialogue on executive compensation and other
important governance topics with the Companys stockholders and encourages all
stockholders to vote their shares on this matter.
Vote Required for
Approval
A quorum being
present, the affirmative vote of a majority of the shares of Common Stock
(treating the Preferred Stock on an as-converted to Common Stock basis) present
in person or represented by proxy at the Annual Meeting and entitled to vote is
required to approve this resolution. Even though this vote will neither be
binding on the Company or the Board nor will it create or imply any change in
the fiduciary duties of, or impose any additional fiduciary duty on, the
Company or the Board, the Compensation Committee will take into account the
outcome of the vote when considering future executive compensation decisions. For
purposes of determining whether this proposal has passed,
abstentions and broker non-votes are not included in
the number of votes cast for or
against the proposal and therefore have no effect on
the vote on the proposal
.
Recommendation of the Board
THE
BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE APPROVAL OF THE OVERALL
COMPENSATION OF THE COMPANYS NAMED EXECUTIVE OFFICERS.
UNLESS
OTHERWISE INSTRUCTED, PROXIES SOLICITED BY THE BOARD WILL BE VOTED FOR THIS
RESOLUTION.
40
PROPOSAL 5: RATIFICATION OF APPOINTMENT OF
INDEPENDENT AUDITORS
Introduction
The Audit Committee of the Board of Directors has
appointed the firm of KPMG, independent auditors, to serve as independent
auditors for its 2014 fiscal year. KPMG has served as the Companys independent
auditing firm since December 3, 2001. The Audit Committee reviewed and
discussed its selection of, and the performance of, KPMG for its 2014 fiscal
year. As a matter of good corporate governance, the Audit Committee has
determined to submit its selection to stockholders for ratification. If the
selection of auditors is ratified, the Audit Committee in its discretion may select
a different independent auditing firm at any time during the year if it
determines that such a change would be in the best interests of the Company and
its stockholders.
The Audit Committee of the Board of Directors has
implemented procedures under the Companys Audit Committee pre-approval policy
for audit and non-audit services (the Pre-Approval Policy) to ensure that all
audit and permitted non-audit services to be provided to the Company have been
pre-approved by the Audit Committee. Specifically, the Audit Committee
pre-approves the use of KPMG for specific audit and non-audit services, within
approved monetary limits. If a proposed service has not been pre-approved
pursuant to the Pre-Approval Policy, then it must be specifically pre-approved by
the Audit Committee before it may be provided by KPMG. Any pre-approved
services exceeding the pre-approved monetary limits require specific approval
by the Audit Committee. For additional information concerning the Audit
Committee and its activities with KPMG, see Committees and Meetings of the
Board of Directors and Audit Committee Report above.
Representatives of KPMG attended all five meetings of
the Audit Committee in-person in 2013. We expect that a representative of KPMG
will attend the Annual Meeting, and the representative will have an opportunity
to make a statement if he or she so desires. The representative will also be
available to respond to appropriate questions from stockholders.
Vote
Required for Approval
A quorum being present, the affirmative vote of a
majority of the shares of Common Stock (treating the Preferred Stock on an
as-converted to Common Stock basis) present in person or represented by proxy
at the Annual Meeting and entitled to vote is required for the ratification of
KPMG as the Companys independent auditors for 2014. For purposes of
determining whether this proposal has passed,
abstentions and broker non-votes are not included in the number of votes
cast for or
against the proposal and therefore have no effect on the
vote on the proposal
.
Recommendation of the Board
THE BOARD OF DIRECTORS RECOMMENDS A
VOTE FOR THE RATIFICATION OF KPMG LLP AS PLUG POWER INC.S INDEPENDENT
AUDITORS FOR 2014.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
The
Companys Board of Directors has adopted a related party transaction policy
that requires the Companys General Counsel, together with outside counsel as
necessary, to evaluate potential transaction between the Company and any
related party prior to entering into any such transaction. Certain related
party transactions may require the approval of the Board of Directors and its
Audit Committee. The policy defines a related party as: (i) the
Companys directors or executive officers, (ii) the Companys director
nominees, (iii) security holders known to the Company to beneficially own
more than 5% of any class of the Companys voting securities, or (iv) the
immediate family members of any of the persons listed in items (i)
(iii). A persons immediate family includes such persons child, stepchild,
parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law, sister-in-law or any other person (other than
a tenant or employee) sharing the household of such person.
Other than as otherwise disclosed herein, since
January 1, 2013, the Company has not entered into, and there is not
currently proposed, any transactions or series of similar transactions
involving an amount in excess of $120,000 in which any related party had or
will have a direct or indirect material interest.
The
Company and Axane, S.A. (Axane) , a subsidiary of Air Liquide S.A. (Air
Liquide), are partners in Hypulsion S.A.S. (the JV), a joint venture to
develop and sell hydrogen fuel cell systems for the European material handling
market. The Company currently owns 20% and Axane owns 80% of the JV. Air
Liquide is also the parent company of Air Liquide Investissements dAvenir et
de Démonstration (Air Liquide Investment). Air Liquide Investment
beneficially owns approximately 6.6% of our common stock.
In
connection with the formation of the JV in February 2012, the Company and Axane
entered into a Master and Shareholders Agreement providing for the terms of
the JV, and the Company and the JV entered into a License Agreement (the
License Agreement).
41
Under
the License Agreement, the Company granted to the JV a royalty-free license to
certain intellectual property in the field of integrated hydrogen fuel cell
systems for the material handling market (the License). The License is
exclusive as to the territories of Albania, Austria, Belgium, Bosnia and
Herzegovina, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Finland,
France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Liechtenstein,
Luxemburg, Republic of Macedonia, Malta, Montenegro, the Netherlands, Norway,
Poland, Portugal, Romania, Serbia, Slovakia, Slovenia, Spain, Sweden,
Switzerland and the United Kingdom (the Territory). If the Company sells its
entire equity interest in the JV, the License becomes non-exclusive one year
after such sale. Further, the License becomes non-exclusive, and the Company
may terminate the License, upon any bankruptcy or dissolution of the JV. Under
the License Agreement, the Company receives a royalty-free license back to
certain intellectual property of the JV in the field of integrated hydrogen
fuel cell systems for the material handling market outside of the Territory.
The term of the License runs until the expiration of the last item of licensed
intellectual property or ninety-nine years, whichever is longer. The License
terminates in the event that Axane fails to make any required contribution to
the JV.
On
May 8, 2013, the Company entered into a Securities Purchase Agreement with
Air Liquide Investment, pursuant to which the Company sold to Air Liquide
Investment 10,431 shares of the Companys Series C Redeemable Convertible
Preferred Stock, par value $0.01 per share (the Series C Preferred Stock),
for an aggregate purchase price of approximately $2.6 million (Euro 2 million)
in cash.
Under
the terms of the investment, for so long as Air Liquide Investment holds any
shares of Series C Preferred Stock, Air Liquide Investment is entitled to
designate one director to the Companys Board of Directors. In the event the
Series C Preferred Stock is converted into shares of Common Stock and Air
Liquide Investment continues to hold at least 5% of the outstanding shares of
Common Stock or 50% of the shares of Common Stock held by Air Liquide Investment
on an as-converted basis immediately following the issuance of the Series C
Preferred Stock, Air Liquide Investment will continue to be entitled to
designate one director to the Companys Board of Directors. Air Liquide
Investment also has the right to participate in certain private equity
financings by the Company.
In
connection with the Series C Preferred Stock investment, Axane purchased from
the Company a 25% ownership interest in the JV for a cash purchase price of
$3.3 million (Euro 2.5 million). The Company currently owns 20% and Axane owns
80% of the JV. The Company has the right to purchase a 60% ownership interest
in the JV from Axane in 2018 at a formula price. If the Company does not
exercise its purchase right, Axane has the right to buy the Companys remaining
20% interest at a formula price.
In
connection with the Series C Preferred Stock investment, the Company and the JV
entered into an engineering service agreement under which, among other things,
the Company provides the JV with engineering and technical services. During
2013, the JV made payments to the Company totaling $3,009,923 for engineering,
technical, consulting and related services. In addition, during 2013, the JV
paid the Company a total of $494,492 for the purchase of fuel cell systems and
parts.
PRINCIPAL STOCKHOLDERS
The following table sets forth information
regarding the beneficial ownership of Common Stock as of May 22, 2014 (except
as otherwise indicated) by:
-
all persons known by us to have
beneficially owned 5% or more of the Common Stock;
-
each director of the Company;
-
the named executive officers; and
-
all directors and executive
officers as a group.
42
The beneficial ownership of the
stockholders listed below is based on publicly available information and from
representations of such stockholders.
|
|
|
|
|
|
|
|
|
Name and Address of Beneficial Owner (1)
|
|
Shares Beneficially Owned (2)
|
|
|
Number
|
|
|
Percentage (%)
|
|
Air
Liquide S.A. (3)
|
|
|
11,105,204
|
|
|
|
6.6
|
%
|
Heights
Capital Management (4)
|
|
|
10,000,000
|
|
|
|
6.0
|
%
|
George
C. McNamee (5)
|
|
|
845,155
|
|
|
|
*
|
|
Andrew
Marsh (6)
|
|
|
628,061
|
|
|
|
*
|
|
Gary
K. Willis (7)
|
|
|
316,175
|
|
|
|
*
|
|
Larry
G. Garberding (8)
|
|
|
270,311
|
|
|
|
*
|
|
Maureen
O. Helmer (9)
|
|
|
248,681
|
|
|
|
*
|
|
Erik
J. Hansen (10)
|
|
|
141,821
|
|
|
|
*
|
|
Gerard
L. Conway, Jr. (11)
|
|
|
123,143
|
|
|
|
*
|
|
Johannes
Minoh Roth (12)
|
|
|
100,146
|
|
|
|
*
|
|
Douglas
Hickey (1)
|
|
|
91,000
|
|
|
|
*
|
|
Evgeny
Miroshnichenko (14)
|
|
|
61,195
|
|
|
|
*
|
|
Jill
McCoskey (15)
|
|
|
34,104
|
|
|
|
*
|
|
Gerald
A. Anderson
|
|
|
20,982
|
|
|
|
*
|
|
Adrian
Corless
|
|
|
10,372
|
|
|
|
*
|
|
Xavier
Pontone
|
|
|
2,296
|
|
|
|
*
|
|
Gregory
Kenausis
|
|
|
2,296
|
|
|
|
*
|
|
Keith
Schmid
|
|
|
2,103
|
|
|
|
*
|
|
David
Waldek
|
|
|
180
|
|
|
|
*
|
|
All
executive officers and directors as a group (17 persons) (16)
|
|
|
2,898,021
|
|
|
|
1.
|
7%
|
*
|
Represents
less than 1% of the outstanding shares of Common Stock
|
1)
|
Unless
otherwise indicated by footnote, the mailing address for each stockholder is
c/o Plug Power Inc., 968 Albany Shaker Road, Latham, New York 12110.
|
2)
|
The
number of shares beneficially owned by each stockholder is determined under
rules promulgated by the SEC and includes voting or investment power with
respect to securities. Under Rule 13d-3 under the Securities Exchange Act of
1934, as amended, beneficial ownership includes any shares to which the
individual or entity has sole or shared voting power or investment power and
includes any shares as to which the individual or entity has the right to
acquire beneficial ownership within 60 days of May 22, 2014, through the
exercise of any warrant, stock option or other right. The inclusion in this
table of such shares, however, does not constitute an admission that the
named stockholder is a direct or indirect beneficial owner of such shares.
The number of shares of Common Stock outstanding used in calculating the
percentage for each listed person includes the shares of Common Stock
underlying options, warrants or other rights held by such person that are
exercisable within 60 days of May 22, 2014 but excludes shares of Common
Stock underlying options, warrants or other rights held by any other person.
Percentage of beneficial ownership is based on 167,125,648 shares of Common
Stock outstanding as of May 22, 2014. Unless otherwise indicated, each
of the stockholders has sole voting and investment power with respect to the
shares of Common Stock beneficially owned by the stockholder.
|
43
3)
|
Includes
39,324 shares of Common Stock and 11,965,880 shares of Common Stock issuable
upon conversion of shares of the Companys Series C Redeemable Convertible
Preferred Stock. All shares are held directly by Air Liquide Investissements
dAvenir et de Démonstration, a corporation incorporated under the laws of
France having its registered office at 6, rue Cognacq-Jay 75007 Paris, France
and its principal office at 104, rue du Faubourg Saint-Antoine 75012 Paris,
France. Air Liquide Investissements dAvenir et de Démonstration is a wholly
owned subsidiary of Air Liquide S.A., a corporation incorporated under the
laws of France, having its principal office at 75, Quai dOrsay, 75321 Paris,
France. Information is partly based on a Schedule 13G filed with the SEC on
March 19, 2014.
|
4)
|
Heights
Capital Management, Inc. is the investment manager to Capital Ventures
International and as such may exercise voting and dispositive power over
these shares. Information is based on a Schedule 13G filed with the SEC on
January 10, 2014. The address of the principal business office of
Capital Ventures International is P.O. Box 897, Regatta Office Park, West Bay
Road, Grand Cayman, Cayman Islands, British West Indies. The address of the
principal business office of Heights Capital Management, Inc. is 101
California Street, Suite 3250, San Francisco, California 94111.
|
5)
|
Includes
132,000 shares of Common Stock issuable upon exercise of outstanding options
and 96,774 shares of Common Stock issuable upon exercise of outstanding
warrants.
|
6)
|
Includes
280,183 shares of Common Stock issuable upon exercise of outstanding options
and 48,387 shares of Common Stock issuable upon exercise of outstanding
warrants.
|
7)
|
Includes
111,100 shares of Common Stock issuable upon exercise of outstanding options.
|
8)
|
Includes
119,500 shares of Common Stock issuable upon exercise of outstanding options.
|
9)
|
Includes
106,700 shares of Common Stock issuable upon exercise of outstanding options.
|
10)
|
Includes
79,583 shares of Common Stock issuable upon exercise of outstanding options.
|
11)
|
Includes
84,483 shares of Common Stock issuable upon exercise of outstanding options.
|
12)
|
Includes
75,000 shares of Common Stock issuable upon exercise of outstanding options.
|
13)
|
Includes
91,000 shares of Common Stock issuable upon exercise of outstanding options.
|
|
|
14)
|
Includes
10,000 shares of Common Stock issuable upon exercise of outstanding options.
|
15)
|
Includes
29,433 shares of Common Stock issuable upon exercise of outstanding options.
|
16)
|
Includes
1,118,982 shares of Common Stock issuable upon exercise of outstanding
options and 145,161 shares of Common Stock issuable upon exercise of
outstanding warrants.
|
SECTION
16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of
the Securities Exchange Act of 1934, as amended, requires the Companys
officers, as defined by Section 16, and directors, and persons who own more
than 10% of the Companys outstanding shares of Common Stock (collectively,
Section 16 Persons), to file initial reports of ownership and reports of
changes in ownership with the SEC. Section 16 Persons are required by SEC
regulations to furnish the Company with copies of all Section 16(a) forms they
file.
Form
4s were filed late on April 3, 2013 for each of Messrs. McNamee,
Garberding, Hickey, Willis and Miroshnichenko and Ms. Helmer for stock
grants made pursuant to the Companys Director Compensation Policy and in
accordance with the Companys 2011 Stock Option and Incentive Plan.
EXPENSES OF SOLICITATION
The Company will pay the entire expense of soliciting
proxies for the Annual Meeting. The Company has
retained MacKenzie Partners, Inc. to consult in the solicitation for a fee of
approximately $40,000. In addition to solicitations by mail, certain
directors, officers and regular employees of the Company (who will receive no
compensation for their services other than their regular compensation) may
solicit proxies personally, by telephone, by e-mail or by other form of
electronic communication. Banks, brokerage houses, custodians, nominees and
other fiduciaries have been requested to forward proxy materials to the
beneficial owners of shares held of record by them and such custodians will be
reimbursed for their reasonable expenses by the Company.
44
SUBMISSION OF STOCKHOLDER PROPOSALS FOR 2015 ANNUAL
MEETING
Any stockholder proposals submitted
pursuant to Exchange Act Rule 14a-8 and intended to be presented at the 2015
Annual Meeting of Stockholders must be received by the Company on or before February
12, 2015 to be eligible for inclusion in the Companys proxy statement and form
of proxy to be distributed by the Board of Directors in connection with that
meeting. Any such proposal should be mailed to: Corporate Secretary, Plug Power
Inc., 968 Albany Shaker Road, Albany, New York 12110. Such proposal must also
comply with the requirements as to form and substance established by the SEC
for such a proposal to be included in the proxy statement and form of proxy.
Any stockholder proposals (including recommendations of
nominees for election to the Board of Directors) intended to be presented at
the Companys 2015 Annual Meeting of Stockholders, other than a stockholder
proposal submitted pursuant to Exchange Act Rule 14a-8, must be received in
writing at the principal executive office of the Company not less than 90 days
nor more than 120 days prior to July 23, 2015 which dates are April 24, 2015
and March 25, 2015 respectively. If the date of the 2015 Annual Meeting is
subsequently moved more than 30 days before or more than 60 days after July 23,
2015 such proposals must be received not later than the close of business on
the later of the 90
th
day prior to the scheduled date of the 2015
Annual Meeting or the 10
th
day following the day on which publish
announcement of the date of the 2015 Annual Meeting is first made, as set forth
in the Companys By-laws. Stockholder proposals must include all supporting
documentation required by the Companys By-laws. Proxies solicited by the Board
of Directors will confer discretionary voting authority with respect to these
proposals, subject to SEC rules governing the exercise of this authority.
DELIVERY OF PROXY MATERIALS AND ANNUAL REPORT
Electronic Delivery
The notice of Annual Meeting and Proxy Statement and
2013 Annual Report is available at www.proxyvote.com. Stockholders can
elect to receive paper copies of the Annual Report and Proxy Statement in the
mail by visiting at www.plugpower.com, by writing to Investor Relations at Plug
Power Inc., 968 Albany Shaker Road, Latham, NY 12110 or by contacting the
Company at (518) 782-7700.
Many brokerage firms and banks are also offering
electronic proxy materials to their clients. If you are a beneficial owner of Plug
Power stock, you may contact that broker or bank to find out whether this
service is available to you. If your broker or bank uses Broadridge Investor
Communications, you can sign up to receive electronic proxy materials at
www.proxyvote.com.
Householding is the term used to describe the
practice of delivering one copy of a document to a household of shareholders
instead of delivering one copy of a document to each shareholder in the
household. Stockholders who share a common address and who have not opted out
of the householding process should receive a single copy of the Notice of
Internet Availability of Proxy Materials for each account. If you received more
than one copy of the Notice of Internet Availability of Proxy Materials, you
may elect to household in the future; if you received a single copy of the
Notice of Internet Availability of Proxy Materials, you may opt out of
householding in the future, in either case, by writing to the Company at the
following address, Plug Power Inc., 968 Albany Shaker Road, Albany, New York
12110, or by calling the Company at (518) 782-7700.
In any event, you may obtain a copy of this Proxy
Statement by writing to the Company at the following address: Plug Power Inc.,
968 Albany Shaker Road, Albany, New York 12110.
ANNUAL REPORT ON FORM 10-K
The Companys 2013 Annual Report was
furnished to stockholders with this Proxy Statement. Upon request, the Company
will furnish without charge a copy of the Companys Annual Report on Form 10-K,
which has been filed with the SEC. Stockholders may receive a copy of the Form
10-K by:
(1)
|
Writing to Investor
Relations at Plug Power Inc., 968 Albany Shaker Road, Latham, NY 12110;
|
(2)
|
Calling (518) 782-7700;
|
(3)
|
Accessing the Companys
website at
www.plugpower.com
; or
|
(4)
|
Accessing the SECs website at
www.sec.gov
.
|
APPENDIX A
AMENDED AND RESTATED 2011 STOCK OPTION AND INCENTIVE
PLAN
PLUG
POWER INC.
2011
STOCK OPTION AND INCENTIVE PLAN
AS AMENDED AND RESTATED
GENERAL PURPOSE OF THE PLAN; DEFINITIONS
The
name of the plan is the Plug Power Inc. 2011 Stock Option and Incentive Plan,
as amended and restated (the Plan). The purpose of the Plan is to encourage
and enable the officers, employees, Non-Employee Directors and other key
persons (including consultants and prospective employees) of Plug Power Inc.
(the Company) and its Subsidiaries upon whose judgment, initiative and
efforts the Company largely depends for the successful conduct of its business
to acquire a proprietary interest in the Company. It is anticipated that
providing such persons with a direct stake in the Companys welfare will assure
a closer identification of their interests with those of the Company and its
stockholders, thereby stimulating their efforts on the Companys behalf and
strengthening their desire to remain with the Company.
The
following terms shall be defined as set forth below:
Act
means the
Securities Act of 1933, as amended, and the rules and regulations thereunder.
Administrator
means either
the Board or the compensation committee of the Board or a similar committee
performing the functions of the compensation committee and which is comprised
of not less than two Non‑Employee Directors who are independent.
Award
or
Awards,
except where referring to a particular category of grant under the Plan, shall
include Incentive Stock Options, Non-Qualified Stock Options, Stock Appreciation
Rights, Deferred Stock Awards, Restricted Stock Awards, Unrestricted Stock
Awards, Cash-Based Awards and Performance Share Awards.
Award
Agreement
means a written or electronic agreement setting forth the terms and provisions
applicable to an Award granted under the Plan. Each Award Agreement is subject
to the terms and conditions of the Plan.
Board
means the Board
of Directors of the Company.
Cash-Based
Award
means an Award entitling the recipient to receive a cash-denominated payment.
Code
means the
Internal Revenue Code of 1986, as amended, and any successor Code, and related
rules, regulations and interpretations.
Covered
Employee
means an employee who is a Covered Employee within the meaning of
Section 162(m) of the Code.
Deferred
Stock Award
means an Award of phantom stock units to a grantee.
Effective
Date
means the date on which the amended and restated Plan is approved by
stockholders as set forth in Section 20.
Exchange
Act
means the Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder.
46
Fair
Market Value
of the Stock on any given date means the fair market value of the Stock
determined in good faith by the Administrator; provided, however, that if the
Stock is admitted to quotation on the National Association of Securities
Dealers Automated Quotation System (NASDAQ), NASDAQ Capital Market or another
national securities exchange, the Fair Market Value of the Stock shall be the
closing price of the Stock on such exchange on such date. If there are no
market quotations for such date, the determination shall be made by reference
to the last date preceding such date for which there are market quotations.
Incentive
Stock Option
means any Stock Option designated and qualified as an incentive stock option
as defined in Section 422 of the Code.
Non-Employee
Director
means a member of the Board who is not also an employee of the Company or any
Subsidiary.
Non-Qualified
Stock Option
means any Stock Option that is not an Incentive Stock Option.
Option
or
Stock
Option
means any option to purchase shares of Stock granted pursuant to
Section 5.
Performance-Based
Award
means any Restricted Stock Award, Deferred Stock Award, Performance Share Award
or Cash-Based Award granted to a Covered Employee that is intended to qualify
as performance-based compensation under Section 162(m) of the Code and the
regulations promulgated thereunder.
Performance
Criteria
means the criteria that the Administrator selects for purposes of establishing
the Performance Goal or Performance Goals for an individual for a Performance
Cycle. The Performance Criteria (which shall be applicable to the
organizational level specified by the Administrator, including, but not limited
to, the Company or a unit, division, group, or Subsidiary of the Company) that
will be used to establish Performance Goals are limited to the following:
earnings before interest, taxes, depreciation and amortization, net income
(loss) (either before or after interest, taxes, depreciation and/or
amortization), changes in the market price of the Stock, economic value-added,
sales or revenue, acquisitions or strategic transactions, achievement of
project development milestones, operating income (loss), cash flow (including,
but not limited to, operating cash flow and free cash flow), return on capital,
assets, equity, or investment, total stockholder returns, return on sales,
gross or net profit levels, productivity, expense, margins, operating
efficiency, capital raising transactions, debt transactions, working capital,
earnings (loss) per share of Stock, sales or market shares and number of
customers, any of which may be measured either in absolute terms or as compared
to any incremental increase or as compared to results of a peer group.
Performance
Cycle
means a calendar year period over which the attainment of one or more
Performance Criteria will be measured for the purpose of determining a
grantees right to and the payment of a Restricted Stock Award, Deferred Stock
Award, Performance Share Award or Cash-Based Award.
Performance
Goals
means, for a Performance Cycle, the specific goals established in writing by
the Administrator for a Performance Cycle based upon the Performance Criteria.
Performance
Share Award
means an Award entitling the recipient to acquire shares of Stock upon the
attainment of specified Performance Goals.
Restricted
Stock Award
means an Award entitling the recipient to acquire, at such purchase price
(which may be zero) as determined by the Administrator, shares of Stock subject
to such restrictions and conditions as the Administrator may determine at the
time of grant.
Sale
Event
shall mean (i) the sale of all or substantially all of the assets of the
Company on a consolidated basis to an unrelated person or entity, (ii) a
merger, reorganization or consolidation in which the outstanding shares of
Stock are converted into or exchanged for securities of the successor entity
and the holders of the Companys outstanding voting power immediately prior to
such transaction do not own a majority of the outstanding voting power of the
successor entity immediately upon completion of such transaction, or (iii) the
sale of all of the Stock of the Company to an unrelated person or entity.
Sale
Price
means the value as determined by the Administrator of the
consideration payable, or otherwise to be received by stockholders, per share
of Stock pursuant to a Sale Event.
Section
409A
means Section 409A of the Code and the regulations and other guidance
promulgated thereunder.
Stock
means the
Common Stock, par value $0.01 per share, of the Company, subject to adjustments
pursuant to Section 3.
47
Stock
Appreciation Right
means an Award entitling the recipient to receive shares of Stock having a
value equal to the excess of the Fair Market Value of the Stock on the date of
exercise over the exercise price of the Stock Appreciation Right multiplied by
the number of shares of Stock with respect to which the Stock Appreciation
Right shall have been exercised.
Subsidiary
means any
corporation or other entity (other than the Company) in which the Company has
at least a 50 percent interest, either directly or indirectly.
Ten
Percent Owner
means an employee who owns or is deemed to own (by reason of the attribution
rules of Section 424(d) of the Code) more than 10 percent of the combined
voting power of all classes of stock of the Company or any parent or subsidiary
corporation.
Unrestricted
Stock Award
means an Award of shares of Stock free of any restrictions.
ADMINISTRATION OF PLAN; ADMINISTRATOR AUTHORITY TO SELECT GRANTEES
AND DETERMINE AWARDS
Administration
of Plan
.
The Plan shall be administered by the Administrator.
Powers
of Administrator
.
The Administrator shall have the power and authority to grant Awards consistent
with the terms of the Plan, including the power and authority:
to
select the individuals to whom Awards may from time to time be granted;
to
determine the time or times of grant, and the extent, if any, of Incentive
Stock Options, Non-Qualified Stock Options, Stock Appreciation Rights,
Restricted Stock Awards, Deferred Stock Awards, Unrestricted Stock Awards,
Cash-Based Awards and Performance Share Awards, or any combination of the
foregoing, granted to any one or more grantees;
to
determine the number of shares of Stock to be covered by any Award;
to
determine and modify from time to time the terms and conditions, including
restrictions, not inconsistent with the terms of the Plan, of any Award, which
terms and conditions may differ among individual Awards and grantees, and to
approve the form of written instruments evidencing the Awards;
to
accelerate at any time the exercisability or vesting of all or any portion of
any Award, including but not limited to termination of employment or a Sale
Event;
subject
to the provisions of Section 5(c), to extend at any time the period in
which Stock Options may be exercised; and
at
any time to adopt, alter and repeal such rules, guidelines and practices for
administration of the Plan and for its own acts and proceedings as it shall
deem advisable; to interpret the terms and provisions of the Plan and any Award
(including related written instruments); to make all determinations it deems
advisable for the administration of the Plan; to decide all disputes arising in
connection with the Plan; and to otherwise supervise the administration of the
Plan.
All
decisions and interpretations of the Administrator shall be binding on all persons,
including the Company and Plan grantees.
Delegation
of Authority to Grant Options
. Subject to applicable law, the
Administrator, in its discretion, may delegate to the Chief Executive Officer
of the Company all or part of the Administrators authority and duties with
respect to the granting of Options, to individuals who are (i) not subject to
the reporting and other provisions of Section 16 of the Exchange Act and
(ii) not Covered Employees. Any such delegation by the Administrator shall include
a limitation as to the amount of Options that may be granted during the period
of the delegation and shall contain guidelines as to the determination of the
exercise price and the vesting criteria. The Administrator may revoke or amend
the terms of a delegation at any time but such action shall not invalidate any
prior actions of the Administrators delegate or delegates that were consistent
with the terms of the Plan.
48
Award
Agreement
.
Awards under the Plan shall be evidenced by Award Agreements that set forth the
terms, conditions and limitations for each Award which may include, without
limitation, the term of an Award and the provisions applicable in the event
employment or service terminates.
Indemnification
. Neither the
Board nor the Administrator, nor any member of either or any delegate thereof,
shall be liable for any act, omission, interpretation, construction or
determination made in good faith in connection with the Plan, and the members
of the Board and the Administrator (and any delegate thereof) shall be entitled
in all cases to indemnification and reimbursement by the Company in respect of
any claim, loss, damage or expense (including, without limitation, reasonable
attorneys fees) arising or resulting therefrom to the fullest extent permitted
by law and/or under the Companys articles or bylaws or any directors and
officers liability insurance coverage which may be in effect from time to time
and/or any indemnification agreement between such individual and the Company.
Foreign
Award Recipients
.
Notwithstanding any provision of the Plan to the contrary, in order to comply
with the laws in other countries in which the Company and its Subsidiaries
operate or have employees or other individuals eligible for Awards, the
Administrator, in its sole discretion, shall have the power and authority to:
(i) determine which Subsidiaries shall be covered by the Plan; (ii) determine
which individuals outside the United States are eligible to participate in the
Plan; (iii) modify the terms and conditions of any Award granted to individuals
outside the United States to comply with applicable foreign laws; (iv)
establish subplans and modify exercise procedures and other terms and
procedures, to the extent the Administrator determines such actions to be necessary
or advisable (and such subplans and/or modifications shall be attached to this
Plan as appendices); provided, however, that no such subplans and/or
modifications shall increase the share limitations contained in Section 3(a)
hereof; and (v) take any action, before or after
an Award is made, that
the Administrator determines to be necessary or advisable to obtain approval or
comply with any local governmental regulatory exemptions or approvals.
Notwithstanding the foregoing, the Administrator may not take any actions
hereunder, and no Awards shall be granted, that would violate the Exchange Act
or any other applicable United States securities law, the Code, or any other
applicable United States governing statute or law.
STOCK ISSUABLE UNDER THE PLAN; MERGERS; SUBSTITUTION
Stock
Issuable
.
The maximum number of shares of Stock reserved and available for issuance under
the Plan shall be equal to the sum of (i) 17,000,000, plus (ii) the number of
shares of Stock underlying any grants pursuant to this Plan or the Plug Power
Inc. 1999 Stock Option and Incentive Plan that are forfeited, canceled,
repurchased or are terminated (other than by exercise). Shares tendered or
held back upon exercise of an Option or settlement of an Award to cover the
exercise price or tax withholding shall not be available for future issuance
under the Plan. In addition, upon exercise of Stock Appreciation Rights, the
gross number of shares exercised shall be deducted from the total number of
shares remaining available for issuance under the Plan. Subject to such
overall limitations, shares of Stock may be issued up to such maximum number
pursuant to any type or types of Award; provided, however, that Stock Options
or Stock Appreciation Rights with respect to no more than 5,000,000 shares of
Stock may be granted to any one individual grantee during any one calendar year
period and no more than 17,000,000 shares of Stock shall be issued in the form
of Incentive Stock Options. The shares available for issuance under the Plan
may be authorized but unissued shares of Stock or shares of Stock reacquired by
the Company.
Effect
of Awards
.
The grant of any full value Award (i.e., an Award other than an Option or a
Stock Appreciation Right) shall be deemed, solely for purposes of determining the
number of shares of Stock available for issuance under Section 3(a) and not for
any purpose outside of the Plan, as an Award of 1.5 shares of Stock for each
such share of Stock actually subject to the Award. The grant of an Option or a
Stock Appreciation Right shall be deemed, for purposes of determining the
number of shares of Stock available for issuance under Section 3(a), as an
Award for one share of Stock for each such share actually subject to the Award.
49
Changes
in Stock
.
Subject to Section 3(d) hereof, if, as a result of any reorganization,
recapitalization, reclassification, stock dividend, stock split, reverse stock
split or other similar change in the Companys capital stock, the outstanding
shares of Stock are increased or decreased or are exchanged for a different
number or kind of shares or other securities of the Company, or additional
shares or new or different shares or other securities of the Company or other
non-cash assets are distributed with respect to such shares of Stock or other securities,
or, if, as a result of any merger or consolidation, sale of all or
substantially all of the assets of the Company, the outstanding shares of Stock
are converted into or exchanged for securities of the Company or any successor
entity (or a parent or subsidiary thereof), the Administrator shall make an
appropriate or proportionate adjustment in (i) the maximum number of shares
reserved for issuance under the Plan, including the maximum number of shares
that may be issued in the form of Incentive Stock Options, (ii) the number of
Stock Options or Stock Appreciation Rights that can be granted to any one
individual grantee and the maximum number of shares that may be granted under a
Performance-Based Award, (iii) the number and kind of shares or other
securities subject to any then outstanding Awards under the Plan, (iv) the
repurchase price, if any, per share subject to each outstanding Restricted
Stock Award, and (v) the price for each share subject to any then
outstanding Stock Options and Stock Appreciation Rights under the Plan, without
changing the aggregate exercise price (i.e., the exercise price multiplied by
the number of Stock Options and Stock Appreciation Rights) as to which such
Stock Options and Stock Appreciation Rights remain exercisable. The
Administrator shall also make equitable or proportionate adjustments in the
number of shares subject to outstanding Awards and the exercise price and the
terms of outstanding Awards to take into consideration cash dividends paid
other than in the ordinary course or any other extraordinary corporate event.
The adjustment by the Administrator shall be final, binding and conclusive. No
fractional shares of Stock shall be issued under the Plan resulting from any
such adjustment, but the Administrator in its discretion may make a cash
payment in lieu of fractional shares.
Mergers
and Other Transactions
. Except as the Administrator may otherwise specify
with respect to particular Awards in the relevant Award documentation, in the
case of and subject to the consummation of a Sale Event, all Options and Stock
Appreciation Rights that are not exercisable immediately prior to the effective
time of the Sale Event shall become fully exercisable as of the effective time
of the Sale Event, all other Awards with time-based vesting, conditions or
restrictions shall become fully vested and nonforfeitable as of the effective
time of the Sale Event and all Awards with conditions and restrictions relating
to the attainment of performance goals may become vested and nonforfeitable in
connection with a Sale Event in the Administrators discretion, unless, in any
case, the parties to the Sale Event agree that Awards will be assumed or
continued by the successor entity. Upon the effective time of the Sale Event,
the Plan and all outstanding Awards granted hereunder shall terminate, unless
provision is made in connection with the Sale Event in the sole discretion of
the parties thereto for the assumption or continuation of Awards theretofore
granted by the successor entity, or the substitution of such Awards with new
Awards of the successor entity or parent thereof, with appropriate adjustment
as to the number and kind of shares and, if appropriate, the per share exercise
prices, as such parties shall agree (after taking into account any acceleration
hereunder). In the event of such termination, (i) the Company shall have the
option (in its sole discretion) to make or provide for a cash payment to the
grantees holding Options and Stock Appreciation Rights, in exchange for the
cancellation thereof, in an amount equal to the difference between (A) the Sale
Price multiplied by the number of shares of Stock subject to outstanding
Options and Stock Appreciation Rights (to the extent then exercisable (after
taking into account any acceleration hereunder) at prices not in excess of the
Sale Price) and (B) the aggregate exercise price of all such outstanding
Options and Stock Appreciation Rights; or (ii) each grantee shall be permitted,
within a specified period of time prior to the consummation of the Sale Event
as determined by the Administrator, to exercise all outstanding Options and
Stock Appreciation Rights held by such grantee.
Substitute
Awards
.
The Administrator may grant Awards under the Plan in substitution for stock and
stock based awards held by employees, directors or other key persons of another
corporation in connection with the merger or consolidation of the employing
corporation with the Company or a Subsidiary or the acquisition by the Company
or a Subsidiary of property or stock of the employing corporation. The
Administrator may direct that the substitute awards be granted on such terms
and conditions as the Administrator considers appropriate in the
circumstances. Any substitute Awards granted under the Plan shall not count
against the share limitation set forth in Section 3(a).
ELIGIBILITY
Grantees
under the Plan will be such full or part-time officers and other employees,
Non-Employee Directors and key persons (including consultants and prospective
employees) of the Company and its Subsidiaries as are selected from time to
time by the Administrator in its sole discretion.
STOCK OPTIONS
Grants
of Stock Options
.
Any Stock Option granted under the Plan shall be in such form as the
Administrator may from time to time approve.
Stock
Options granted under the Plan may be either Incentive Stock Options or
Non-Qualified Stock Options. Incentive Stock Options may be granted only to
employees of the Company or any Subsidiary that is a subsidiary corporation
within the meaning of Section 424(f) of the Code. To the extent that any
Option does not qualify as an Incentive Stock Option, it shall be deemed a
Non-Qualified Stock Option.
50
The
Administrator in its discretion may grant Stock Options to eligible employees
and key persons of the Company or any Subsidiary. Stock Options granted
pursuant to this Section 5(a) shall be subject to the following terms and
conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Administrator shall deem
desirable. If the Administrator so determines, Stock Options may be granted in
lieu of cash compensation at the optionees election, subject to such terms and
conditions as the Administrator may establish.
Exercise
Price
.
The exercise price per share for the Stock covered by a Stock Option granted
pursuant to this Section 5(a) shall be determined by the Administrator at
the time of grant but shall not be less than 100 percent of the Fair Market
Value on the date of grant. In the case of an Incentive Stock Option that is
granted to a Ten Percent Owner, the option price of such Incentive Stock Option
shall be not less than 110 percent of the Fair Market Value on the grant date.
Option
Term
.
The term of each Stock Option shall be fixed by the Administrator, but no Stock
Option shall be exercisable more than ten years after the date the Stock Option
is granted. In the case of an Incentive Stock Option that is granted to a Ten
Percent Owner, the term of such Stock Option shall be no more than five years
from the date of grant.
Exercisability;
Rights of a Stockholder.
Stock Options shall become exercisable at such
time or times, whether or not in installments, as shall be determined by the
Administrator at or after the grant date. The Administrator may at any time
accelerate the exercisability of all or any portion of any Stock Option. An
optionee shall have the rights of a stockholder only as to shares acquired upon
the exercise of a Stock Option and not as to unexercised Stock Options.
Method
of Exercise
.
Stock Options may be exercised in whole or in part, by giving written or
electronic notice of exercise to the Company, specifying the number of shares
to be purchased. Payment of the purchase price may be made by one or more of
the following methods except to the extent otherwise provided in the Option
Award Agreement:
In
cash, by certified or bank check or other instrument acceptable to the
Administrator;
Through
the delivery (or attestation to the ownership) of shares of Stock that are not
then subject to restrictions under any Company plan. Such surrendered shares
shall be valued at Fair Market Value on the exercise date; or
By
the optionee delivering to the Company a properly executed exercise notice
together with irrevocable instructions to a broker to promptly deliver to the
Company cash or a check payable and acceptable to the Company for the purchase
price; provided that in the event the optionee chooses to pay the purchase
price as so provided, the optionee and the broker shall comply with such
procedures and enter into such agreements of indemnity and other agreements as
the Administrator shall prescribe as a condition of such payment procedure.
With
respect to Stock Options that are not Incentive Stock Options, by a net
exercise arrangement pursuant to which the Company will reduce the number of
shares of Stock issuable upon exercise by the largest whole number of shares
with a Fair Market Value that does not exceed the aggregate exercise price.
Payment
instruments will be received subject to collection. The transfer to the
optionee on the records of the Company or of the transfer agent of the shares
of Stock to be purchased pursuant to the exercise of a Stock Option will be
contingent upon receipt from the optionee (or a purchaser acting in his stead
in accordance with the provisions of the Stock Option) by the Company of the
full purchase price for such shares and the fulfillment of any other
requirements contained in the Option Award Agreement or applicable provisions
of laws (including the satisfaction of any withholding taxes that the Company
is obligated to withhold with respect to the optionee). In the event an
optionee chooses to pay the purchase price by previously-owned shares of Stock
through the attestation method, the number of shares of Stock transferred to
the optionee upon the exercise of the Stock Option shall be net of the number
of attested shares. In the event that the Company establishes, for itself or
using the services of a third party, an automated system for the exercise of
Stock Options, such as a system using an internet website or interactive voice
response, then the paperless exercise of Stock Options may be permitted through
the use of such an automated system.
Annual
Limit on Incentive Stock Options
. To the extent required for incentive
stock option treatment under Section 422 of the Code, the aggregate Fair
Market Value (determined as of the time of grant) of the shares of Stock with
respect to which Incentive Stock Options granted under this Plan and any other
plan of the Company or its parent and subsidiary corporations become
exercisable for the first time by an optionee during any calendar year shall
not exceed $100,000. To the extent that any Stock Option exceeds this limit,
it shall constitute a Non-Qualified Stock Option.
51
STOCK APPRECIATION RIGHTS
Exercise
Price of Stock Appreciation Rights
. The exercise price of a Stock
Appreciation Right shall not be less than 100 percent of the Fair Market Value
of the Stock on the date of grant.
Grant
and Exercise of Stock Appreciation Rights
. Stock Appreciation Rights may
be granted by the Administrator independently of any Stock Option granted
pursuant to Section 5 of the Plan.
Terms
and Conditions of Stock Appreciation Rights
. Stock Appreciation Rights
shall be subject to such terms and conditions as shall be determined from time
to time by the Administrator. The term of a Stock Appreciation Right may not
exceed ten years.
RESTRICTED STOCK AWARDS
Nature
of Restricted Stock Awards
. The Administrator shall determine the
restrictions and conditions applicable to each Restricted Stock Award at the
time of grant. Conditions may be based on continuing employment (or other
service relationship) and/or achievement of pre-established performance goals
and objectives. The grant of a Restricted Stock Award is contingent on the
grantee executing the Restricted Stock Award Agreement. The terms and
conditions of each such Award Agreement shall be determined by the
Administrator, and such terms and conditions may differ among individual Awards
and grantees.
Rights
as a Stockholder
.
Upon execution of the Restricted Stock Award Agreement and payment of any
applicable purchase price, a grantee shall have the rights of a stockholder
with respect to the voting of the Restricted Stock, subject to such conditions
contained in the Restricted Stock Award Agreement. Unless the Administrator
shall otherwise determine, (i) uncertificated Restricted Stock shall be
accompanied by a notation on the records of the Company or the transfer agent
to the effect that they are subject to forfeiture until such Restricted Stock
are vested as provided in Section 7(d) below, and (ii) certificated Restricted
Stock shall remain in the possession of the Company until such Restricted Stock
is vested as provided in Section 7(d) below, and the grantee shall be
required, as a condition of the grant, to deliver to the Company such
instruments of transfer as the Administrator may prescribe.
Restrictions
. Restricted
Stock may not be sold, assigned, transferred, pledged or otherwise encumbered
or disposed of except as specifically provided herein or in the Restricted
Stock Award Agreement. Except as may otherwise be provided by the
Administrator either in the Award Agreement or, subject to Section 17 below, in
writing after the Award Agreement is issued if a grantees employment (or other
service relationship) with the Company and its Subsidiaries terminates for any
reason, any Restricted Stock that has not vested at the time of termination
shall automatically and without any requirement of notice to such grantee from
or other action by or on behalf of, the Company be deemed to have been
reacquired by the Company at its original purchase price (if any) from such
grantee or such grantees legal representative simultaneously with such
termination of employment (or other service relationship), and thereafter shall
cease to represent any ownership of the Company by the grantee or rights of the
grantee as a stockholder. Following such deemed reacquisition of unvested
Restricted Stock that are represented by physical certificates, a grantee shall
surrender such certificates to the Company upon request without consideration.
Vesting
of Restricted Stock
.
The Administrator at the time of grant shall specify the date or dates and/or
the attainment of pre-established performance goals, objectives and other
conditions on which the non-transferability of the Restricted Stock and the
Companys right of repurchase or forfeiture shall lapse. Notwithstanding the
foregoing, in the event that any such Restricted Stock granted to employees
shall have a performance-based goal, the restriction period with respect to
such shares shall not be less than one year, and in the event any such
Restricted Stock granted to employees shall have a time-based restriction, the
total restriction period with respect to such shares shall not be less than
three years; provided, however, that Restricted Stock with a time-based
restriction may become vested incrementally over such three-year period.
Subsequent to such date or dates and/or the attainment of such pre-established
performance goals, objectives and other conditions, the shares on which all
restrictions have lapsed shall no longer be Restricted Stock and shall be
deemed vested. Except as may otherwise be provided by the Administrator
either in the Award Agreement or, subject to Section 17 below, in writing
after the Award Agreement is issued, a grantees rights in any shares of
Restricted Stock that have not vested shall automatically terminate upon the
grantees termination of employment (or other service relationship) with the
Company and its Subsidiaries and such shares shall be subject to the provisions
of Section 7(c) above.
52
DEFERRED STOCK AWARDS
Nature
of Deferred Stock Awards
. The Administrator shall determine the
restrictions and conditions applicable to each Deferred Stock Award at the time
of grant. Conditions may be based on continuing employment (or other service
relationship) and/or achievement of pre-established performance goals and
objectives. The grant of a Deferred Stock Award is contingent on the grantee
executing the Deferred Stock Award Agreement. The terms and conditions of each
such Award Agreement shall be determined by the Administrator, and such terms
and conditions may differ among individual Awards and grantees.
Notwithstanding the foregoing, in the event that any such Deferred Stock Award
granted to employees shall have a performance-based goal, the restriction
period with respect to such Award shall not be less than one year, and in the
event any such Deferred Stock Award granted to employees shall have a
time-based restriction, the total restriction period with respect to such Award
shall not be less than three years; provided, however, that any Deferred Stock
Award with a time-based restriction may become vested incrementally over such
three-year period. At the end of the deferral period, the Deferred Stock Award,
to the extent vested, shall be settled in the form of shares of Stock. To the
extent that a Deferred Stock Award is subject to Section 409A, it may contain
such additional terms and conditions as the Administrator shall determine in
its sole discretion in order for such Award to comply with the requirements of
Section 409A.
Election
to Receive Deferred Stock Awards in Lieu of Compensation
. The
Administrator may, in its sole discretion, permit a grantee to elect to receive
a portion of future cash compensation otherwise due to such grantee in the form
of a Deferred Stock Award. Any such election shall be made in writing and
shall be delivered to the Company no later than the date specified by the
Administrator and in accordance with Section 409A and such other rules and
procedures established by the Administrator. Any such future cash compensation
that the grantee elects to defer shall be converted to a fixed number of
phantom stock units based on the Fair Market Value of Stock on the date the
compensation would otherwise have been paid to the grantee if such payment had
not been deferred as provided herein. The Administrator shall have the sole
right to determine whether and under what circumstances to permit such
elections and to impose such limitations and other terms and conditions thereon
as the Administrator deems appropriate.
Rights
as a Stockholder
.
A grantee shall have the rights as a stockholder only as to shares of Stock
acquired by the grantee upon settlement of a Deferred Stock Award.
Termination
. Except as may
otherwise be provided by the Administrator either in the Award Agreement or,
subject to Section 17 below, in writing after the Award Agreement is
issued, a grantees right in all Deferred Stock Awards that have not vested
shall automatically terminate upon the grantees termination of employment (or
cessation of service relationship) with the Company and its Subsidiaries for
any reason.
UNRESTRICTED STOCK AWARDS
Grant
or Sale of Unrestricted Stock
. The Administrator may, in its sole
discretion, grant (or sell at par value or such higher purchase price
determined by the Administrator) an Unrestricted Stock Award under the Plan.
Unrestricted Stock Awards may be granted in respect of past services or other
valid consideration, or in lieu of cash compensation due to such grantee.
CASH-BASED AWARDS
Grant
of Cash-Based Awards
.
The Administrator may, in its sole discretion, grant Cash-Based Awards to any
grantee in such number or amount and upon such terms, and subject to such
conditions, as the Administrator shall determine at the time of grant. The
Administrator shall determine the maximum duration of the Cash-Based Award, the
amount of cash to which the Cash-Based Award pertains, the conditions upon
which the Cash-Based Award shall become vested or payable, and such other
provisions as the Administrator shall determine. Each Cash-Based Award shall
specify a cash-denominated payment amount, formula or payment ranges as
determined by the Administrator. Payment, if any, with respect to a Cash-Based
Award shall be made in accordance with the terms of the Award and may be made
in cash or in shares of Stock, as the Administrator determines.
PERFORMANCE SHARE AWARDS
Nature
of Performance Share Awards
. The Administrator may, in its sole discretion,
grant Performance Share Awards independent of, or in connection with, the
granting of any other Award under the Plan. The Administrator shall determine
whether and to whom Performance Share Awards shall be granted, the Performance
Goals, the periods during which performance is to be measured, which may not be
less than one year, and such other limitations and conditions as the
Administrator shall determine.
Rights
as a Stockholder
.
A grantee receiving a Performance Share Award shall have the rights of a
stockholder only as to shares actually received by the grantee under the Plan
and not with respect to shares subject to the Award but not actually received
by the grantee. A grantee shall be entitled to receive shares of Stock under a
Performance Share Award only upon satisfaction of all conditions specified in
the Performance Share Award agreement (or in a performance plan adopted by the
Administrator).
53
Termination
. Except as may
otherwise be provided by the Administrator either in the Award agreement or,
subject to Section 17 below, in writing after the Award agreement is
issued, a grantees rights in all Performance Share Awards shall automatically
terminate upon the grantees termination of employment (or cessation of service
relationship) with the Company and its Subsidiaries for any reason.
PERFORMANCE-BASED AWARDS TO COVERED EMPLOYEES
Performance-Based
Awards
.
Any employee or other key person providing services to the Company and who is
selected by the Administrator may be granted one or more Performance-Based
Awards in the form of a Restricted Stock Award, Deferred Stock Award,
Performance Share Awards or Cash-Based Award payable upon the attainment of
Performance Goals that are established by the Administrator and relate to one
or more of the Performance Criteria, in each case on a specified date or dates
or over any period or periods determined by the Administrator. The
Administrator shall define in an objective fashion the manner of calculating
the Performance Criteria it selects to use for any Performance Cycle.
Depending on the Performance Criteria used to establish such Performance Goals,
the Performance Goals may be expressed in terms of overall Company performance
or the performance of a division, business unit, or an individual. The
Administrator, in its discretion, may adjust or modify the calculation of
Performance Goals for such Performance Cycle in order to prevent the dilution
or enlargement of the rights of an individual (i) in the event of, or in
anticipation of, any unusual or extraordinary corporate item, transaction,
event or development, (ii) in recognition of, or in anticipation of, any other
unusual or nonrecurring events affecting the Company, or the financial
statements of the Company, or (iii) in response to, or in anticipation of,
changes in applicable laws, regulations, accounting principles, or business
conditions provided however, that the Administrator may not exercise such
discretion in a manner that would increase the Performance-Based Award granted
to a Covered Employee. Each Performance-Based Award shall comply with the
provisions set forth below.
Grant
of Performance-Based Awards
. With respect to each Performance-Based Award
granted to a Covered Employee, the Administrator shall select, within the first
90 days of a Performance Cycle (or, if shorter, within the maximum period
allowed under Section 162(m) of the Code) the Performance Criteria for
such grant, and the Performance Goals with respect to each Performance
Criterion (including a threshold level of performance below which no amount
will become payable with respect to such Award). Each Performance-Based Award
will specify the amount payable, or the formula for determining the amount
payable, upon achievement of the various applicable performance targets. The
Performance Criteria established by the Administrator may be (but need not be)
different for each Performance Cycle and different Performance Goals may be
applicable to Performance-Based Awards to different Covered Employees.
Payment
of Performance-Based Awards
. Following the completion of a Performance Cycle,
the Administrator shall meet to review and certify in writing whether, and to
what extent, the Performance Goals for the Performance Cycle have been achieved
and, if so, to also calculate and certify in writing the amount of the
Performance-Based Awards earned for the Performance Cycle. The Administrator
shall then determine the actual size of each Covered Employees
Performance-Based Award, and, in doing so, may reduce or eliminate the amount
of the Performance-Based Award for a Covered Employee if, in its sole judgment,
such reduction or elimination is appropriate.
Maximum
Award Payable
.
The maximum Performance-Based Award payable to any one Covered Employee under
the Plan for any Performance Cycle is 2,500,000 Shares (subject to adjustment
as provided in Section 3(c) hereof) or $7,500,000 in the case of a
Performance-Based Award that is a Cash-Based Award.
Transferability of Awards
Transferability
. Except as
provided in Section 13(b) below, during a grantees lifetime, his or her
Awards shall be exercisable only by the grantee, or by the grantees legal
representative or guardian in the event of the grantees incapacity. No Awards
shall be sold, assigned, transferred or otherwise encumbered or disposed of by
a grantee other than by will or by the laws of descent and distribution or
pursuant to a domestic relations order. No Awards shall be subject, in whole
or in part, to attachment, execution, or levy of any kind, and any purported transfer
in violation hereof shall be null and void.
Administrator
Action
.
Notwithstanding Section 13(a), the Administrator, in its discretion, may
provide either in the Award Agreement regarding a given Award or by subsequent
written approval that the grantee (who is an employee or director) may transfer
his or her Awards (other than any Incentive Stock Options or Deferred Stock
Awards) to his or her immediate family members, to trusts for the benefit of
such family members, or to partnerships in which such family members are the
only partners, provided that the transferee agrees in writing with the Company
to be bound by all of the terms and conditions of this Plan and the applicable
Award.
54
Family
Member
.
For purposes of Section 13(b), family member shall mean a grantees
child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former
spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law, or sister-in-law, including adoptive
relationships, any person sharing the grantees household (other than a tenant
of the grantee), a trust in which these persons (or the grantee) have more than
50 percent of the beneficial interest, a foundation in which these persons (or
the grantee) control the management of assets, and any other entity in which
these persons (or the grantee) own more than 50 percent of the voting
interests.
Designation
of Beneficiary
.
Each grantee to whom an Award has been made under the Plan may designate a
beneficiary or beneficiaries to exercise any Award or receive any payment under
any Award payable on or after the grantees death. Any such designation shall
be on a form provided for that purpose by the Administrator and shall not be
effective until received by the Administrator. If no beneficiary has been
designated by a deceased grantee, or if the designated beneficiaries have
predeceased the grantee, the beneficiary shall be the grantees estate.
TAX WITHHOLDING
Payment
by Grantee
.
Each grantee shall, no later than the date as of which the value of an Award or
of any Stock or other amounts received thereunder first becomes includable in
the gross income of the grantee for Federal income tax purposes, pay to the
Company, or make arrangements satisfactory to the Administrator regarding
payment of, any Federal, state, or local taxes of any kind required by law to
be withheld by the Company with respect to such income. The Company and its
Subsidiaries shall, to the extent permitted by law, have the right to deduct
any such taxes from any payment of any kind otherwise due to the grantee. The
Companys obligation to deliver evidence of book entry (or stock certificates)
to any grantee is subject to and conditioned on tax withholding obligations
being satisfied by the grantee.
Payment
in Stock
.
Subject to approval by the Administrator, a grantee may elect to have the
Companys minimum required tax withholding obligation satisfied, in whole or in
part, by authorizing the Company to withhold from shares of Stock to be issued
pursuant to any Award a number of shares with an aggregate Fair Market Value
(as of the date the withholding is effected) that would satisfy the withholding
amount due.
Section 409A awards.
To
the extent that any Award is determined to constitute nonqualified deferred
compensation within the meaning of Section 409A (a 409A Award), the Award
shall be subject to such additional rules and requirements as specified by the
Administrator from time to time in order to comply with Section 409A. In this
regard, if any amount under a 409A Award is payable upon a separation from
service (within the meaning of Section 409A) to a grantee who is then
considered a specified employee (within the meaning of Section 409A), then no
such payment shall be made prior to the date that is the earlier of (i) six
months and one day after the grantees separation from service, or (ii) the
grantees death, but only to the extent such delay is necessary to prevent such
payment from being subject to interest, penalties and/or additional tax imposed
pursuant to Section 409A. Further, the settlement of any such Award may not be
accelerated except to the extent permitted by Section 409A.
TRANSFER, LEAVE OF ABSENCE, ETC.
For
purposes of the Plan, the following events shall not be deemed a termination of
employment:
a
transfer to the employment of the Company from a Subsidiary or from the Company
to a Subsidiary, or from one Subsidiary to another; or
an
approved leave of absence for military service or sickness, or for any other
purpose approved by the Company, if the employees right to re-employment is
guaranteed either by a statute or by contract or under the policy pursuant to
which the leave of absence was granted or if the Administrator otherwise so
provides in writing.
55
AMENDMENTS AND TERMINATION
The
Board may, at any time, amend or discontinue the Plan and the Administrator
may, at any time, amend or cancel any outstanding Award for the purpose of
satisfying changes in law or for any other lawful purpose, but no such action
shall adversely affect rights under any outstanding Award without the holders
consent. Except as provided in Section 3(c) or 3(d), without prior stockholder
approval, in no event may the Administrator exercise its discretion to reduce
the exercise price of outstanding Stock Options or Stock Appreciation Rights or
effect repricing through cancellation and re-grants of Options or other
Awards. To the extent required under the rules of any securities exchange or
market system on which the Stock is listed, to the extent determined by the
Administrator to be required by the Code to ensure that Incentive Stock Options
granted under the Plan are qualified under Section 422 of the Code, or to
ensure that compensation earned under Awards qualifies as performance-based compensation
under Section 162(m) of the Code, Plan amendments shall be subject to
approval by the Company stockholders entitled to vote at a meeting of
stockholders. Nothing in this Section 17 shall limit the Administrators
authority to take any action permitted pursuant to Section 3(d).
STATUS OF PLAN
With
respect to the portion of any Award that has not been exercised and any
payments in cash, Stock or other consideration not received by a grantee, a
grantee shall have no rights greater than those of a general creditor of the
Company unless the Administrator shall otherwise expressly determine in
connection with any Award or Awards. In its sole discretion, the Administrator
may authorize the creation of trusts or other arrangements to meet the
Companys obligations to deliver Stock or make payments with respect to Awards
hereunder, provided that the existence of such trusts or other arrangements is
consistent with the foregoing sentence.
GENERAL PROVISIONS
No
Distribution
.
The Administrator may require each person acquiring Stock pursuant to an Award
to represent to and agree with the Company in writing that such person is
acquiring the shares without a view to distribution thereof.
Delivery
of Stock Certificates
.
Stock certificates to grantees under this Plan shall be deemed delivered for
all purposes when the Company or a stock transfer agent of the Company shall
have mailed such certificates in the United States mail, addressed to the
grantee, at the grantees last known address on file with the Company. Uncertificated
Stock shall be deemed delivered for all purposes when the Company or a Stock
transfer agent of the Company shall have given to the grantee by electronic
mail (with proof of receipt) or by United States mail, addressed to the
grantee, at the grantees last known address on file with the Company, notice
of issuance and recorded the issuance in its records (which may include
electronic book entry records). Notwithstanding anything herein to the
contrary, the Company shall not be required to issue or deliver any
certificates evidencing shares of Stock pursuant to the exercise of any Award,
unless and until the Administrator has determined, with advice of counsel (to
the extent the Administrator deems such advice necessary or advisable), that the
issuance and delivery of such certificates is in compliance with all applicable
laws, regulations of governmental authorities and, if applicable, the
requirements of any exchange on which the shares of Stock are listed, quoted or
traded. All Stock certificates delivered pursuant to the Plan shall be subject
to any stop-transfer orders and other restrictions as the Administrator deems
necessary or advisable to comply with federal, state or foreign jurisdiction,
securities or other laws, rules and quotation system on which the Stock is
listed, quoted or traded. The Administrator may place legends on any Stock
certificate to reference restrictions applicable to the Stock. In addition to
the terms and conditions provided herein, the Administrator may require that an
individual make such reasonable covenants, agreements, and representations as
the Administrator, in its discretion, deems necessary or advisable in order to
comply with any such laws, regulations, or requirements. The Administrator
shall have the right to require any individual to comply with any timing or
other restrictions with respect to the settlement or exercise of any Award,
including a window-period limitation, as may be imposed in the discretion of
the Administrator.
Stockholder
Rights
.
Until Stock is deemed delivered in accordance with
Section 19(b), no right to vote or receive dividends or any other rights of a
stockholder will exist with respect to shares of Stock to be issued in
connection with an Award, notwithstanding the exercise of a Stock Option or any
other action by the grantee with respect to an Award.
Other
Compensation Arrangements; No Employment Rights
. Nothing
contained in this Plan shall prevent the Board from adopting other or
additional compensation arrangements, including trusts, and such arrangements
may be either generally applicable or applicable only in specific cases. The
adoption of this Plan and the grant of Awards do not confer upon any employee
any right to continued employment with the Company or any Subsidiary.
Trading
Policy Restrictions
.
Option exercises and other Awards under the Plan shall be subject to the
Companys insider trading policies and procedures, as in effect from time to
time.
56
Forfeiture
of Awards under Sarbanes-Oxley Act
. If the Company is required to prepare
an accounting restatement due to the material noncompliance of the Company, as
a result of misconduct, with any financial reporting requirement under the
securities laws, then any grantee who is one of the individuals subject to
automatic forfeiture under Section 304 of the Sarbanes-Oxley Act of 2002 shall
reimburse the Company for the amount of any Award received by such individual
under the Plan during the 12-month period following the first public issuance
or filing with the United States Securities and Exchange Commission, as the
case may be, of the financial document embodying such financial reporting
requirement.
EFFECTIVE DATE OF PLAN
This
Plan, as amended and restated, shall become effective upon approval by the
holders of a majority of the votes cast at a meeting of stockholders at which a
quorum is present. No grants of Stock Options and other Awards may be made
hereunder after the tenth anniversary of the Effective Date and no grants of
Incentive Stock Options may be made hereunder after the tenth anniversary of
the date the Plan, as amended and restated, is approved by the Board.
GOVERNING LAW
This
Plan and all Awards and actions taken thereunder shall be governed by, and
construed in accordance with, the laws of the State of Delaware, applied
without regard to conflict of law principles.
DATE APPROVED BY
BOARD OF DIRECTORS: April 22, 2014
DATE APPROVED BY
STOCKHOLDERS: