DEF 14A of Capstone Energy Plus, Inc.
Filed Dec 27, 2024 · FY20240001558370-24-016494
ELECTION OF DIRECTORS TO THE BOARD OF DIRECTORS
ELECTION OF DIRECTORS TO THE BOARD OF DIRECTORS The Board currently consists of seven directors and is divided into three classes, Class I, Class II and Class III, with only one class of directors being elected in each year. The term of Class I directors expires at this Annual Meeting, which is the first annual meeting of stockholders following the initial classification of the Board. The term of Class II directors expires at the second annual meeting following the initial classification, and the term of Class III directors expires at the third annual meeting following the initial classification. At each succeeding annual meeting of stockholders, beginning with this Annual Meeting, each of the successors elected to replace the class of directors whose term expires at that annual meeting will be elected for a three-year term. Directors in Class I will stand for election at this Annual Meeting. The terms of office of directors in Class II and Class III do not expire until the 2025 and 2026 annual meetings of stockholders, respectively. The Governance and Sustainability Committee has recommended that, and the Board has nominated, Ms. Ping Fu who is currently serving as a director in Class I, be elected as a Class I director for a term expiring at the 2027 annual meeting of stockholders or until the election and qualification of her successor in office, subject to her earlier death, resignation, retirement, disqualification or removal. Ms. Yon Y. Jorden’s term as a Class I director also expires at this Annual Meeting, and she has not been nominated to stand for re-election as a Class I director. We thank Ms. Jorden for her distinguished service to the Company. The Board has determined that following the conclusion of the Annual Meeting, our Board of Directors will be reduced from seven to six directors and Class I will be reduced from two directors to one director. The Board has determined that Mr. Robert C. Flexon, Ms. Yon Y. Jorden, Mr. Robert F. Powelson, Ms. Denise M. Wilson, Ms. Ping Fu and Mr. John P. Miller 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”). There are no arrangements or understandings between any of our directors, nominees for directors or officers and any other person pursuant to which any director, nominee for director or officer was or is to be selected as a director, nominee or officer, as applicable. Other than Mr. Flexon in respect of the bankruptcy filing of Dynegy’s subsidiary and the Company’s Chapter 11 bankruptcy proceedings, no director has been involved in any legal proceedings required to be disclosed under Item 401(f) of Regulation S-K. The positions of Chief Executive Officer and Chair of the Board of Directors are currently each filled by a different individual, Mr. Vincent J. Canino and Mr. Flexon, respectively. If the position of Chair of the Board of Directors is vacant, or if he or she is absent, the Chief Executive Officer presides, when present, at meetings of stockholders. Additionally, our Board of Directors has Compensation and Human Capital, Audit and Governance and Sustainability Committees. Ms. Wilson, Ms. Jorden, and Mr. Powelson each currently serve as a Committee Chair, with Ms. Wilson serving as Chair of the Compensation and Human Capital Committee, Ms. Jorden serving as Chair of the Audit Committee and Mr. Powelson serving as Chair of the Governance and Sustainability Committee. As part of the Board refresh process, Ms. Jorden will not stand for re-election and effective immediately following the Annual meeting Mr. Miller will become the Audit Committee Chairman and member of the Compensation and Human Capital Committee. We believe that the Chair of the Board, Chairs of the committees and the remaining members of the Board all have relevant experience and background to provide leadership and guidance to the Company and the Company’s management. Specifically, we believe that the members of the Board have relevant leadership, technology, finance, industry and market experience necessary for their positions as directors of the Company and provide for a leadership structure that is appropriate for the Company. Shares represented by each properly executed proxy will be voted for the one Class I nominee named below, unless contrary instructions are set forth on such proxy. Proxies cannot be voted for a greater number of individuals than the number of nominees. The nominee has agreed to stand for re-election and to serve, if elected, as a director. However, if such 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 may recommend.
Nominee to Our Board of Directors
Nominee to Our Board of Directors
Nominee to Our Board of Directors
| Name | Age | Director Since | Position | | Ping Fu | 66 | 2021 | Independent Director |
Nominee to Our Board of Directors
| Ping Fu | Ping Fu has been a director since August 2021. She currently serves on the board of directors of Live Nation Entertainment (NYSE: LYV), the world’s largest live entertainment company, as well as the board of directors of Long Now Foundation and Burning Man Project. In 1996, Ms. Fu co-founded Geomatic, a leader in 3D imaging and 3D printing technologies that has fundamentally changed the way products are designed and manufactured around the world, and she served as its CEO until 2013. Following the acquisition by 3D Systems (NYSE: DDD) of Geomagic in 2013, Ms. Fu served as Chief Strategy Officer and Chief Entrepreneur Officer at 3D Systems until 2016. She was also part of the team that created the NCSA Mosaic software and HTTP server software, which were key in the early development of the Internet. Ms. Fu has received numerous awards for her leadership, including the Outstanding American by Choice award from the U.S. Citizenship and Immigration Services, the Ernst & Young Entrepreneur of the Year award and Inc. Magazine’s Entrepreneur of the Year award. Ms. Fu’s book, Bend Not Break: A Life in Two Worlds, was on the New York Times bestseller list. | | | Ms. Fu brings to the Board extensive experience in senior executive and leadership positions, global business experience and expertise in technology trends, social change and policy making. |
Continuing Directors
Continuing Directors
Continuing Directors
| Name | Age | Director Since | Position | | Class II Directors | | | | | Robert C. Flexon | 66 | 2018 | Chair of the Board | | Robert F. Powelson | 55 | 2019 | Independent Director | | Denise M. Wilson | 65 | 2019 | Lead Independent Director | | Class III Directors | | | | | Vincent J. Canino(1) | 61 | 2024 | Director, President & Chief Executive Officer | | John P. Miller(2) | 67 | 2024 | Independent Director |
Continuing Directors
| (1) Mr. Canino joined the Board on March 11, 2024 in connection with his appointment as President and Chief Executive Officer. |
Continuing Directors
| (2) Mr. Miller joined the Board on February 26, 2024. |
Continuing Directors
| Robert C. Flexon | Robert C. Flexon has been a director since April 2018 and has served as Chair since January 2021. Mr. Flexon served as our Executive Chairman from August 9, 2023 until March 31, 2024 and as our Interim President and Chief Executive Officer from August 22, 2023 until March 10, 2024. Mr. Flexon currently serves as President, Chief Executive Officer and a member of the board of directors of UGI Corporation (NYSE: UGI), a distributor and marketer of energy products and related services and he has served in such positions since November 2024. Mr. Flexon serves as Chairman of the Board of Nexus Water Group since April 2024. He previously served as a director of PG&E Corporation (NYSE: PCG) from June 2020 and chair of the board from July 2020, until October 2024. He has also served as a director for Charah Solutions, Inc. (NYSE: CHRA) from June 2018 to July 2023 and of the Electric Reliability Council of Texas (ERCOT) from December 2021 to November 2024. Mr. Flexon was President and Chief Executive Officer and a director of Dynegy Inc. (NYSE: DYN), a power-generating company that owns and operates a number of natural gas-fueled or coal-fueled power stations in the U.S, from July 2011 to April 2018. Prior to joining Dynegy, Mr. Flexon served as the Chief Financial Officer of UGI Corporation from February 2011 to July 2011. Mr. Flexon was the Chief Executive Officer of Foster Wheeler AG (Nasdaq: FWLT) from June to October 2010 and the President and Chief Executive Officer of Foster Wheeler USA from November 2009 to May 2010. Prior to joining Foster Wheeler, Mr. Flexon was Executive Vice President and Chief Financial Officer of NRG Energy, Inc. (NYSE: NRG) from February to November 2009. Mr. Flexon previously served as Executive Vice President and Chief Operating Officer of NRG Energy from March 2008 to February 2009 and as its Executive Vice President and Chief Financial Officer from 2004 to 2008. Prior to joining NRG Energy, Mr. Flexon held executive positions with Hercules, Inc. and various key positions, including General Auditor, with Atlantic Richfield Company. In addition, Mr. Flexon was a CPA with the former Coopers & Lybrand from 1980 to 1987. Mr. Flexon served on the public board of directors of Foster Wheeler from 2006 until 2009 and from May to October 2010, of Westmoreland Coal Company from 2017 to 2019 and of TransAlta Corp. from 2019 to 2020. He served on the board of directors for Genesys Works-Houston, an organization that transforms the lives of disadvantaged high school students through meaningful work experience, from 2016 to 2021. He also served on the board of directors of Baker Ripley, a Texas non-profit organization that connects low-income people to opportunities, from 2014 to 2016. He has served on the board of directors of Nexus, a privately held water utility company, since April 2024. Mr. Flexon holds a Bachelor of Science degree in Accounting from Villanova University. He became a Certified Public Accountant (inactive) in the State of Pennsylvania. | | | Among his other skills and expertise, Mr. Flexon brings to the Board over a decade of experience in accounting and financial matters and has a breadth of executive management experience. In his years as an energy industry executive, he has developed a deep comprehension of wholesale power generation markets and customers. |
Continuing Directors
| John P. Miller | John P. Miller has been a director since February 2024. He has over 40 years of broad-based executive management experience in the manufacturing, distribution and transportation industries and has served in senior finance and leadership roles at public and private companies across a range of industry categories. He is serving as Chairman of the Audit Committee on the Board of Directors of Spruce Power Holding Corporation, an owner and operator of distributed solar energy assets, since 2022. From 2017 to 2021, he served as Chief Executive Officer of Power Solutions International, Inc., a publicly traded company focusing on the design, engineering and manufacture of a broad range of advanced, emission-certified engines and power systems. From 2008 until 2016, Mr. Miller served in operational and financial management positions of increasing responsibility at Navistar International Corporation, a global vehicle manufacturer and solutions provider, including as Senior Vice President of Operations and Corporate Finance. Prior to such roles, he served in the role of Chief Financial Officer of Laidlaw International, Inc., a provider of public transportation services, Chicago Metallic Corporation, a global manufacturer of suspended ceiling and metal products, Fleetpride, Inc., a distributor of heavy duty truck parts, and Peapod, an online grocery delivery company. Mr. Miller received his Master of Business Administration from the University of Michigan and a Bachelor of Arts degree in economics from DePauw University. | | | Among his other skills and expertise, Mr. Miller brings to the Board of Directors extensive industry experience and expertise in financial management and strategic planning. |
Continuing Directors
| Robert F. Powelson | Robert F. Powelson has been a director since June 2019. Mr. Powelson has served as the President and Chief Executive Officer of the National Association of Water Companies (“NAWC”) since June 2018. Prior to joining NAWC, Mr. Powelson was nominated to the Federal Energy Regulatory Commissioner (“FERC”) by President Donald J. Trump in May 2017, confirmed by the U.S. Senate in August 2017, and served as a member of FERC until August 2018. Prior to his appointment to FERC, Mr. Powelson served on the Pennsylvania Public Utility Commission (“PUC”) from June 2008 to August 2017, and served as the PUC’s chairman from February 2011 to May 2015. Mr. Powelson also served on Pennsylvania’s Marcellus Shale Advisory Commission from March 2011 to July 2011. Prior to joining the PUC, Mr. Powelson served as president of the Chester County Chamber of Business & Industry from February 1994 to July 2008. Mr. Powelson was also a past president of the National Association of Regulatory Utility Commissioners (“NARUC”), where he also was a member of the board of directors from March 2011 to July 2017. Mr. Powelson served as chairman of the NARUC Committee on Water and Power and represented the Water Committee on NARUC’s Task Force on Climate Policy. Mr. Powelson holds a Masters of Governmental Administration from the University of Pennsylvania and a Bachelor of Arts from St. Joseph’s University. | | | Among his other skills and expertise, Mr. Powelson brings to the Board extensive expertise in public utilities, the regulatory environment and public policy. |
Continuing Directors
| Denise M. Wilson | Denise M. Wilson has been a director since November 2019. Ms. Wilson served as Executive Vice President and President, Alternative Energy Businesses for NRG Energy, Inc. (NYSE: NRG), an independent power company with generation, energy retail business and cleantech ventures, from July 2011 through January 2016. Ms. Wilson served as Executive Vice President and Chief Administrative Officer of NRG from September 2008 through July 2011. Prior to September 2008, Ms. Wilson served as Executive Vice President, Human Resources for Nash-Finch Company, a national food distributor, and other various senior roles at NRG from 2000 through 2007. Prior to joining NRG, Ms. Wilson held various key positions as Vice President Human Resources with Metris Companies Inc. and Director, Human Resources with General Electric ITS. Ms. Wilson holds a Masters in Industrial Relations from the University of Minnesota. | | | Among her other skills and expertise, Ms. Wilson brings to the Board extensive experience as President of a Fortune 500 company that generates electricity and provides energy solutions and natural gas to millions of residential, small business, and commercial and industrial customers. | | Vincent J. Canino | Vincent J. Canino was appointed as President and Chief Executive Officer and a member of the Board on March 11, 2024. Prior to joining the Company, Mr. Canino served as the Chief Operating Officer of ESS Tech, Inc. (NYSE: GWH), a developer of long-duration energy storage solutions, from September 2022 to March 2024. He previously spent approximately eight years with Smardt Chiller Group, Inc. (“Smardt”), a manufacturer of oil-free chillers, most recently serving as Smardt’s President and Chief Executive Officer. Mr. Canino also served in various roles with Trane Commercial Systems (“Trane”), a manufacturer of heating, ventilation and air conditioning systems, including as Trane’s Vice President, Enterprise Businesses and Renewable Energy. Mr. Canino’s career includes multiple leadership, management, operations and sales roles with publicly traded and privately held organizations. Mr. Canino serves as a Board of Directors member of Western Washington University and holds a Master of Science in Engineering Mechanics from Pennsylvania State University and a Bachelor of Technology in Mechanical Engineering from the State University of New York at Binghamton. | | | Among his other skills and expertise, Mr. Canino brings to the Board his unique perspective as President and Chief Executive Officer of the Company and substantial executive and industry experience. |
Continuing Directors
Directors are elected by a plurality of the votes cast at the Annual Meeting. This means that the nominees receiving the highest number of affirmative (“FOR”) votes (among votes properly cast virtually or by proxy) will be elected as directors. In other words, because there are no other nominees for election as Class I directors other than the person named in the enclosed proxy card, and assuming such person receives at least one vote, such director will be re-elected to the Board as a Class I director. Shares represented by executed proxies will be voted for which no contrary instruction is given, if authority to do so is not withheld, “FOR” the election of the nominee named above. Only votes “FOR” will affect the outcome. Broker non-votes and withheld votes will have no effect on this proposal. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THE ELECTION OF THE NOMINEE OF THE BOARD OF DIRECTORS AS A CLASS I DIRECTOR OF THE COMPANY.
2024 Summary Compensation Table
2024 Summary Compensation Table The following table sets forth information regarding the compensation paid to or earned by our CEO and our other current NEOs, for services rendered to us and our subsidiaries for the fiscal years indicated.
2024 Summary Compensation Table
| | | | | Stock | Non-Equity Incentive | All Other | | | | | Salary | Bonus | Awards | Plan Compensation | Compensation | Total | | Name and Principal Position | Year | ($) | ($) | ($)(1)(2) | ($)(4) | ($)(5) | ($) | | Vincent J. Canino | 2024 | 21,154 | — | 472,500 | — | — | 493,654 | | President & Chief Executive Officer (6) | 2023 | — | — | — | — | — | — | | Robert C. Flexon | 2024 | 390,715(8) | — | 35,869 | — | 22,927 | 449,511 | | Former Interim President, Chief Executive Officer & Executive Chairman (7) | 2023 | — | — | — | — | — | — | | Darren R. Jamison | 2024 | 218,586 | — | 362,167 | — | 89,869 | 670,622 | | Former President & Chief Executive Officer (9) | 2023 | 557,180 | — | 362,170 | — | 7,389 | 926,739 | | John J. Juric | 2024 | 375,000 | — | 292,590 | 48,611 | 49,542 | 765,743 | | Chief Financial Officer (10) | 2023 | 21,635 | 100,000(3) | 220,000 | — | 666 | 342,301 | | Frederick S. Hencken III | 2024 | — | — | — | — | — | — | | Former Chief Financial Officer (11) | 2023 | 69,346 | — | 150,252 | — | 3,615 | 223,213 |
2024 Summary Compensation Table
| (1) This column represents the aggregate grant date fair value of restricted stock units (“RSUs”), performance restricted stock units (“PRSUs”) and Non-Voting Common Stock granted in the years presented in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718 (“ASC 718”), excluding the estimated impact of forfeitures related to service-based vesting conditions. Grant date fair value was calculated using the closing price of Capstone’s common stock or an independent valuation performed on the date of grant. Mr. Canino was offered an initial sign-on grant of 450,000 RSUs that vest ratably over a three-year period. For PRSUs granted in Fiscal 2024, the amount reported in the table above represents the grant date fair value of such award assuming the probable outcome of the performance conditions. The value of such award, assuming the maximum achievement of the performance conditions, was $56,250 for Mr. Juric. Mr. Juric’s RSUs and PRSU awards were subsequently cancelled in accordance with the Company’s restructuring. Mr. Jamison forfeited his PRSU award upon his termination of service. Mr. Canino joined the Company in March 2024 and did not receive a PRSU award for Fiscal 2024. |
2024 Summary Compensation Table
| (2) On September 27, 2023, prior to the Company’s financial restructuring, Mr. Flexon and Mr. Juric were awarded 60,795 and 114,560 shares, respectively, of the Non-Voting Common Stock of Capstone Turbine International, Inc. In connection with such restructuring, Capstone Turbine International, Inc., a former wholly owned subsidiary of Capstone Green Energy Corporation, became a public company and was renamed Capstone Green Energy Holdings, Inc. as successor to Capstone Green Energy Corporation for purposes of SEC registration, and the Non-Voting Common Stock of Capstone Turbine International, Inc. became the Company’s Non-Voting Common Stock. In accordance with ASC 718, the Company assessed the grant date fair values of the awards of Non-Voting Common Stock at the time of the respective grants (i.e., as grants of the Non-Voting Common Stock of Capstone Turbine International, Inc.) and under ASC 718 each such award to be of nil value at issuance. Upon completion of the Company’s financial restructuring, the Non-Voting Common Stock was revalued in accordance with ASC 718. The amounts reported in this column in respect of the Non-Voting Common Stock represent the incremental fair value of the Non-Voting Common Stock associated with the revaluation of the Non-Voting Common Stock in connection with the Company’s restructuring. |
2024 Summary Compensation Table
| (3) Mr. Juric earned a signing bonus of $100,000 upon joining the Company on March 6, 2023. |
2024 Summary Compensation Table
| (4) This column represents non-equity incentive plan compensation earned pursuant to the Capstone Executive Annual Incentive Plan (the “AIP”). |
2024 Summary Compensation Table
| (5) Amounts reported in this column include accrued vacation payouts upon departure from the Company, Company contributions to the 401(k) plan, premiums paid by the Company for life insurance and tax gross-up payments to Mr. Flexon and Mr. Juric related to their respective awards of Non-Voting Common Stock that were issued to facilitate the Chapter 11 bankruptcy restructuring. |
2024 Summary Compensation Table
| (6) Mr. Canino joined the Company on March 11, 2024. |
2024 Summary Compensation Table
| (7) Mr. Flexon served as Non-Executive Chairman of the Board until his appointment as Executive Chairman on August 9, 2023 and served as our Interim President and Chief Executive Officer from August 22, 2023 until March 10, 2024. Mr. Flexon remained Executive Chairman until March 31, 2024, upon which time he transitioned back to the role of Non-Executive Chairman of the Board effective April 1, 2024. |
2024 Summary Compensation Table
| (8) Consists of $356,715 in base salary earned by Mr. Flexon in connection with his service as Interim President and Chief Executive Officer from August 22, 2023 until March 10, 2024 and $34,000 in director compensation received by Mr. Flexon during the periods in Fiscal 2024 when he was not serving as Interim President and Chief Executive Officer (the period from March 31, 2023 until August 22, 2023). |
2024 Summary Compensation Table
| (9) Mr. Jamison departed the Company on August 22, 2023. |
2024 Summary Compensation Table
| (10) Mr. Juric joined the Company on March 6, 2023. |
2024 Summary Compensation Table
| (11) Mr. Hencken departed the Company on July 15, 2022. |
Outstanding Equity Awards at 2024 Fiscal Year-End
Outstanding Equity Awards at 2024 Fiscal Year-End Information about outstanding equity awards held by our NEOs as of the end of Fiscal 2024 is set forth in the table below.
Outstanding Equity Awards at 2024 Fiscal Year-End
| | Option Awards | | | | Stock Awards | | | | | | | | | | | | Equity Incentive | Equity Incentive | | | | | | | | | Plan Awards: | Plan Awards: | | | | | | | Number of | Market Value | Number of Unearned | Market or Payout Value | | | Number of Securities | | | | Shares or | of Shares or | Shares, | of Unearned Shares, | | | Underlying | | Option | | Units of Stock | Units of Stock | Units, or Other Rights | Units, or Other Rights | | | Unexercised Options | | Exercise | Option | That Have | That Have | That Have | That Have | | | Exercisable | Unexercisable | Price | Expiration | Not Vested | Not Vested | Not Vested | Not Vested | | Name | (#) | (#) | ($) | Date | (#) | ($)(2) | (#) | ($) | | Vincent J. Canino | — | — | — | — | 450,000(1) | 472,500 | — | — | | Darren R. Jamison | — | — | — | — | — | — | — | — | | John J. Juric | — | — | — | — | — | — | — | — | | Robert C. Flexon | — | — | — | — | — | — | — | — |
Outstanding Equity Awards at 2024 Fiscal Year-End
| (1) These RSUs represent an initial sign-on hiring grant dated March 11, 2024 and vest ratably over a three-year period, conditioned on continued service to the Company. |
Outstanding Equity Awards at 2024 Fiscal Year-End
| (2) Based on the fair value of our Common Stock of $1.05 as set forth in a valuation report dated March 31, 2024. |
Outstanding Equity Awards at 2024 Fiscal Year-End
Employee Benefits: Executive officers are generally entitled only to health, welfare and retirement benefits that are consistent with those offered to other employees of the Company. The Company offers group life, disability, medical, dental and vision insurance and an employee stock purchase program. The Company maintains a defined contribution 401(k) profit-sharing plan in which all employees are eligible to participate. The plan also provides for both Company matching and discretionary contributions, which are determined by the Board. The Company matches 50 cents on the dollar up to 6% of the employee’s compensation that is contributed. The Company’s match vests 25% a year over four years starting from the employee’s hire date. For the CEO’s first year of employment with the Company, to accommodate his transition to working out of the Company’s corporate headquarters in Van Nuys, California, the Company has agreed to reimburse him for the cost of reasonable hotel expenses incurred by him on business days that he works out of such office. Executive Employment Contracts, Termination of Employment and Change in Control Arrangements: On December 7, 2023, the Company adopted the Capstone Green Energy Holdings, Inc. Severance Pay Plan (the “New Severance Plan”), which contains terms substantially similar to those set forth in the original severance plan prior to the restructuring, which provide that, in the event that the Chief Financial Officer’s employment is terminated by the Company without Cause, the Chief Financial Officer will be entitled to receive, subject to the execution of a separation agreement containing a general release of claims, 52 weeks of base salary continuation and reimbursement of COBRA premiums for twelve months. The severance pay plan provides that, in the event that the Chief Executive Officer’s employment is terminated by the Company without Cause, the Chief Executive Officer will be entitled to receive, subject to the execution of a separation agreement containing a general release of claims, eighteen months of base salary continuation and reimbursement of COBRA premiums for eighteen months. Prior to December 7, 2023, the Company entered into a Change in Control Agreement (“Pre-Emergence CIC Agreement”) with Mr. Juric for certain payments and benefits following a termination of Mr. Juric’s employment either by the Company without Cause (as defined in the Pre-Emergence CIC Agreement) (other than due to Mr. Juric’s death, Mr. Juric being Disabled (as defined in the Pre-Emergence CIC Agreement), or Mr. Juric becoming an employee of any direct or indirect successor to the business or assets of the Company, rather than continuing as an employee of the Company) or by Mr. Juric for Good Reason (as defined in the Pre-Emergence CIC Agreement), in either case within six months prior to or 24 months following a CIC (as defined in the Pre-Emergence CIC Agreement and such a termination, a “Pre-Emergence CIC Agreement Qualifying Termination”). In the event of a Pre-Emergence CIC Agreement Qualifying Termination, subject to Mr. Juric signing and not revoking a separation agreement containing a general release of claims and a non-disparagement covenant (the “Pre-Emergence CIC Agreement Separation Agreement”), compliance with his obligations under the Pre-Emergence CIC Agreement Separation Agreement and compliance with any other continuing obligations to the Company or its successor, Mr. Juric will be eligible to receive (a) a lump sum severance payment equal to one and one-half (1.5) times the sum of Mr. Juric’s (i) annual base salary for the calendar year in which the Pre-Emergence CIC Agreement Qualifying Termination occurs (or annual base salary in effect immediately prior to the CIC, if higher) and (ii) target annual incentive compensation for the calendar year in which the Pre-Emergence CIC Agreement Qualifying Termination occurs, but pro-rated for the portion of such calendar year that falls prior to the Qualifying Termination; (b) a monthly cash payment in an amount equal to the monthly employer contribution that the Company would have made to provide health insurance to Mr. Juric if he had remained employed by the Company for up to 18 months; and (c) acceleration of any unvested equity awards outstanding on the date of the Pre-Emergence CIC Agreement Qualifying Termination, assuming achievement of performance criteria at target and without reduction for any shortened performance period in the case of performance-based equity awards. Payments under the Pre-Emergence CIC Agreements are in lieu of payments under the Severance Plan. Our recently completed financial restructuring constituted a CIC under the Pre-Emergence CIC Agreements, but a Qualifying Termination of Mr. Juric has not occurred. If Mr. Juric experiences a Pre-Emergence CIC Agreement Qualifying Termination within 24 months following such restructuring, Mr. Juric would be eligible to receive the foregoing severance payments and benefits, as applicable, pursuant to his Pre-Emergence CIC Agreement. In connection with the appointment of Mr. Canino as President and Chief Executive Officer, the Company entered into a CIC Agreement with Mr. Canino (the “Amended and Restated CIC Agreement” and together with the Pre-Emergence CIC Agreement, the “CIC Agreements”). The Amended and Restated CIC Agreement provides for certain payments and benefits following a Qualifying Termination (as defined in the Amended and Restated CIC Agreement). In the event of a Qualifying Termination, subject to Mr. Canino’s execution and non-revocation of a Separation Agreement, compliance with his obligations under the Separation Agreement and compliance with any other continuing obligations to the Company or its successor, he will be eligible to receive (a) two and one-half (2.5) times the sum of his: (i) annual base salary for the calendar year in which the Date of Termination (as defined in the Amended and Restated CIC Agreement) occurs (or his annual base salary in effect immediately prior to the CIC, if higher); and (ii) target annual incentive compensation for the calendar year in which the Date of Termination occurs; (b) a monthly cash payment in an amount equal to the monthly employer contribution that the Company would have made to provide health insurance to Mr. Canino if he had remained employed by the Company, for up to 18 months; and (c) acceleration of any unvested equity awards outstanding on the date of the Qualifying Termination, assuming achievement of performance criteria at target and without reduction for any shortened performance period in the case of performance-based equity awards. Payments under the Amended and Restated CIC Agreement are in lieu of payments under the Severance Plan. The Company has entered into indemnification agreements with its officers and directors containing provisions which may require the Company, among other things, to indemnify its officers and directors against certain liabilities that may arise by reason of their status or service as officers or directors (other than liabilities arising from willful misconduct of a culpable nature) and to advance their expenses incurred as a result of any proceeding against them as to which they could be indemnified. The tables below set forth the amount of compensation payable to each of Messrs. Canino and Juric, as if each situation occurred on March 31, 2024, under the severance plans and CIC Agreements discussed above. Mr. Canino
Outstanding Equity Awards at 2024 Fiscal Year-End
| | | Involuntary Termination | | | Involuntary Termination | Related to | | Executive Benefits and Payments upon Termination | without Cause | Change in Control | | Cash Payments | $825,000(1) | $2,750,000(2) | | Insurance Benefits | 37,578(3) | 37,578(4) | | Total | $862,578 | $2,787,578 |
Outstanding Equity Awards at 2024 Fiscal Year-End
| (1) Reflects severance payments of Mr. Canino’s annual base salary as of March 31, 2024 over a period of 18 months, payable under the New Severance Plan. |
Outstanding Equity Awards at 2024 Fiscal Year-End
| (2) Reflects a lump sum severance payment equal to two and one-half times the sum of Mr. Canino’s annual base salary as of March 31, 2024, and target annual incentive compensation, payable under the Amended and Restated Change in Control Agreement. |
Outstanding Equity Awards at 2024 Fiscal Year-End
| (3) Reflects monthly payments of health benefit premiums over a period of 18 months, payable under the New Severance Plan. |
Outstanding Equity Awards at 2024 Fiscal Year-End
| (4) Reflects monthly payments of health benefit premiums over a period of 18 months, payable under the Amended and Restated Change in Control Agreement. |
Outstanding Equity Awards at 2024 Fiscal Year-End
Mr. Juric
Outstanding Equity Awards at 2024 Fiscal Year-End
| | | Involuntary Termination | | | Involuntary Termination | Related to | | Executive Benefits and Payments upon Termination | without Cause | Change in Control | | Cash Payments | $375,000(1) | $900,000(2) | | Insurance Benefits | 26,010(3) | 39,015(4) | | Total | $401,010 | $939,015 |
Outstanding Equity Awards at 2024 Fiscal Year-End
| (1) Reflects severance payments of Mr. Juric’s annual base salary as of March 31, 2024 over a period of 52 weeks, payable under the Severance Plan. |
Outstanding Equity Awards at 2024 Fiscal Year-End
| (2) Reflects a lump sum severance payment equal to one and one-half times the sum of Mr. Juric’s annual base salary as of March 31, 2024, and target annual incentive compensation, payable under the Pre-Emergence CIC Agreement. |
Outstanding Equity Awards at 2024 Fiscal Year-End
| (3) Reflects monthly payments of health benefit premiums over a period of 12 months, payable under the Severance Plan. |
Outstanding Equity Awards at 2024 Fiscal Year-End
| (4) Reflects monthly payments of health benefit premiums over a period of 18 months, payable under the Pre-Emergence CIC Agreement. |
Pay Versus Performance
Pay Versus Performance In accordance with rules adopted by the SEC pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, we provide the following disclosure regarding executive “Compensation Actually Paid” (“CAP”) and certain performance measures required for Smaller Reporting Companies. The following table provides the information required for our NEOs for each of the fiscal years ended March 31, 2023 and March 31, 2024 along with the required financial information for each fiscal year:
Pay Versus Performance
| | | | | | Value of Initial Fixed | | | | CEO | | Non-CEO NEOs | | of $100 Investment | | | | | | Average | | Based on | | | | Summary | | Summary | Average | Total | | | | Compensation | Compensation | Compensation | Compensation | Shareholder | Net Income (Loss) | | | Table Total (1) | Actually Paid (1) | Table Total (2) | Actually Paid (1)(2) | Return (3) | (in millions) | | Year | ($) | ($) | ($) | ($) | ($) | ($) | | 2024(4) | 493,654 | 493,654 | 765,743 | 374,493 | 100.00 | 7.4 | | 2024(5) | 449,511 | 449,511 | — | — | — | — | | 2024(6) | 670,622 | 206,010 | — | — | — | — | | 2023(6) | 926,739 | 503,248 | 282,757 | 113,388 | — | (24.5) |
Pay Versus Performance
| (1) SEC rules require certain adjustments be made to the Summary Compensation Table totals to determine CAP as reported in the Pay Versus Performance table. CAP does not necessarily represent cash and/or equity value transferred to the applicable NEO without restriction, but rather is a value calculated under applicable SEC rules. A significant portion of the CAP amounts shown relate to changes in values of unvested awards over the course of the applicable reporting year. Our NEOs do not participate in a defined benefit plan, so no adjustment for pension benefits is included in the table below. |
Pay Versus Performance
The following table below details these adjustments to compensation as reported in the Summary Compensation Table:
Pay Versus Performance
| | 2024 | | | | 2023 | | | | Vincent J. | Robert C. | Darren R. | Average Non- | Darren R. | Average Non- | | | Canino | Flexon | Jamison | CEO NEOs | Jamison | CEO NEOs | | Total Compensation from Summary Compensation Table | $493,654 | $449,511 | $670,622 | $765,743 | $926,739 | $282,757 | | Adjustment for grant date values in the Summary Compensation Table | $(472,500) | $(35,869) | $(362,167) | $(292,590) | $(362,170) | $(185,126) | | Year-end fair value of unvested awards granted in the current year | 472,500 | — | — | — | 79,225 | 83,125 | | Year-over-year difference of year-end fair values for unvested awards granted in prior years | — | — | — | — | (107,040) | — | | Fair values at vest date for awards granted and vested in current year | — | 35,869 | — | 67,590 | — | — | | Difference in fair value between prior year-end fair values and vest date fair values for awards granted in prior years | — | — | (2,888) | — | (33,506) | (799) | | Forfeitures during current year equal to prior year-end fair value | — | — | (99,557) | (166,250) | — | (66,569) | | Total Adjustments for Equity Awards | $— | $— | $(464,612) | $(391,250) | $(423,491) | $(169,369) | | Compensation Actually Paid (as calculated) | $493,654 | $449,511 | $206,010 | $374,493 | $503,248 | $113,388 |
Pay Versus Performance
| (2) Non-CEO NEOs reflect the average Summary Compensation Table total compensation and average Compensation Actually Paid for the following executives by year: |
Pay Versus Performance
2024: John J. Juric 2023: John J. Juric and Frederick S. Hencken III
Pay Versus Performance
| (3) Because we have less than two full years of trading data, for purposes of the requirement in Item 402(v)(2)(iv), we measure cumulative total shareholder return (“TSR”) beginning on the date of our emergence from bankruptcy. TSR is calculated using the fair value of our Common Stock as set forth in valuation reports as of March 31, 2024 and December 7, 2023. |
Pay Versus Performance
| (4) CEO reflects Vincent J. Canino, who became President and CEO of the Company on March 11, 2024. |
Pay Versus Performance
| (5) CEO reflects Robert C. Flexon, who was appointed Executive Chairman on August 9, 2023 and served as our Interim President and CEO of the Company from August 22, 2023 until March 10, 2024. Mr. Flexon remained Executive Chairman until March 31, 2024. |
Pay Versus Performance
| (6) CEO reflects Darren R. Jamison, who served as our President and CEO until August 22, 2023. |
Pay Versus Performance Relationship Disclosures
Pay Versus Performance Relationship Disclosures Compensation Actually Paid and Cumulative Total Shareholder Return The graph below compares the CAP to our CEOs and the average of the CAP to our remaining Non-CEO NEOs, with our cumulative TSR for the fiscal years ended March 31, 2024 and 2023. TSR amounts reported in the graph assume an initial fixed investment of $100 at the beginning of the period. Compensation Actually Paid and Net Income (Loss) The graph below compares the CAP to our CEOs and the average of the CAP to our Non-CEO NEOs, with our net income (loss) for the fiscal years ended March 31, 2024 and 2023.
COMPENSATION OF DIRECTORS
COMPENSATION OF DIRECTORS The non-employee directors’ RSUs were cancelled on December 7, 2023 in connection with the Company’s restructuring. The director fee schedule for the 2024 Fiscal Year remained unchanged from the previous fiscal year. The director cash retainer was $35,000, the Chair of the Board additional cash retainer was $25,000 and the director equity retainer was $50,000. The Audit Committee Chair retainer was $17,000, the Compensation and Human Capital Committee Chair retainer was $15,000 and the Governance and Sustainability Committee Chair retainer was $10,000. Each non-employee director who served on the Audit Committee received an $8,000 annual retainer, and each non-employee director who served on the Compensation and Human Capital and Governance and Sustainability Committees received a $5,000 annual retainer. Non-employee directors may elect to receive shares of Common Stock in lieu of any cash retainer, based on the fair market value of Common Stock on the date that cash would have otherwise been paid. All payments are paid quarterly in arrears. If requested, all director expenses incurred in attending the Board or committee meetings are reimbursed by the Company. On December 7, 2023, the Board adopted a new director compensation policy. Pursuant to the new director compensation policy, each non-executive director will receive an annual base retainer of $75,000, payable in cash on a quarterly basis. The Chair of the Board will receive an additional cash retainer of $25,000, the Audit Committee Chair will receive an additional annual retainer of $17,000, and the other Audit Committee members will receive an additional annual retainer of $8,000. The Compensation and Human Capital Committee Chair will receive an annual retainer of $15,000, and the other Compensation and Human Capital Committee members will receive an additional annual retainer of $6,000. The Governance and Sustainability Committee Chair will receive an additional annual retainer of $10,000, and the other Governance and Sustainability Committee members will receive an additional annual retainer of $6,000. Non-executive directors will also receive an annual grant of RSUs valued at $10,000, commencing with the 2024 Annual Meeting. On January 22, 2024, the Board approved a policy providing for the grant of 10,000 RSUs to each new director appointed on or prior to December 7, 2024. Mr. Canino, the Company’s President and Chief Executive Officer, did not receive compensation for serving as a member of the Board. Compensation earned by Mr. Flexon as a director in Fiscal 2024 is not included in the table below as he was an employee of the Company for a portion of Fiscal 2024. See “—2024 Summary Compensation Table” for information about the compensation earned by Mr. Flexon in Fiscal 2024 in his capacity as both a non-employee director, Executive Chairman and Interim Chief Executive Officer and President of the Company. The Company uses its fiscal year in reporting compensation rather than the term of the Board. Compensation amounts may differ between the Company’s fiscal year and the term of the Company’s Board. Information about the compensation of the non-employee directors for the 2024 Fiscal Year is set forth in the table below.
COMPENSATION OF DIRECTORS
| | Fees Earned or | Stock | All Other | | | Name | Paid in Cash ($)(1) | Awards ($)(2)(3) | Compensation ($)(4) | Total ($) | | John P. Miller (6) | 978 | 10,500 | — | 11,478 | | Yon Y. Jorden | 68,000 | 35,869 | 30,006 | 133,875 | | Robert F. Powelson | 61,000 | 35,869 | 35,328 | 132,197 | | Denise M. Wilson | 66,000 | 35,869 | 44,554 | 146,423 | | Ping Fu | 59,000 | 35,869 | 51,086 | 145,955 | | Robert C. Flexon (5) | — | — | — | — |
COMPENSATION OF DIRECTORS
| (1) For each term of the Board (beginning on the date of an annual meeting of stockholders and ending on the date immediately preceding the next annual meeting of stockholders), a non-employee director may elect to receive a stock award in lieu of all or any portion of his or her annual retainer or committee fee cash payment. The award is calculated by dividing the amount of the fee by the fair market value of a share of common stock on the date |
COMPENSATION OF DIRECTORS
| the fee is payable. For the 2024 Fiscal Year, due to limited share pool availability, 100% of the amount of the aggregate directors’ fees was paid in cash. |
COMPENSATION OF DIRECTORS
| (2) On September 27, 2023, prior to the Company’s financial restructuring, each of Ms. Jorden, Mr. Powelson, Ms. Wilson and Ms. Fu were awarded 60,795 shares of the Non-Voting Common Stock of Capstone Turbine International, Inc. In connection with such restructuring, Capstone Turbine International, Inc., a former wholly owned subsidiary of Capstone Green Energy Corporation, became a public company and was renamed Capstone Green Energy Holdings, Inc. as successor to Capstone Green Energy Corporation for purposes of SEC registration, and the Non-Voting Common Stock of Capstone Turbine International, Inc. became the Company’s Non-Voting Common Stock. In accordance with ASC 718, the Company assessed the grant date fair values of the awards of Non-Voting Common Stock at the time of the respective grants (i.e., as grants of the Non-Voting Common Stock of Capstone Turbine International, Inc.) and under ASC 718 each such award to be of nil value at issuance. Upon completion of the Company’s financial restructuring, the Non-Voting Common Stock was revalued in accordance with ASC 718. The amounts reported in this column in respect of the Non-Voting Common Stock represent the incremental fair value of the Non-Voting Common Stock associated with the revaluation of the Non-Voting Common Stock in connection with the Company’s restructuring. |
COMPENSATION OF DIRECTORS
| (3) This column represents the aggregate grant date fair value of stock awards granted during the 2024 Fiscal Year calculated in accordance with ASC 718, excluding the estimated impact of forfeitures related to service-based vesting conditions. |
COMPENSATION OF DIRECTORS
| (4) This column represents Company payments for taxes reimbursed to each of Ms. Jorden, Mr. Powelson, Ms. Wilson and Ms. Fu in respect of their awards of Non-Voting Common Stock that were issued to facilitate the Chapter 11 bankruptcy restructuring. |
COMPENSATION OF DIRECTORS
| (5) Please see the 2024 Summary Compensation Table for disclosure regarding Mr. Flexon’s director compensation in the 2024 Fiscal Year. |
COMPENSATION OF DIRECTORS
| (6) Mr. Miller’s fees are prorated for services on the Board, Audit and Governance and Sustainability Committees. Mr. Miller received 10,000 RSUs in connection with his appointment to the Board on February 26, 2024. |