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 [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
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PLUG POWER, INC.
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class 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
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[_] Fee paid previously with preliminary materials.
[_] 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
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Notes:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
PLUG POWER INC.
968 Albany-Shaker Road
Latham, NY 12110
April 24, 2002
Dear Stockholder:
You are cordially invited to attend the 2002 Annual Meeting of Stockholders
(the "Annual Meeting") of Plug Power Inc., a Delaware corporation (the
"Company"), to be held on Thursday, May 16, 2002, at 10:00 a.m., local time, at
the Albany Marriott, 189 Wolf Road, Albany, New York.
The Annual Meeting has been called for the purpose of (i) electing three
Class III Directors, each for a three-year term and (ii) considering and voting
upon such other business as may properly come before the Annual Meeting or any
adjournments or postponements thereof.
The Board of Directors has fixed the close of business on March 22, 2002, 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 "FOR" the
election of the three nominees as Class III Directors of the Company.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE ANNUAL MEETING.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, YOU ARE REQUESTED TO
COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD IN THE ENCLOSED
ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. IF YOU
ATTEND THE ANNUAL MEETING, YOU MAY VOTE IN PERSON IF YOU WISH, EVEN IF YOU HAVE
PREVIOUSLY RETURNED YOUR PROXY CARD.
Sincerely,
Dr. Roger B. Saillant
President and Chief Executive Officer
PLUG POWER INC.
968 Albany-Shaker Road
Latham, NY 12110
(518) 782-7700
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on Thursday, May 16, 2002
NOTICE IS HEREBY GIVEN that the 2002 Annual Meeting of Stockholders of Plug
Power Inc., a Delaware corporation (the "Company"), will be held on Thursday,
May 16, 2002, at 10:00 a.m., local time, at the Albany Marriott, 189 Wolf Road,
Albany, New York (the "Annual Meeting") for the purpose of considering and
voting upon:
1. The election of three Class III Directors, each to hold office until
the Company's 2005 annual meeting of stockholders and until such
director's successor is duly elected and qualified; and
2. 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 March 22, 2002, 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 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.
In the event that there are not sufficient shares to be voted in favor of
any of the foregoing proposals at the time of the Annual Meeting, the Annual
Meeting may be adjourned in order to permit further solicitation of proxies.
By Order of the Board of Directors
Ana-Maria Galeano
Corporate Secretary
Latham, NY
April 24, 2002
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING IN PERSON, YOU ARE
REQUESTED TO COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD IN THE
ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. IF
YOU ATTEND THE ANNUAL MEETING, YOU MAY VOTE IN PERSON IF YOU WISH, EVEN IF YOU
HAVE PREVIOUSLY RETURNED YOUR PROXY CARD.
PLUG POWER INC.
968 Albany-Shaker Road
Latham, NY 12110
(518) 782-7700
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PROXY STATEMENT
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ANNUAL MEETING OF STOCKHOLDERS
To Be Held on Thursday, May 16, 2002
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 Annual Meeting of Stockholders of the Company to be held on Thursday, May
16, 2002, at 10:00 a.m., local time, at the Albany Marriott, 189 Wolf Road,
Albany, New York, 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. The election of three Class III Directors, each to hold office until
the Company's 2005 annual meeting of stockholders and until such
director's successor is duly elected and qualified; and
2. Such other business as may properly come before the Annual Meeting
and any adjournments or postponements thereof.
The Notice of Annual Meeting, Proxy Statement and Proxy Card are first being
mailed to stockholders of the Company on or about April 24, 2002 in connection
with the solicitation of proxies for the Annual Meeting. The Board of Directors
has fixed the close of business on March 22, 2002 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 Company's common
stock, par value $.01 per share ("Common 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 50,322,928 shares of Common Stock
outstanding and entitled to vote at the Annual Meeting and approximately 965
stockholders of record. Each holder of Common Stock outstanding as of the close
of business on the Record Date will be entitled to one vote for each share held
of record with respect to each matter submitted at the Annual Meeting.
The presence, in person or by proxy, of a majority of the total number of
outstanding shares of Common Stock 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 cast is necessary to
elect a nominee as a director of the Company.
Shares that reflect abstentions or "broker non-votes" (i.e., shares
represented at the meeting held by brokers or nominees as to which instructions
have not been received from the beneficial owners or persons entitled to vote
such shares and with respect to which the broker or nominee does not have
discretionary voting power to vote such shares) will be counted for purposes of
determining whether a quorum is present for the transaction of business at the
meeting. With respect to the election of directors, votes may be cast in favor
of or withheld from
each nominee; votes that are withheld will be excluded entirely from the vote
and will have no effect. Broker non-votes will also have no effect on the
outcome of the election of directors.
Stockholders of the Company are requested to complete, date, sign and return
the accompanying Proxy Card in the enclosed envelope. 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 three nominees of the Board of Directors as
Class III Directors of the Company as listed in this Proxy Statement. 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) signing and duly delivering a proxy bearing a
later date, or (3) attending the Annual Meeting and voting in person.
Attendance at the Annual Meeting will not, by itself, revoke a proxy.
The Annual Report of the Company is being mailed to stockholders of the
Company concurrently with this Proxy Statement.
PROPOSAL 1
ELECTION OF DIRECTORS
The number of directors of the Company is fixed at nine and the Board of
Directors currently consists of nine members. The Board of Directors is divided
into three classes, with three directors in Class I, three directors in Class
II and three directors in Class III. Directors serve for three-year terms with
one class of directors being elected by the Company's stockholders at each
annual meeting of stockholders.
At the Annual Meeting, three Class III Directors will be elected to serve
until the annual meeting of stockholders in 2005 and until such directors'
successors are duly elected and qualified. The Board of Directors has nominated
Larry G. Garberding, John G. Rice and John M. Shalikashvili for re-election as
Class III Directors. Unless otherwise specified in the proxy, it is the
intention of the persons named in the proxy to vote the shares represented by
each properly executed proxy for the re-election Larry G. Garberding, John G.
Rice and John M. Shalikashvili as directors. The nominees have agreed to stand
for re-election and to serve, if elected, as directors. 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 or persons as the Board of
Directors may recommend.
Vote Required For Approval
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.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE FOR THE ELECTION OF
EACH NOMINEE OF THE BOARD OF DIRECTORS AS A DIRECTOR OF THE COMPANY.
2
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors of the Company held eleven (11) meetings during the
fiscal year ended December 31, 2001 ("Fiscal 2001"). During Fiscal 2001, each
of the incumbent directors attended at least 75% of the total number of
meetings of the Board, held during the period such person served as a director,
and of the committees of which he or she was a member, during the period such
person served on such committee, except for Mr. Earley who attended 55% of the
total number of meetings of the Board. The Board of Directors has established
an Audit Committee (the "Audit Committee") and a Compensation Committee (the
"Compensation Committee").
Audit Committee
The Audit Committee consisting of Messrs. Garberding (Chairman) and
Shalikashvili and Anastasia M. Song held four (4) meetings during Fiscal 2001.
The Audit Committee of the Board of Directors of the Company is currently
composed of three non-employee directors. The Board has made a determination
that the members of the Audit Committee satisfy all requirements as to
independence, financial literacy and experience, except that Mr. Garberding is
not independent as defined in Nasdaq Marketplace Rule 4200(a)(14). Mr.
Garberding does not meet the independence definition because he was until
January 1, 2002, a director of DTE Energy Company, which holds 28.4% of our
Common Stock, and Executive Vice President and Chief Financial Officer of DTE
Energy and The Detroit Edison Company. Based on Mr. Garberding's unique
combination of extensive financial management, audit and accounting experience
and his knowledge and understanding of the Company and its industry, the Board
of Directors determined that Mr. Garberding's membership on the Audit Committee
was in the best interests of the Company and its stockholders. Effective
January 1, 2002, Mr. Garberding resigned all of his positions with DTE Energy
and The Detroit Edison Company.
Audit Committee Report
The responsibilities of the Audit Committee are set forth in the Charter of
the Audit Committee, which was adopted by the Board of Directors of the Company
on April 24, 2000. The Committee, among other matters, is responsible for the
annual recommendation of the independent accountants to be appointed by the
Board of Directors as the auditors of the Company, and reviews the arrangements
for and the results of the auditors' examination of the Company's books and
records, auditors' compensation, internal control procedures, and other
activities. The Audit Committee also reviews the Company's accounting policies,
control systems and compliance activities. The following is a report on the
Committee's activities relating to Fiscal 2001.
Review of Audited Financial Statements with Management
The Audit Committee reviewed and discussed the Company's audited financial
statements for Fiscal 2001 with the management of the Company.
Review of Financial Statements and Other Matters with Independent Accountant
The Audit Committee discussed with the independent auditors the matters
required to be discussed by SAS 61 (Codification of Statements on Auditing
Standards, AU Section 380), as may be modified or supplemented.
3
The Audit Committee has received the written disclosures and the letter from
the independent accountants required by Independence Standards Board Standard
No. 1 (Independence Standards Board Standard No. 1, Independence Discussions
with Audit Committees), as may be modified or supplemented, and has discussed
the matters contained therein with the independent accountants.
Recommendation that Financial Statements be Included in Annual Report
Based on the reviews and discussions referred to above, the Audit Committee
recommended to the Board of Directors that the audited financial statements be
included in the Company's Annual Report on Form 10-K for Fiscal 2001 for filing
with the Securities and Exchange Commission.
Recommend appointment of Independent Auditors
The Audit Committee recommended to the Board of Directors that the Company
appoint KPMG LLP as the Company's independent accountants for the fiscal year
ending December 31, 2002.
March 29, 2002
Audit Committee:
Larry G. Garberding (Chairman)
John M. Shalikashvili
Anastasia M. Song
Independent Auditors Fees
The following table presents fees for professional services rendered by KPMG
LLP for the audit of the Company's annual financial statements for Fiscal 2001,
and fees billed for other services rendered by KPMG LLP:
Audit Fees:.................... $65,000
Financial Information Systems:
Design and Implementation Fees None
All Other Fees................. None
Compensation Committee
The Compensation Committee consisting of Messrs. Earley and McNamee held
four meetings during Fiscal 2001. The Compensation Committee reviews and
determines compensation arrangements for officers and other senior level
employees, reviews general compensation levels for other employees as a group
and takes such other action as may be required in connection with the Company's
compensation and incentive plans. The Compensation Committee determines the
options or stock grants to eligible persons under the Company's 1999 Stock
Option and Incentive Plan (See EXECUTIVE COMPENSATION--"Report of the
Compensation Committee and the Board of Directors on Executive Compensation"
and "Compensation Committee Interlocks and Insider Participation").
4
Information about our Directors
Set forth below is certain information regarding the directors of the
Company, including the Class III Directors who have been nominated for
re-election at the Annual Meeting.
Director
Name Age Since
---- --- --------
Class I--Term Expires 2003
Dr. Roger B. Saillant....... 59 2000
Dr. Walter L. Robb.......... 74 1997
Anthony F. Earley, Jr.(2)... 52 1997
Class II--Term Expires 2004
George C. McNamee(2)........ 55 1997
Douglas T. Hickey........... 47 2000
Anastasia M. Song(1)........ 41 2001
Class III--Term Expires 2002
John M. Shalikashvili*(1)... 65 1999
Larry G. Garberding*(1)..... 63 1997
John G. Rice*............... 45 2000
--------
* Nominee for re-election.
(1) Member of Audit Committee.
(2) Member of the Compensation Committee.
The principal occupation and business experience for at least the last five
years for each director of the Company is set forth below.
Dr. Roger B. Saillant has served as President & Chief Executive Officer and
a member of the Board of Directors since December 2000. Prior to joining Plug
Power, Mr. Saillant spent over 30 years with Ford Motor Company and Visteon
Corporation, a full-service supplier of technology solutions to automotive
manufacturers within the automotive aftermarket, a spin-off of Ford, where he
most recently served as Vice President and General Manager of Visteon's Energy
Transformation Systems group. Mr. Saillant was responsible for several billion
in revenue, including Visteon's Distributive Power unit, and for overseeing
12,000 employees on four continents. While at Ford Motor Company and Visteon
Corporation, he held numerous management positions in the areas of component
engineering, catalysts, electronics, and manufacturing. Mr. Saillant holds a
Bachelor of Science degree in Chemistry from Bowdoin College and a Ph.D. in
Chemistry from Indiana University, as well as a post-doctorate degree in
Organometallic Chemistry from the University of California.
Dr. Walter Robb has served as a member of the Board of Directors of Plug
Power since June 1977. Since 1993, Dr. Robb has served as President of Vantage
Management, Inc., a management consulting firm. Prior to 1993, Dr. Robb served
as the Senior Vice President for Corporate Research and Development at General
Electric Company. In that capacity, Dr. Robb directed the GE Research and
Development Center and served on General Electric's Corporate Executive
Council. He serves on the Board of Directors of Mechanical Technology
Incorporated and Celgene Corporation, a specialty pharmaceutical company
engaged in the development and commercialization of human pharmaceuticals.
5
Anthony F. Earley, Jr. has served as a member of the Board of Directors
since June 1997. Mr. Earley has served as a director of DTE Energy Company
since 1994, as Chairman of the Board and Chief Executive Officer of DTE Energy
Company and its subsidiary, The Detroit Edison Company, since 1998, and as
President and Chief Operating Officer of DTE Energy and Detroit Edison since
1994. From 1989 to 1994, Mr. Earley served as the President and Chief Operating
Officer of Long Island Lighting Company. Mr. Earley currently serves as a
director of Comerica Bank, Mutual of America Capital Management Corporation and
Masco Corporation, a manufacturer of home improvement and building products.
Mr. Earley received a Bachelor of Science degree in Physics, a Master of
Science degree in Engineering, and a Juris Doctorate from the University of
Notre Dame.
George C. McNamee has served as Chairman of the Board of Directors since
June 1997. Mr. McNamee has served as Chairman since 1984 and as Co-Chief
Executive Officer since 1993 of First Albany Companies Inc., a specialty
investment banking firm. Mr. McNamee has served as a chairman of Mechanical
Technology Incorporated since 1996 and as Chief Executive Officer since 1998.
Mr. McNamee also serves as a director of MapInfo Corporation, a maker of
mapping software products, application development tools, and data products,
and the META Group, Inc., a company that provides market assessments for
clients in the information technology industry. Mr. McNamee is a member of the
Board of Directors of the New York Stock Exchange and the New York Conservation
Education Fund. Mr. McNamee received his Bachelor of Arts degree from Yale
University.
Douglas T. Hickey has served as a member of the Board of Directors since
September 2000. Since October 2001, Mr. Hickey has served as a Partner at
Hummer-Winblad Venture Partners. Prior to 2001, Mr. Hickey served as Chief
Executive Officer and Director of Critical Path Inc. Prior to joining Critical
Path, he was Senior Vice President of Frontier Corporation and President of
Frontier GlobalCenter, leading Frontier's strategic direction into the Internet
and data environment. Mr. Hickey joined GlobalCenter in its infancy and, as
Chief Executive Officer, built that company into one of the leading Web hosting
organizations, ultimately leading to its merger with Frontier. Prior to joining
GlobalCenter, he was President of Internet services at MFS Communications,
which acquired UUnet Technologies, the first commercial Internet service
provider. Before joining MFS, Mr. Hickey was general manager of North American
sales and field operation at wireless pioneer Ardis, a Motorola company. He led
Ardis's marketing and sales operation, including its successful direct and
indirect distribution channels. Mr. Hickey holds a degree in Economics from
Siena College.
Anastasia M. Song has served as a member of the Board of Directors since
August 2001. Since 1998, Ms. Song has served as Commissioner of the Port
Authority of New York and New Jersey, where she is also Chairperson of the
Finance Committee and serves on the Operations and Security Committee. Ms. Song
is also an energy and infrastructure consultant with twenty years experience in
infrastructure finance, operations, and quantitative analysis. Prior to 1998,
Ms. Song served as a Director at Credit Suisse First Boston's Global Asset
Finance group, and Director and head of the U.S. infrastructure and power
generation business of the group's subsequent spin-off, Global Capital Finance
LLC. Prior to joining Credit Suisse First Boston, Ms. Song served as Vice
President of Corporate Finance at Sithe Energies, Inc., an independent power
producer. Ms. Song also served as Assistant Secretary of Energy to Governor
George E. Pataki, and as Executive Director of the Long Island Power Authority,
where she oversaw the $7 billion acquisition of the Transmission and
Distribution system of the Long Island Lighting Company. Ms. Song received a
Bachelor of Arts degree from Bryn Mawr College and a Masters in Business
Administration from Fordham University.
6
John M. Shalikashvili (U.S. Army-ret.) has served as a member of the Board
of Directors since November 1999. General Shalikashvili was the senior officer
of the United States military and principal military advisor to the President
of the United States, the Secretary of Defense and National Security Council by
serving as the thirteenth Chairman of the Joint Chiefs of Staff, Department of
Defense, for two terms from 1993 to 1997. Prior to his tenure as Chairman of
the Joint Chiefs of Staff, he served as the Commander in Chief of all United
States forces in Europe and as NATO's tenth Supreme Allied Commander, Europe.
He has also served in a variety of command and staff positions in the
continental United States, Alaska, Belgium, Germany, Italy, Korea, Turkey and
Vietnam. General Shalikashvili is currently a director of L-3 Communications
Holdings, Inc., a manufacturer of communications and related equipment, The
Boeing Company and United Defense Industries, Inc., a privately held
manufacturer of military track equipment and naval armament. General
Shalikashvili received a Bachelor of Science degree in Mechanical Engineering
from Bradley University and a Master of Arts degree in International Affairs
from George Washington University, and he is a graduate of the Naval Command
and Staff College and the United States Army War College.
Larry G. Garberding has served as a member of the Board of Directors since
June 1997. Mr. Garberding was a director of DTE Energy Company from 1990
through 2001 and was Executive Vice President and Chief Financial Officer of
DTE Energy and its subsidiary, The Detroit Edison Company, from 1995 through
2001. Mr. Garberding received a Bachelor of Science degree in industrial
administration from Iowa State University. Mr. Garberding is extensively
involved with the United Way of Southern Michigan, is a director/trustee of the
Detroit Medical Center and the Detroit Symphony Orchestra Hall, and is a
Chairman of the Board of ArtServe Michigan.
John G. Rice has served as a member of the Board of Directors since July
2000. Mr. Rice serves as President and Chief Executive Officer of GE Power
Systems, a $20 billion segment of the General Electric Company that is
headquartered in Atlanta, Georgia. Mr. Rice began his General Electric career
in 1978 as a member of the Financial Management Program, moving to the
Corporate Audit Staff in 1981. He became Manager, Materials at GE Appliances,
Louisville in 1984. In 1986, he became Manager, Quality Control, Production
Engineering and Materials Operation for GE Appliances. Mr. Rice became
President, GEM Products, Inc., Garden Grove, California in 1987; following
which he held general management positions in Louisville in Consumer Service
and Production Operations. In August 1990, Mr. Rice became General Manager,
Material Resources, GE Appliances, and in 1992, he was named President and
Chief Operating Officer of Camco Inc. located in Canada. In 1994, he assumed
leadership of the Corporate Audit Staff and a year later was appointed
President, GE Plastics-Pacific in Singapore. Mr. Rice was appointed President
and CEO, GE Transportation Systems, Erie, PA in September, 1997. In June 2000,
Mr. Rice was named Chief Operating Officer of GE Power Systems and was named to
his current position at GE Power Systems in December, 2000. Mr. Rice attended
Hamilton College in Clinton, New York and graduated with a Bachelor of Arts in
Economics. He currently serves on the Board of Trustees of Hamilton College.
Director Compensation
Directors who are employees receive no additional compensation for their
services as directors. Non-employee directors receive cash compensation of
$1,000 for each Board meeting attended in person and $500 for each Board
meeting attended by telephone. Non-employee directors are eligible to
participate in our 1999 Stock Option and Incentive Plan at the discretion of
the full Board of Directors. In accordance with a policy approved by our Board
of Directors, upon initial election or appointment to the Board of Directors,
new non-employee directors receive non-qualified stock options to purchase
15,000 shares (50,000 shares for any new non-employee
7
Chairman) of Common Stock that are fully vested upon grant. Each year of a
non-employee director's tenure, the director will receive non-qualified options
to purchase 10,000 shares (20,000 shares for any non-employee Chairman), plus
non-qualified options to purchase an additional 5,000 shares for a non-employee
director serving as chairman of the Audit Committee and non-qualified options
to purchase an additional 2,000 shares for a non-employee director serving as
chairman of any other committee, including the Compensation Committee. These
annual options fully vest on the first anniversary of the date of grant. During
2001, options to purchase 15,000 shares were granted to Ms. Song, 10,000
options to purchase were granted to each of Messrs. Earley, Hickey, Rice, Robb
and Shalikashvili, 15,000 shares were granted to Mr. Garberding and 20,000
shares were granted to Mr. McNamee as compensation for their services as
directors. Each of Messrs. Earley and Garberding has assigned to DTE Energy
Company their right to receive cash director compensation and have assigned
their right to receive shares underlying any options and any proceeds from the
sale of such shares to DTE Energy. Mr. Rice has assigned to General Electric
Company his right to receive cash director compensation and has assigned his
right to receive shares underlying any options and any proceeds from the sale
of such shares to General Electric Company.
EXECUTIVE OFFICERS
The names and ages of all executive officers and key employees of the
Company and the principal occupation and business experience for at least the
last five years for each are set forth below.
Executive Officers Age Position
------------------ --- -----------------------------------------------------
Dr. Roger B. Saillant 58 President, Chief Executive Officer and Director
Gregory A. Silvestri. 41 Chief Operating Officer
W. Mark Schmitz...... 50 Vice President, Treasurer and Chief Financial Officer
Mark A. Sperry....... 41 Vice President and Chief Marketing Officer
Dr. John F. Elter.... 60 Vice President of Research and System Architecture
Gregory A. Silvestri has served as Chief Operating Officer since August
2000. In that capacity, Mr. Silvestri manages the full range of manufacturing
activities, product engineering and supply chain management. From June 1999 to
August 2000 Mr. Silvestri served as our Vice President of Operations. From May
1991 to May 1999, Mr. Silvestri served in a number of senior general management
positions responsible for North American and Asia-Pacific operations for Norton
Company, an operating unit of Saint-Gobain Corporation that supplies engineered
materials to a variety of industries. Prior to that, Mr. Silvestri served as an
Engagement Manager within the Industrial Practice Group of McKinsey & Company.
Mr. Silvestri received his Bachelor of Science and Engineering degree in
Chemical Engineering from Princeton University and a Masters in Business
Administration degree, with honors, from the University of Virginia.
W. Mark Schmitz has served as Vice President, Treasurer and Chief Financial
Officer since May 2001. In that capacity, Mr. Schmitz is responsible for
management of our finance, investor relations and information systems
departments. Prior to joining Plug Power, Mr. Schmitz spent 22 years with
General Motors Corporation, most recently serving as Vice President and Chief
Financial Officer of DirecTV Latin America, LLC, a subsidiary of Hughes
Corporation. Prior to that, Mr. Schmitz spent six years at General Motors do
Brasil, where he served as Treasurer, Controller, Executive Director of Finance
and President of Banco GM. Mr. Schmitz has also worked in various capacities in
controllership, treasury and business development in General Motors' operations
in the United States. Mr. Schmitz holds a Masters in Business Administration
degree from Ohio State University.
8
Mark A. Sperry has served as Vice President and Chief Marketing Officer
since May 2000. In that capacity, Mr. Sperry is responsible for all sales and
marketing activities including product strategy development, channel
management, market engagement, government relations and marketing
communications. Additionally, he manages our field service and applications
development activities. Prior to joining Plug Power, Mr. Sperry spent 15 years
at Xerox Corporation, where he most recently served as Vice President and
General Manager for the Production Color Business within the North American
Solutions Group. While at Xerox, he held a wide variety of positions spanning
finance, operations, marketing and strategy, including worldwide marketing
responsibility for the highly successful, multi-billion dollar DocuTech product
family. Mr. Sperry received a Bachelor's Degrees in Economics and Political
Science from Dickinson College and a Masters in Business Administration from
Syracuse University.
Dr. John F. Elter has served as Vice President of Research and Systems
Architecture since March 2001. Prior to joining Plug Power, Dr. Elter worked at
Eastman Kodak Corporation, where he most recently served as Vice President and
Chief Technology Officer in the professional division. Prior to Kodak, Dr.
Elter spent over 30 years at Xerox Corporation, where he held a variety of
management positions spanning advanced technology, engineering, quality,
strategy and architecture, business development and operations. Dr. Elter has a
proven track record in leading high technology innovation and product
commercialization, which included two major product platforms that have
generated over $40 billion in revenue. Dr. Elter holds a Bachelor of Science
degree in Mechanical Engineering from Purdue University, a Master of Science
degree in Mechanical Engineering from New York University, and a Ph.D. in
Mechanical and Aerospace Sciences from the University of Rochester.
Subject to the terms of any employment agreement with the Company, each of
the officers holds his or her respective office until the regular annual
meeting of the Board of Directors following the annual meeting of stockholders
and until his or her successor is elected and qualified or until his or her
earlier resignation or removal.
9
EXECUTIVE COMPENSATION
Summary Compensation
The following table sets forth information concerning compensation for
services rendered in all capacities awarded to, earned by or paid to the
individuals serving as the Company's Chief Executive Officer and the four other
most highly compensated executive officers during Fiscal 2001.
Summary Compensation Table
Annual Compensation Long-Term Compensation
--------------------- ------------------------------------
Restricted Securities
Stock Underlying All Other
Name and Principal Position Year Salary Bonus Awards($)(1) Options(#) Compensation
--------------------------- ---- -------- ------- ------------ ---------- ------------
Dr. Roger B. Saillant(2)...... 2001 $300,000 $ -- $84,900 11,747 $ 12,849
President and 2000 -- 85,875 -- 750,000 --
Chief Executive Officer 1999 -- -- -- -- --
Gregory A. Silvestri(3)....... 2001 234,038 66,505 39,247 60,000 117,500
Chief Operating Officer 2000 205,608 60,000 -- 50,000 --
1999 93,688 12,800 19,200 200,000 --
W. Mark Schmitz(4)............ 2001 138,462 70,750 -- 257,789 59,816
Vice President, Treasurer and 2000 -- -- -- -- --
Chief Financial Officer 1999 -- -- -- -- --
Mark A. Sperry(5)............. 2001 204,520 58,015 -- 85,027 2,819
Vice President and Chief 2000 134,615 30,000 -- 140,000 80,965
Marketing Officer 1999 -- -- -- -- --
Dr. John F. Elter(6).......... 2001 193,846 98,763 -- 135,810 37,813
Vice President of Research 2000 -- -- -- -- --
and System Architecture 1999 -- -- -- -- --
--------
(1) The amounts in this column represent shares of restricted Common Stock. The
recipients of restricted Common Stock awards are entitled to receive
dividends on shares they hold prior to vesting.
On November 14, 2001, the Company awarded 9,953 shares of Restricted
Stock to Dr. Saillant and 4,601 shares of Restricted Stock to Mr. Silvestri,
for services rendered in 2001, valued at $8.53 per share, which was based on
the closing market price of the Common Stock on the date of grant. Dr.
Saillant must be employed through November 14, 2004, to receive the Common
Stock free of restriction. Of the restricted shares awarded to Mr.
Silvestri, 2,300 will vest on November 14, 2002 and 2,301 will vest on
November 14, 2003. The vesting provisions require that Mr. Silvestri is
employed by Plug Power through November 14, 2002 and November 14, 2003,
respectively, at which time he will receive the Common Stock free of
restriction.
On January 28, 2000, the Company awarded 230 shares of Restricted Stock
to Mr. Silvestri, for services rendered in 1999, valued at $83.50 per share,
which was based on the closing market price of the Common Stock on the date
of grant. Mr. Silvestri became fully vested in the award on January 28, 2001
and received the Common Stock free of restriction.
10
(2) Dr. Saillant started with Plug Power in December 2000. The amount of other
compensation represents the dollar value of matching contributions we made
under our 401(k) Savings and Retirement Plan in the amount of $6,000 and
moving and relocation expenses of $6,849 paid by the Company.
(3) Mr. Silvestri started with Plug Power in July 1999. The amount of other
compensation represents the taxable amount attributable to the exercise of
non-qualified employee stock options. Mr. Silvestri exercised and sold
25,000 options, at the time of our public offering on July 19, 2001, with
an exercise price of $6.67 per share and a market value of $11.37 per share.
(4) Mr. Schmitz started with Plug Power in June 2001. The amount of other
compensation represents the dollar value of matching contributions we made
under our 401(k) Savings and Retirement Plan in the amount of $769 and
moving and relocation expenses of $59,047 paid by the Company.
(5) Mr. Sperry started with Plug Power in May 2000. The amount of other
compensation in 2001 represents the dollar value of matching contributions
we made under our 401(k) Savings and Retirement Plan in the amount of
$2,819 and the amount in 2000 represents moving and relocation expenses of
$80,965 paid by the Company.
(6) Mr. Elter started with Plug Power in March 2001. The amount of other
compensation represents the dollar value of matching contributions we made
under our 401(k) Savings and Retirement Plan in the amount of $2,942 and
moving and relocation expenses of $34,871 paid by the Company.
Option Grants In Last Fiscal Year
Potential Realizable Value at
Assumed Annual Rates of
Stock Price Appreciation
Individual Grants for Option Term(2)
-------------------------------------------- -----------------------------
Number of Percent of
Securities Total Options
Underlying Granted to Exercise
Options Employees in Price Expiration
Name Granted(1) Fiscal Year (Share) Date 5% 10%
---- ---------- ------------- -------- ---------- ---------- ----------
Dr. Roger B. Saillant(3) 11,747 0.5% $ 8.53 11/14/2011 $ 63,000 $ 159,700
Gregory A. Silvestri(4). 30,000 1.3% 17.94 1/11/2011 338,500 857,800
30,000 1.3% 8.53 11/14/2011 160,900 407,800
W. Mark Schmitz(5)...... 220,000 9.6% 24.53 5/16/2011 3,393,900 8,600,800
37,789 1.7% 8.53 11/14/2011 202,700 513,700
Mark A. Sperry(6)....... 50,000 2.2% 17.94 1/11/2011 564,100 1,429,600
35,027 1.5% 8.53 11/14/2011 187,900 476,200
Dr. John F. Elter(7).... 100,000 4.4% 17.88 2/20/2011 1,124,500 2,849,600
35,810 1.6% 8.53 11/14/2011 192,100 486,800
--------
(1) All options were granted under our 1999 Stock Option Plan and have a
10-year term.
(2) Potential realizable value is based on the assumption that Plug Power's
Common Stock appreciates at the annual rate shown, compounded annually,
from the date of grant until expiration of the 10-year term. These numbers
are calculated based upon Securities and Exchange Commission requirements
and do not reflect Plug Power's projection or estimate of future stock
price growth. Potential realizable values are computed by multiplying the
number of shares of Common Stock subject to a given option by the fair
market value on the date of grant, assuming that the aggregate stock value
derived from that calculation compounds at the annual 5% or 10% rate shown
in the table for the entire 10-year term of the option and subtracting from
that the aggregate option exercise price.
11
(3) All options shown in this table as granted to Dr. Saillant vest 50% on each
of the first and second anniversaries of the date of grant.
(4) All options shown in this table as granted to Mr. Silvestri vest 33.3% on
each of the first, second and third anniversaries of the date of grant.
(5) Of the options shown in this table as granted to Mr. Schmitz, 220,000 of
such options shall vest 25% on each of the first, second, third and fourth
anniversaries of the date of grant; 28,000 of such options shall vest 33.3%
on each of the first, second and third anniversaries of the date of grant
and 9,789 of such options shall vest 50% on each of the first and second
anniversaries of the date of grant.
(6) Of the options shown in this table as granted to Mr. Sperry, 77,000 of such
options shall vest 33.3% on each of the first, second and third
anniversaries of the date of grant; and 8,027 of such options shall vest
50% on each of the first and second anniversaries of the date of grant.
(7) Of the options shown in this table as granted to Mr. Elter, 100,000 of such
options vested immediately; 27,000 of such options shall vest 33.3% on each
of the first, second and third anniversaries of the date of grant; and
8,810 of such options shall vest 50% on each of the first and second
anniversaries of the date of grant.
Fiscal Year-End Option Values
Option Exercises and Option Values. The following table sets forth
information concerning the number and value of unexercised options to purchase
Common Stock of the Company held by the Named Executive Officers of the Company
who held such options at December 31, 2001.
Aggregated Option Exercises in the Last Fiscal Year and Fiscal Year-End Option
Values
Number of Securities
Underlying Unexercised Value of Unexercised
Options at Fiscal In-the-Money Options
Year-End(#) at Fiscal Year-End($)(1)
------------------------- -------------------------
Shares
Acquired on Value
Name Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ----------- ----------- ------------- ----------- -------------
Dr. Roger B. Saillant -- $ -- 112,500 649,247 $ -- $ 2,467
Gregory A. Silvestri. 25,000 117,500 115,000 170,000 196,650 171,900
W. Mark Schmitz...... -- -- -- 257,789 -- 7,936
Mark A. Sperry....... -- -- 45,500 179,527 -- 7,356
Dr. John F. Elter.... -- -- 100,000 35,810 -- 7,520
--------
(1) Based on the last reported sale price on the Nasdaq National Market on
December 31, 2001, less the option exercise price.
Employment Agreements
Dr. Saillant has a one-year employment agreement with the Company which
automatically renews for successive one-year periods unless the Company or Dr.
Saillant gives notice to the contrary. Dr. Saillant receives an annual base
salary of $300,000 and is eligible to: (i) receive an annual incentive bonus
with a target amount equal to 100 percent of his annual base salary; (ii)
participate in all savings and retirement plans; and (iii) participate in all
benefit and executive perquisites. Dr. Saillant's employment may be terminated
by the Company for "cause", as defined in the agreement, or by Dr. Saillant for
"good reason", as defined in the agreement, or without "good reason" upon sixty
days' prior notice to the Company. If Dr. Saillant's employment is terminated
by the Company for any reason other than cause, death or disability, or in the
event that Dr. Saillant
12
terminates his employment with the Company and is able to establish "good
reason", the Company is obligated to pay Dr. Saillant the sum of the following
amounts: (i) his expected bonus through the date of termination; plus (ii)
either, two years' annual base salary and two years' expected bonus if the date
of termination occurs within one year after a change in control of the Company,
or one year's annual salary and expected bonus if the termination occurs either
in the absence of a change in control or more than one year after a change in
control. In the event, of a termination for "good reason," Dr. Saillant is
entitled to be fully vested in any outstanding restricted stock, stock options
and other stock awards previously granted. Furthermore, the Company is required
to continue paying health insurance and other benefits to Dr. Saillant and his
eligible family members for the applicable period.
The Company and Mr. Silvestri are parties to an agreement pursuant to which
he will receive 100% of his base salary, continuation of employee benefits and
vesting of stock options for twelve months if his employment is terminated for
any reason, including voluntary termination. Mr. Silvestri's agreement survives
both or either (a) a merger, reorganization or consolidation, or (b) a sale of
all or substantially all of the assets or stock of our company.
[The following Report of the Compensation Committee of the Board of
Directors on Executive Compensation, and the Shareholder Return Performance
Graph on page [13] will not be deemed incorporated by reference by any general
statement incorporating by reference this Proxy Statement into any of the
Company's 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.]
Report of the Compensation Committee of the Board of Directors on Executive
Compensation
The Compensation Committee reviews and evaluates individual executive
officers and determines the compensation for each executive officer. In
general, compensation is designed 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 Company's stockholders.
Compensation for the Named Executive Officers during Fiscal 2001 included
salary, bonus and incentive awards. Base salary was determined by reviewing the
previous levels of base salary, base salaries paid by comparable companies to
executives with similar responsibilities, perceived level of individual
performance and the overall performance of the Company. No specific weight was
given to any of these factors in the evaluation of base salaries because each
of these factors was considered significant and the relevance of each varies
depending on an officer's responsibilities.
For Fiscal 2001, bonus amounts were based on the Named Executive Officers'
specific contributions made during the year toward the Company's goals
established at the beginning of the year. Bonus amounts were paid in both cash
and stock during the fourth quarter of Fiscal 2001. Stock options are also
granted to executive officers based upon their specific responsibilities and
are granted by the Compensation Committee. The Compensation Committee believes
that with the current salary and bonus structure along with stock option
grants, which generally vest equally over three or four years, the executive
team is properly motivated to achieve the short- and long-term goals of the
Company.
Chief Executive Officer's Fiscal 2001 Compensation
The Compensation Committee determined Dr. Saillant's annual base salary and
incentives (as described under the caption "Employment Agreements") in
accordance with the principles and methods applied to other
13
executive officers at similar companies. As President and Chief Executive
Officer of the Company, Dr Saillant was eligible to participate in the same
executive compensation programs available to the Company's other Executive
Officers.
During fiscal 2001, Dr. Saillant received an annual base salary of $300,000.
In order to conserve cash resources Dr. Saillant recommended to the Committee
that his incentive bonus, for fiscal 2001, be paid in the form of long-term
restricted stock. The Committee accepted this proposal and Dr. Saillant was
awarded 9,953 shares of restricted stock, with a value of $84,900 at the time
of the grant, which will become fully vested in fiscal 2004. In addition to his
base salary and incentive bonus and pursuant to the terms of his employment
agreement, Dr. Saillant received a restricted stock award of 19,200 shares
which will vest equally over four years and is equivalent to the number of
restricted shares he forfeited as a result of his retirement from Ford/Visteon.
Finally, Dr. Saillant was awarded 11,747 stock options as part of the Company's
long-term incentive compensation program (see "Option Grants In Last Fiscal
Year").
Compliance with Internal Revenue Code Section 162(m)
The Budget Reconciliation Act of 1993 amended the Internal Revenue Code to
add Section 162(m), which bars a deduction to any publicly held corporation for
compensation paid to a "covered employee" in excess of $1 million per year. The
Compensation Committee does not believe that this law will impact the Company
because the current level of compensation for each of the Company's executive
officers is well below the $1 million salary limitation. The Compensation
Committee will continue to evaluate the impact of such provisions and take such
actions as it deems appropriate.
Compensation Committee:
Anthony F. Earley, Jr.
George C. McNamee
Compensation Committee Interlocks and Insider Participation
During Fiscal 2001, Messrs. Earley and McNamee, neither of whom is an
employee of the Company, served as members of the Compensation Committee. For
information regarding their relationships with the Company, see "Certain
Relationships and Related Transactions" below.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
First Albany Companies Inc. (FAC), owns approximately 33.1% of the
outstanding Common Stock of Mechanical Technology Inc. (MTI) which beneficially
owns approximately 24.4% of our Common Stock. George C. McNamee, the Chairman
and Co-Chief Executive Officer of FAC and the Chief Executive Officer and a
director of MTI, is currently the Chairman of the Board of Directors of Plug
Power. Dr. Walter L. Robb, a director of MTI, is a director of Plug Power.
FAC/Equities, a division of First Albany Corporation which is a wholly-owned
subsidiary of FAC, acted as co-manager of the Company's public offering of
Common Stock which was completed in July 2001.
Edison Development Corporation (EDC) beneficially owns approximately 28.4%
of our outstanding Common Stock. Anthony F. Earley, Jr., the Chairman, Chief
Executive Officer, President and Chief Operating
14
Officer of DTE Energy Company, is a director of Plug Power. Larry G.
Garberding, was a director, Executive Vice President and Chief Financial
Officer of DTE Energy Company during 2001 and is also director of Plug Power.
Effective January 1, 2002, Larry G. Garberding resigned all of his positions
with DTE Energy Company. DTE Energy Company is the parent company of EDC.
GEPS Equities, Inc., an indirect wholly-owned subsidiary of General Electric
Company that operates within its GE Power Systems business, beneficially owns
approximately 12.5% of our outstanding Common Stock. John G. Rice, President
and Chief Executive Officer of GE Power Systems, is a director of the Company.
Pursuant to an agreement with GE MicroGen, the Company has agreed to use its
best efforts to cause one individual nominated by GE Power Systems, Inc. to be
elected to our Board of Directors for as long as our distribution agreement
with GEFCS is in effect.
In February 1999, we entered into a joint venture agreement with GE
MicroGen, Inc. to form GE Fuel Cell Systems, LLC (GEFCS), to exclusively
market, sell, install and service certain of our PEM fuel cell systems under 35
kW designed for use in residential, commercial and industrial stationary power
applications on a global basis, with the exception of the states of Illinois,
Indiana, Michigan and Ohio, in which DTE Energy Technologies, Inc., has
exclusive distribution rights. GE MicroGen, Inc. is a wholly owned subsidiary
of General Electric Company that operates within the GE Power Systems business.
In August 2001, we amended our agreements with GE Microgen and GEFCS to
expand GEFCS' exclusive worldwide distribution rights to include all of our
stationary PEM fuel cell systems. In addition, we increased our ownership
interest in GEFCS from 25% to 40%. In return, we granted GE Power Systems
Equities, Inc. an option to purchase 725,000 shares of our common stock at an
exercise price of $15.00 per share. We also replaced the product
specifications, prices and delivery schedule in our distribution agreement with
a high-level, multi-generation product plan, with subsequent modifications
being subject to mutual agreement, and extended the term of the agreement by an
additional five years to December 31, 2014.
Under a separate agreement, we have agreed to source from General Electric
technical support services for our product development effort, including
engineering, testing, manufacturing and quality control services. We have
committed to purchase a minimum of $12.0 million of such services over a five
year period, which began September 30, 1999. Through December 31, 2001, we have
purchased approximately $5.0 million of such services. We have also entered
into a separate agreement with General Electric Company under which General
Electric acts as our agent in procuring certain equipment, parts and
components. In addition, General Electric has agreed to provide training
services to our employees regarding procurement activities.
15
SHAREHOLDER RETURN PERFORMANCE GRAPH
Below is a line graph comparing the percentage change in the cumulative
total shareholder return on the Company's Common Stock, based on the market
price of the Company's Common Stock, with the total return of companies
included within the Nasdaq Composite Index and the companies included within
the Standard & Poor's High Tech Composite Index for the period commencing
October 29, 1999 and ending December 31, 2001. The calculation of total
cumulative return assumes a $100 investment in the Company's Common Stock, the
Nasdaq Composite Index and the Nasdaq Standard & Poor's High Tech Composite
Index on October 29, 1999, the date of the Company's initial public offering,
and the reinvestment of all dividends. The beginning measurement point is
established by the market close on October 29, 1999, the first day on which the
Company's Common Stock was publicly traded.
[CHART]
S&P High Tech NASDAQ
Plug Power Composite Marktet Index
---------- ------------- ------------
10/29/1999 $100.00 $100.00 $100.00
12/31/1999 176.56 127.47 137.18
12/31/2000 91.81 79.30 83.28
12/31/2001 54.63 62.97 65.75
16
PRINCIPAL STOCKHOLDERS
The following table sets forth information regarding the beneficial
ownership of our Common Stock as of March 29, 2002 by:
. all persons known by us to own beneficially 5% or more of the Common
Stock;
. each of our directors;
. the executive officers listed in the Summary Compensation Table; and
. all directors and executive officers as a group.
Shares Beneficially Owned(1)
---------------------------
Name of Beneficial Owner Number(2) Percent
------------------------ ---------- -------
DTE Energy Company(3)............................................................... 14,350,981 28.4%
Mechanical Technology Incorporated.................................................. 12,276,390 24.4
General Electric Company(4)......................................................... 6,391,666 12.5
Anthony F. Earley, Jr.(5)........................................................... 14,399,981 28.6
Larry G. Garberding(6).............................................................. 65,000 *
Douglas T. Hickey(7)................................................................ 25,000 *
George C. McNamee(8)................................................................ 12,506,390 24.7
John G. Rice(9)..................................................................... 6,416,666 12.6
Dr. Walter L. Robb(10).............................................................. 115,000 *
John M. Shalikashvili(11)........................................................... 45,500 *
Dr. Roger B. Saillant(12)........................................................... 157,766 *
Gregory A. Silvestri 13)............................................................ 177,544 *
W. Mark Schmitz(14)................................................................. 62,598 *
Mark Sperry(15)..................................................................... 77,312 *
Dr. John F. Elter(16)............................................................... 101,258 *
All executive officers, directors, and director-nominees as a group (13 persons)(17) 35,105,015 67.1
--------
* Represents less than 1% of the outstanding shares of Common Stock
(1) 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. The address of Mechanical Technology, Inc. is
431 New Karner Road, Albany, New York 12205. The address of Edison
Development Corporation is c/o DTE Energy Company, 2000 Second Avenue, 644
WCB, Detroit, Michigan 48226. The address of General Electric is c/o GE
Power Systems, One River Road, Schenectady, New York 12345. The address of
all other listed stockholders 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 Securities and Exchange Commission and
includes voting or investment power with respect to securities. Under
these rules, beneficial ownership includes any shares as 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 after March 29, 2002,
through the exercise of any warrant, stock option or other right. The
inclusion in this proxy statement 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
17
person includes the shares of Common Stock underlying options held by such
person that are exercisable within 60 days of March 29, 2002, but excludes
shares of Common Stock underlying options held by any other person.
Percentage of beneficial ownership is based on 50,359,220 shares of Common
Stock outstanding as of March 29, 2002.
(3) Includes 14,350,981 shares owned of record by Edison Development
Corporation, an indirect wholly-owned subsidiary of DTE Energy Company, of
which 230,000 are shares of Common Stock issuable upon the exercise of
outstanding options that are exercisable within 60 days of March 29, 2002.
(4) Includes 5,666,666 shares of Common Stock owned of record by GEPS
Equities, Inc., an indirect wholly-owned subsidiary of General Electric
Company that operates within its GE Power Systems business and 725,000
shares of Common Stock issuable upon the exercise of an outstanding option
that is exercisable within 60 days of March 29, 2002, by GEPS Equities,
Inc.
(5) Includes 14,350,981 shares owned of record by Edison Development
Corporation, an indirect wholly-owned subsidiary of DTE Energy Company, of
which 230,000 are shares of Common Stock issuable upon the exercise of
outstanding options that are exercisable within 60 days of March 29, 2002.
Mr. Earley, a director and executive officer of DTE Energy, may be deemed
the beneficial owner of these shares. Mr. Earley disclaims beneficial
ownership of these shares.
Also includes 45,000 shares of Common Stock issuable upon exercise of
outstanding options held by Mr. Earley that are exercisable within 60 days
of March 29, 2002. Mr. Earley has assigned to DTE Energy Company his right
to receive the shares underlying such options and any proceeds from the sale
of such shares.
(6) Includes 55,000 shares of Common Stock issuable upon exercise of
outstanding options that are exercisable within 60 days of March 29, 2002.
(7) Includes 25,000 shares of Common Stock issuable upon exercise of
outstanding options that are exercisable within 60 days of March 29, 2002.
(8) Includes 12,276,390 shares of Common Stock owned of record by Mechanical
Technology. Mr. McNamee, a director and Chief Executive Officer of
Mechanical Technology, may be deemed the beneficial owner of these shares.
Mr. McNamee disclaims beneficial ownership of these shares.
Also includes 220,000 shares of Common Stock issuable upon exercise of
outstanding options held by Mr. McNamee that are exercisable within 60 days
of March 29, 2002.
(9) Includes 5,666,666 shares of Common Stock owned of record by GEPS
Equities, Inc., an indirect wholly-owned subsidiary of General Electric
Company that operates within its GE Power Systems business and 725,000
shares of Common Stock issuable upon the exercise of an outstanding option
that is exercisable within 60 days of March 29, 2002, by GEPS Equities,
Inc. Mr. Rice, a Senior Vice President of General Electric Company and the
President and Chief Executive Officer of GE Power Systems, disclaims
beneficial ownership of these shares.
Also includes 25,000 shares of Common Stock issuable upon exercise of
outstanding options held by Mr. Rice that are exercisable within 60 days of
March 29, 2002. Mr. Rice has assigned to General Electric Company his right
to receive the shares underlying such options and any proceeds from the sale
of such shares.
(10) Includes 105,000 shares of Common Stock issuable upon exercise of
outstanding options that are exercisable within 60 days of March 29, 2002.
(11) Includes 45,000 shares of Common Stock issuable upon exercise of
outstanding options that are exercisable within 60 days of March 29, 2002.
(12) Includes 112,500 shares of Common Stock issuable upon exercise of
outstanding options that are exercisable within 60 days of March 29, 2002.
18
(13) Includes 175,000 shares of Common Stock issuable upon exercise of
outstanding options that are exercisable within 60 days of March 29, 2002.
(14) Includes 55,000 shares of Common Stock issuable upon exercise of
outstanding options that are exercisable within 60 days of March 29, 2002.
(15) Includes 76,165 shares of Common Stock issuable upon exercise of
outstanding options that are exercisable within 60 days of March 29, 2002.
(16) Includes 100,000 shares of Common Stock issuable upon exercise of
outstanding options that are exercisable within 60 days of March 29, 2002.
(17) Includes 2,181,165 shares of Common Stock issuable upon exercise of
outstanding options, by the executive officers and directors as a group,
that are exercisable within 60 days of March 29, 2002.
EXPENSES OF SOLICITATION
The Company will pay the entire expense of soliciting proxies for the Annual
Meeting. 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 by
telephone, telegram or personal interview. 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 expenses.
SUBMISSION OF STOCKHOLDER PROPOSALS FOR 2003 ANNUAL MEETING
Any stockholder proposals submitted pursuant to Exchange Act Rule 14a-8 and
intended to be presented at the 2003 Annual Meeting must be received by the
Company on or before December 25, 2002 to be eligible for inclusion in the
Company's 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: Secretary, Plug Power Inc., 968 Albany-Shaker Road, Albany, New York, 12110.
Any stockholder proposals (including recommendations of nominees for
election to the Board of Directors) intended to be presented at the Company's
2003 Annual Meeting, 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 May
16, 2003; provided, however, that if the date of the 2003 Annual Meeting is
more than 30 days before or more than 60 days after May 16, 2003, such
proposals must be received not more than 120 days prior to the date of the 2003
Annual Meeting and not later than the later of (a) 90 days prior to the date of
the 2003 Annual Meeting or (b) the 10th day following the date on which public
announcement of the 2003 Annual Meeting is made, as set forth in the Company's
By-laws. Stockholder proposals must include all supporting documentation
required by the Company's 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.
INDEPENDENT ACCOUNTANTS
The Company engaged KPMG LLP as the Company's independent public accountants
effective December 3, 2001. Prior to that date, PricewaterhouseCoopers had been
the Company's independent accountants. The Company's Board of Directors, upon
recommendation of its Audit Committee, approved the engagement of
19
KPMG. During the Company's two most recent fiscal years and the subsequent
interim period prior to engaging KPMG, neither the Company nor anyone on its
behalf consulted with KPMG regarding either (i) the application of accounting
principles to a specific transaction, either completed or proposed, or the type
of audit opinion that might be rendered on the Company's financial statements,
and neither a written report nor oral advice was provided to the Company by
KPMG that was an important factor considered by the Company in reaching a
decision as to any accounting, auditing or financial reporting issue; or (ii)
any matter that was either the subject of a disagreement, as that term is
defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions to
Item 304 of Regulation S-K, or a reportable event, as that term is defined in
Item 304(a)(1)(v) of Regulation S-K.
On November 20, 2001, the Company dismissed PricewaterhouseCoopers LLP as
its independent accountants. The reports of PricewaterhouseCoopers LLP on the
Company's consolidated financial statements for each of the two years in the
period ended December 31, 2000 and 1999, did not contain any adverse opinion or
disclaimer of opinion and were not qualified or modified as to uncertainty,
audit scope, or accounting principles. During the two years in the period ended
December 31, 2000, and the subsequent interim period preceding the dismissal of
PricewaterhouseCoopers LLP on November 20, 2001, there were no disagreements
with PricewaterhouseCoopers LLP on any matters of accounting principles or
practices, financial statement disclosure, or auditing scope or procedures
which, if not resolved to the satisfaction of PricewaterhouseCoopers LLP, would
have caused the firm to make reference to the matter of the disagreement in
their reports. During the two years in the period ended December 31, 2000, and
the subsequent interim period preceding the dismissal of PricewaterhouseCoopers
LLP on November 20, 2001, no reportable events occurred in connection with the
relationship between PricewaterhouseCoopers LLP and the Company.
The Board of Directors has appointed KPMG LLP as the Company's independent
accountants for the fiscal year ending December 31, 2002. A KPMG LLP
representative will be present at the Annual Meeting and will be given the
opportunity to make a statement if he or she so desires. The representative
will be available to respond to appropriate questions. A representative of
PricewaterhouseCoopers LLP is not expected to be present at the Annual Meeting.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors, and persons who own more than 10% of the
Company's outstanding shares of Common Stock (collectively, "Section 16
Persons"), to file initial reports of ownership and reports of changes in
ownership with the Securities and Exchange Commission and Nasdaq. Section 16
Persons are required by SEC regulations to furnish the Company with copies of
all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by it and
written representations from certain Section 16 Persons that no other Section
16(a) reports were required for such persons, the Company believes that during
Fiscal 2001 the Section 16 Persons complied with all Section 16(a) filing
requirements applicable to them, except as set forth below.
On December 15, 2000, Dr. Saillant was appointed as a Director and as
President and Chief Executive Officer of the Company and received an initial
stock option grant, which should have been reported on a Form 3 no later than
December 26, 2000. Dr. Saillant filed a Form 3 on January 10, 2001.
20
On August 8, 2001, Ms. Song, was appointed as a Director of the Company and
received an initial stock option grant, which should have been reported on a
Form 3 no later than August 20, 2001. Ms. Song filed a Form 3 on October 17,
2001.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors is not aware
of any matters other than those described in this Proxy Statement that will be
presented for action at the Annual Meeting. If other matters are duly
presented, proxies will be voted in accordance with the best judgment of the
proxy holders.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING IN PERSON, YOU ARE
REQUESTED TO COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD IN THE
ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
21
Please date, sign and mail your
proxy card back as soon as possible!
Annual Meeting of Stockholders
PLUG POWER INC.
Please Detach and Mail in the Envelope Provided
--------------------------------------------------------------------------------
Please mark your
A [X] votes as in this
example.
FOR all nominees
listed at right (except ABSTAIN
as marked to the to vote for
contrary below) all nominees
Proposal 1:
Election of three [_] [_]
Class III Directors,
each to hold office
until the Company's 2005 Annual Meeting of Stockholders and
until his successor is duly elected and qualified.
To abstain to vote for any individual nominee, write that nominee's
name in the space below:
___________________________________________________________________
NOMINEES:
Larry G. Garberding
John G. Rice
John M. Shalikashvili
In their discretion, the Proxy holders are each authorized to vote upon such
other business as may properly come before the Annual Meeting and any
adjournments or postponements thereof.
Please be sure to sign and date this Proxy.
PLEASE, SIGN, DATE AND PROMPTLY MAIL YOUR PROXY.
Stockholder(s) Signature: Dated: , 2002
---------------------------- -----------
NOTE: Please sign name exactly as shown here. If more than one holder, each
should sign. When signing as an attorney, administrator, executor,
guardian or trustee, please add your title as such. If executed by a
corporation or partnership, the proxy should be signed by a duly
authorized person, indicating title or authority.
PLUG POWER INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS OF PLUG POWER INC. FOR THE
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON THURSDAY, MAY 16, 2002
The undersigned hereby constitutes and appoints David Neumann and Ana-Maria
Galeano Proxies of the undersigned, with full power of substitution in each of
them, and authorizes each of them to represent and to vote all shares of common
stock, par value $.01 per share, of Plug Power Inc. (the "Company") held of
record by the undersigned as of the close of business on March 22, 2002, at the
Company's Annual Meeting of Stockholders (the "Annual Meeting") to be held at
the Albany Marriott, 189 Wolf Road, Albany, New York, at 10:00 a.m. local time,
on Thursday, May 16, 2002, and at any adjournments or postponements thereof.
WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER(S). IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE
VOTED FOR THE ELECTION OF EACH OF THE NOMINEES LISTED IN PROPOSAL 1. IN THEIR
DISCRETION, THE PROXY HOLDERS ARE EACH AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE ANNUAL MEETING AND ANY ADJOURNMENTS OR
POSTPONEMENTS THEREOF. A STOCKHOLDER WISHING TO VOTE IN ACCORDANCE WITH THE
BOARD OF DIRECTORS' RECOMMENDATIONS NEED ONLY SIGN AND DATE THIS PROXY AND
RETURN IT IN THE ENCLOSED ENVELOPE.
The undersigned hereby acknowledge(s) receipt of a copy of the accompanying
Notice of Annual Meeting of Stockholders, the Proxy Statement with respect
thereto and the Company's Annual Report to Stockholders and hereby revoke(s) any
proxy or proxies heretofore given. This proxy may be revoked at any time before
it is exercised.
PLEASE SIGN AND DATE ON REVERSE SIDE AND RETURN PROMPTLY
IN THE ENCLOSED ENVELOPE.