Item 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
2023 Long Term Incentive Plan and Awards
On December 5, 2022, the Board of Directors (the “Board”) of FuelCell Energy, Inc. (the “Company”) approved a 2023 Long Term Incentive Plan (the “2023 LTI Plan”) as a sub-plan consisting of awards made under the Company’s 2018 Omnibus Incentive Plan, as amended and restated. The participants in the 2023 LTI Plan are members of senior management and include the Company’s named executive officers named in the table below (“NEOs”).
The 2023 LTI Plan consists of two award components: (1) relative total shareholder return (“TSR”) performance shares and (2) time-vesting restricted stock units.
The TSR performance shares granted in fiscal year 2023 will be earned over the three-year performance period ending on October 31, 2025, but will remain subject to a continued service-based vesting requirement until the third anniversary of the date of grant. The performance measure for the relative TSR performance shares is the TSR of the Company relative to the TSR of the Russell 2000 from November 1, 2022 through October 31, 2025. For purposes of calculating TSR, the Company’s stock price will be measured using the average closing price over the 60 consecutive trading days preceding the measurement date.
The time-vesting restricted stock units granted in fiscal year 2023 will vest at a rate of one-third (1/3) of the total number of restricted stock units on each of the first three anniversaries of the date of grant.
None of the awards granted as part of the 2023 LTI Plan include any dividend equivalent or other stockholder rights. To the extent the awards are earned, they may be settled in shares or cash of an equivalent value.
The Form of Relative TSR Performance Share Award Agreement used for the TSR performance shares was previously filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on November 27, 2020 and the Form of Restricted Stock Unit Award Agreement (U.S. Employees) used for the time-vesting restricted stock units was previously filed as Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on April 6, 2018.
The target award values under the 2023 LTI Plan for the NEOs are as follows:
| |
Named Executive Officer | Target 2023 LTI Plan Award |
Jason Few President and Chief Executive Officer | $2,860,000 |
Michael S. Bishop Executive Vice President and Chief Financial Officer | $650,000 |
Michael J. Lisowski Executive Vice President and Chief Operating Officer | $650,000 |
Joshua Dolger Executive Vice President, General Counsel and Corporate Secretary | $500,000 |
Anthony J. Leo Executive Vice President and Chief Technology Officer | $400,000 |
In addition, the target award value under the 2023 LTI Plan for Mark Feasel, the Company’s Executive Vice President and Chief Commercial Officer, is $650,000.
The target number of performance shares and the number of time-vesting restricted stock units granted as of December 5, 2022 were determined by dividing one-half of the target 2023 LTI Plan award by the average price of the Company’s common stock over the 60 consecutive trading days preceding the grant date.