UNITED STATES | |||
SECURITIES AND EXCHANGE COMMISSION | |||
Washington, D.C. 20549 | |||
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SCHEDULE 14A INFORMATION | |||
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Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 (Amendment No. ) | |||
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Filed by the Registrant x | |||
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Filed by a Party other than the Registrant o | |||
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Check the appropriate box: | |||
o | Preliminary Proxy Statement | ||
o | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | ||
x | Definitive Proxy Statement | ||
o | Definitive Additional Materials | ||
o | Soliciting Material Pursuant to §240.14a-12 | ||
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CLEAN DIESEL TECHNOLOGIES, INC. | |||
(Name of Registrant as Specified In Its Charter) | |||
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant) | |||
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Payment of Filing Fee (Check the appropriate box): | |||
x | No fee required. | ||
o | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. | ||
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o | Fee paid previously with preliminary materials. | ||
o | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. | ||
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CLEAN DIESEL TECHNOLOGIES, INC.
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Proxy Statement
for the 2013 Annual Meeting of Stockholders
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QUESTIONS AND ANSWERS ABOUT THIS PROXY STATEMENT AND VOTING
Why did I receive these proxy materials?
We are providing these proxy materials in connection with the solicitation by the Board of Directors of Clean Diesel Technologies, Inc., a Delaware corporation (sometimes referred to as we, our, us, the Company, the Corporation or CDTi), of proxies to be voted at our 2013 Annual Meeting of Stockholders (the Annual Meeting) and at any adjournment or postponement thereof.
You are invited to attend the Annual Meeting, which will take place on May 22, 2013, beginning at 10:00 a.m., Pacific Time, at CDTis Oxnard facility located at 1621 Fiske Place, Oxnard, California 93033, U.S.A. Directions to the Annual Meeting may be found at http://www.cdti.com/proxy. Stockholders will be admitted to the Annual Meeting beginning at 9:30 a.m., Pacific Time. Seating will be limited.
We first mailed this Proxy Statement and accompanying proxy card on April 5, 2013 to stockholders of record entitled to vote at the Annual Meeting.
Who is entitled to attend the Annual Meeting?
Stockholders of record and beneficial owners as of March 25, 2013 are invited to attend the Annual Meeting. If your shares are held in the name of a broker, bank or other holder of record and you plan to attend the Annual Meeting, you must present proof of your ownership of CDTi stock, such as a bank or brokerage account statement, to be admitted to the Annual Meeting.
Who is entitled to vote at the Annual Meeting?
Only stockholders of record at the close of business on March 25, 2013 (the Record Date), are entitled to vote at the Annual Meeting. On the Record Date, there were 7,303,069 shares of CDTis common stock outstanding and entitled to vote. Each share of common stock is entitled to one vote on each matter properly brought before the Annual Meeting.
What is the difference between holding shares as a stockholder of record and as a beneficial owner?
If on March 25, 2013 your shares were registered directly in your name with CDTIs transfer agent, American Stock Transfer & Trust Company, LLC, then you are the stockholder of record. Whether or not you plan to attend the Annual Meeting, we urge you to fill out and return the enclosed proxy card or vote via the Internet or by telephone to ensure your vote is counted.
If on March 25, 2013 your shares were held in a stock brokerage account or by a bank or other similar organization, then you are considered the beneficial owner of those shares. These proxy materials have been forwarded to you by that organization. The organization holding your account is considered the stockholder of record for purposes of voting at the Annual Meeting. As the beneficial owner, you have the right to direct your broker, bank or other agent how to vote the shares in your account. You are also invited to attend the Annual Meeting. However, because you are not the stockholder of record, you may not vote your shares in person at the Annual Meeting unless you request and obtain a valid proxy from your broker, bank or other agent.
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Bernard H. Bud Cherry, Director. Mr. Cherry joined the CDTi Board of Directors in October 2010, immediately following the business combination of CDTi and Catalytic Solutions, Inc. Mr. Cherry served as a Director of Catalytic Solutions, Inc. from January 2008 to October 2010. Mr. Cherry has served as Chief Executive Officer and Director of Eagle Creek Renewable Energy, LLC, a privately owned developer and operator of hydroelectric generating facilities, since June 2011. Mr. Cherry is also the Principal Founder and Chief Executive Officer of Energy 5.0 LLC, a privately held energy solutions company established in November 2006, that develops, finances, constructs and operates complex renewable energy production facilities. Mr. Cherry has over 40 years' experience in the energy sector. He served as Executive Vice Chairman of the Board of Northern Power Systems, Inc., a wind energy company from August 2008 to July 2009 and Chief Executive Officer from August to December 2008. In February 2007, Mr. Cherry joined the Board of Directors of Distributed Energy Systems Corporation (NASDAQ:DESC), a renewable energy generation and technology equipment manufacturer, and became Chairman of the Board in August 2007. In October 2007, Mr. Cherry was named Chief Executive Officer and served until August 2008, at which time he also left the Board. Distributed Energy Systems Corporation filed for Chapter 11 bankruptcy protection in June 2008. Prior to that, Mr. Cherry was Chief Executive Officer of the Foster Wheeler Global Power Group, one of the two major business groups of Foster Wheeler Limited (NASDAQ:FWLT), a provider of construction and engineering services, from November 2002 until June 2006. Prior to his tenure at Foster Wheeler, Mr. Cherry was a member of the senior management team of the Oxbow Group for 17 years. Mr. Cherry was the President and Chief Operating Officer of the Oxbow Energy and Minerals Group and played a key leadership role in the creation and growth of Oxbow's global energy activities. In addition to CDTi, Mr. Cherry serves on the board of Fabrico, Inc. Mr. Cherry began his career as a Nuclear Engineer at United Nuclear Corporation and holds a BS degree in Chemistry and MS degree in Nuclear Engineering, both earned at the University of Illinois.
Mr. Cherrys experience as a director of public companies, his over 40 years of experience in the energy sector and his performance as a member of our Board led the Board to conclude that he should be nominated to continue to serve as a Director of CDTi.
Alexander Hap Ellis III, Chairman. Mr. Ellis joined the CDTi Board of Directors as Chairman in October 2010, immediately following the business combination of CDTi and Catalytic Solutions, Inc. Mr. Ellis served as a Director of Catalytic Solutions, Inc. from June 2003 to October 2010, and was elected as Chairman of Catalytic Solutions, Inc.s Board in December 2004. Mr. Ellis has extensive operating experience in electric power and renewable energy. He is a General Partner of RockPort Capital Partners, a leading multi-stage venture capital firm that invests in the areas of alternative and traditional energy, mobility and sustainability. He has been a general partner in RockPort Capital Partners since its inception in 2000 and has primarily focused on renewables, electric grid technologies, advanced materials and transportation and emission control technologies. Prior to the formation of RockPort's first fund, he joined RockPort Partners, a merchant bank specializing in energy and environmental projects in 1998. In addition to CDTi, Mr. Ellis serves on the boards of Northern Power Systems, Powerspan Corp., Gazelle, Inc., Southwest Windpower, William Gallagher Associates, George H.W. Bush Foundation and Cornell Laboratory of Ornithology. In addition, he represented RockPort on the board of Comverge, Inc. (NASDAQ:COMV) from October 2004 to August 2007 and Eka Systems, now a part of Eaton Corporation (NYSE:ETN), from May 2007 to April 2010. Mr. Ellis received a BA degree from Colorado College and an MBA from the Yale School of Management.
Mr. Elliss experience as a director of public companies, combined with his broad experience as a general partner of RockPort Capital Partners in investing in clean tech companies, as well as his ability to assist us with fundraising and other strategic initiatives, and his performance as a member of our Board led the Board to conclude that he should be nominated to continue to serve as a Director of CDTi.
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Outstanding Equity Awards at Fiscal Year-End
The following table sets out information as to the Named Executive Officers concerning their unexercised option awards, by award outstanding at December 31, 2012.
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| Option Awards |
| Stock Awards | ||||||||
Name |
| Number of Securities Underlying Unexercised Options # Exercisable |
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Number of Securities Underlying Unexercised Options # Unexercisable |
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Option Exercise Price ($) |
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Option Expiration Date 1 |
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Number of Shares or Units of Stock That Have Not Vested (#) 2 |
| Market Value of Shares or Units of Stock That Have Not Vested ($) |
R. Craig Breese 3 03/08/2012 |
| - |
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176,676 |
| $2.83 |
| 03/08/2022 |
| 58,892 |
| $ 127,796 |
Charles F. Call 03/17/2011 |
| 124,959 |
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- |
| $5.68 |
| 03/17/2021 |
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- |
| - |
11/12/2012 |
| 833 |
| 4,167 |
| $2.66 |
| 11/12/2022 |
| - |
| - |
Total |
| 125,792 |
| 4,167 |
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| - |
| - |
Nikhil A. Mehta 4 |
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03/17/2011 | 19,000 | - | $5.68 | 03/17/2021 | - | - | ||||||
06/08/2011 |
| - |
| - |
| - |
| - |
| 2,114 |
| $ 4,587 |
02/22/2012 |
| - |
| 81,699 |
| $3.06 |
| 02/22/2022 |
| 27,233 |
| $ 59,096 |
Total |
| 19,000 |
| 81,699 |
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| 29,347 |
| $ 63,683 |
Stephen J. Golden, Ph.D. 5 03/17/2011 |
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16,000 |
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- |
| $5.68 |
| 03/17/2021 |
| - |
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06/08/2011 |
| - |
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| - |
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| 1,780 |
| $ 3,863 |
02/22/2012 |
| - |
| 58,821 |
| $3.06 |
| 02/22/2022 |
| 19,607 |
| $ 42,547 |
Total |
| 16,000 |
| 58,821 |
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| 21,387 |
| $ 46,410 |
1 The option expiration date indicated is the tenth anniversary of the date of grant. Each of the foregoing options is for a ten-year term. Option granted on March 8, 2012 vested 28% on March 8, 2013 and will vest 9% per quarter thereafter. Upon resignation, vested option continues to be exercisable for 90 days but unvested option terminates. In the case of death or total disability, vested option continues in force and is exercisable until the expiration of the original term but unvested option terminates. In the case of cause, option granted shall terminate and be immediately nonexercisable. Upon termination without cause or resignation for good reason concurrent with or after a Change in Control, as currently defined in the inducement award, option will vest immediately. In the instance of termination of service without cause, option may be exercised at any time prior to the expiration of 90 days after the date on which service is terminated, but in any event no later than the option expiration date. In the instance of termination of service for good reason concurrent with or subsequent to a Change in Control, option may be exercised at any time prior to the expiration of 180 days after the date on which service is terminated, but in any event no later than the option expiration date. Options granted on March 17, 2011 vested 50% on grant date and 50% on March 17, 2012 and those granted on February 22, 2012 vested 33.3% on February 22, 2013 and will vest 33.3% on each of February 22, 2014 and 2015. For the March 17, 2011 and February 22, 2012 grants, upon resignation, vested options continue to be exercisable for 90 days but unvested options terminate. In the case of death, total disability or retirement, vested options continue in force and are exercisable until the expiration of the original term but unvested options terminate. In the case of cause, all options granted shall terminate and be immediately nonexercisable. Notwithstanding the foregoing, however, if there shall be a Change in Control, as defined in the participants award agreement, in which seventy five percent (75%) or more of the stock or assets of the Company shall have been acquired by a single person or a control group, then the time within which to exercise this option shall be limited to one hundred eighty (180) days following the Plan participants change in status. Option granted on November 12, 2012 vests monthly over one year beginning on the grant date. Upon resignation for any reason other than cause, vested option continues in force and is exercisable until the expiration of the original term but unvested option terminates. In the case of cause, option granted shall terminate and be immediately nonexercisable. In the event of a Change in Control, the Board may, in its discretion, take actions as it deems appropriate to provide for the acceleration, assumption, continuation, substitution or cash-out of option award.
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3 Subsequent to December 31, 2012, Mr. Breese was granted a stock award of 106,241 shares.
4 Subsequent to December 31, 2012, Mr. Mehta was granted a stock award of 23,712 shares.
5 Subsequent to December 31, 2012, Dr. Golden was granted a stock award of 25,498 shares.
Equity Compensation Plan Information
The following table sets forth information as of December 31, 2012 regarding the Companys equity compensation plans.
Plan Category |
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Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights 1 |
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Weighted Average Exercise Price of Outstanding Options, Warrants and Rights 2 |
| Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (excluding securities reflected in the first column) 3 |
Equity compensation plans approved by security holders: |
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Stock Incentive Plan |
| 746,773 |
| $ 9.25 |
| 524,896 |
Equity compensation plans not approved by security holders: |
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New Employee Inducement Awards |
| 235,568 |
| $ 2.83 |
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1 Includes outstanding restricted share units of 137,463 for the Stock Incentive Plan and 58,892 for the New Employee Inducement Awards, respectively.
2 Excludes the restricted share units described in footnote 1 above because they do not have an exercise price.
3 1,400,000 shares are reserved for issuance under the Stock Incentive Plan.
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PROPOSAL No. 3
NON-BINDING ADVISORY VOTE TO APPROVE THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS
As required by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the Dodd-Frank Act), a "say on pay" advisory vote is being required this year for U.S. public smaller reporting companies under Section 14A of the Securities Exchange Act of 1934, as amended. We are providing our stockholders with the opportunity to cast a non-binding advisory vote to approve the compensation of our named executive officers as disclosed in the Executive Compensation section of this Proxy Statement in accordance with Securities and Exchange Commission rules.
As described more fully in this Proxy Statement, our executive compensation program is designed to attract, motivate and retain our named executive officers with the skills required to formulate and drive CDTis strategic direction and achieve annual and long-term performance goals necessary to create stockholder value. The program seeks to align executive compensation with stockholder value on an annual and long-term basis through a combination of base pay, annual incentives and long-term incentives. Under these programs, our named executive officers are rewarded for the achievement of specific annual, long-term and strategic goals, corporate goals and the realization of increased stockholder value. Our Compensation and Nominating Committee continually reviews the compensation programs for our named executive officers to ensure they achieve the desired goals of aligning our executive compensation structure with our stockholders interests and current market practices.
We are asking our stockholders to indicate their support of our executive compensation as described in this Proxy Statement. This say on pay proposal gives our stockholders the opportunity to express their views on our executive compensation. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the philosophy, policies and procedures described in this Proxy Statement. The vote is advisory, and therefore is not binding on the Company, our Board or our Compensation and Nominating Committee in any way.
Furthermore, because this non-binding, advisory resolution primarily relates to the compensation of our named executive officers that has already been paid or contractually committed, there is generally no opportunity for us to revisit these decisions. However, our Board and our Compensation and Nominating Committee value the opinions of our stockholders and will take into account the outcome of the vote when considering future executive compensation policies and decisions.
Stockholders will be asked at the Annual Meeting to approve the following resolution pursuant to this Proposal No. 3:
RESOLVED, that the stockholders approve, on an advisory basis, the compensation of the Companys named executive officers, as disclosed in the Companys definitive Proxy Statement for the 2013 Annual Meeting of Stockholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the compensation tables and related narrative discussion.
YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE IN FAVOR OF THE FOREGOING RESOLUTION BY VOTING FOR THIS PROPOSAL.
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HOUSEHOLDING OF PROXY MATERIALS
The SEC has adopted rules that permit companies and intermediaries (e.g., brokers) to satisfy the delivery requirements for proxy statements and annual reports with respect to two or more stockholders sharing the same address by delivering a single proxy statement and annual report addressed to those stockholders. This process, which is commonly referred to as householding, potentially means extra convenience for stockholders and cost savings for companies.
This year, a number of brokers with account holders who are CDTi stockholders will be householding our proxy materials. A single annual report and proxy statement will be delivered to multiple stockholders sharing an address unless contrary instructions have been received from the affected stockholders. Once you have received notice from your broker that they will be householding communications to your address, householding will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in householding and would prefer to receive a separate proxy statement and annual report, you may:
· if you are a stockholder of record, direct your written request to our transfer agent, American Stock Transfer and Trust Company, LLC (in writing: Attn: Proxy Dept., 6201 15th Avenue, Third Floor, Brooklyn, NY 11219, U.S.A.; or by telephone: in the United States, 1-800-PROXIES (1-800-776-9437) and outside the United States, 1-718-921-8500); or
· if you are not a stockholder of record, notify your broker.
CDTi will promptly deliver, upon request, a separate copy of the annual report and proxy statement to a stockholder at a shared address to which a single copy of the documents was delivered. If you currently receive multiple copies of the proxy statement at your address and would like to request householding of these communications, please contact your broker if you are not a stockholder of record; or contact our transfer agent if you are a stockholder of record, using the contact information provided above.
OTHER MATTERS
The Board of Directors knows of no other matters that will be presented for consideration at the Annual Meeting. If any other matters are properly brought before the Annual Meeting, it is the intention of the persons named in the accompanying proxy to vote on such matters in accordance with their best judgment.
By Order of the Board of Directors,
Rori M. Ridley
General Counsel and Corporate Secretary
Ventura, California
April 5, 2013
A copy of the Companys Annual Report on Form 10-K for the year ended December 31, 2012 is available without charge upon written request to: Investor Relations, Clean Diesel Technologies, Inc., 4567 Telephone Road, Suite 100, Ventura, California 93003, U.S.A.
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