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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
SCHEDULE 14A
(Rule 14a-101)
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act Of 1934
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Preliminary Proxy Statement |
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Confidential, For Use Of The Commission Only (as Permitted By Rule 14a-6(e)(2)) |
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Definitive Proxy Statement |
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Soliciting Material Pursuant to §240.14a-12 |
CLEAN DIESEL TECHNOLOGIES, INC.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
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4567 Telephone Road, Suite 206
Ventura, CA 93003
(805) 639-9458
Notice of Annual Meeting of Shareholders
to be Held June 9, 2011
Important Notice regarding the Availability of Proxy Materials for the
Shareholder Meeting to be Held on June 9, 2011:
The Proxy Statement and Annual Report to Shareholders
are available at: http://investor.cdti.com
Dear Shareholder of Clean Diesel Technologies, Inc.:
You are invited to attend the 2011 Annual Meeting (the Annual Meeting) of shareholders of
Clean Diesel Technologies, Inc., a Delaware corporation (Clean Diesel). The Annual Meeting will
be held at 10:00 a.m. Pacific Time, Thursday, June 9, 2011, at Clean Diesels Oxnard facility
located at 1621 Fiske Place, Oxnard, California 93033, U.S.A. to consider and vote upon the
following items:
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To elect six (6) Directors; |
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To ratify the appointment of KPMG LLP as Clean Diesels independent
registered accounting firm for 2011; and |
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To transact any other business that may properly come before the
Annual Meeting or any adjournments or postponements of the Annual
Meeting. |
These items of business are more fully described in the Proxy Statement accompanying this
Notice.
YOUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE NOMINEES AND IN FAVOR OF THE OTHER
PROPOSAL OUTLINED IN THE ACCOMPANYING PROXY STATEMENT.
It is important that your shares be represented and voted at the Annual Meeting. Whether or
not you attend the Annual Meeting, please vote your shares promptly to ensure your representation
at the Annual Meeting by completing and returning your proxy card (or by voting on the Internet or
by telephone). If you have any questions about how to vote your shares, please see the section
How do I vote? under Questions and Answers about this Proxy Statement and Voting in the
accompanying Proxy Statement.
The record date for the Annual Meeting is April 15, 2011. Only shareholders of record at the
close of business on that date may vote at the Annual Meeting or any adjournment or postponement
thereof.
By Order of the Board of Directors,
Charles F. Call
Director and Chief Executive Officer
Ventura, California
April 25, 2011
CLEAN DIESEL TECHNOLOGIES, INC.
Proxy Statement
For the 2011 Annual Meeting of Shareholders
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 or Clean Diesel), of proxies to be voted at our 2011 Annual
Meeting of Shareholders (the Annual Meeting) and at any adjournment or postponement thereof.
You are invited to attend the Annual Meeting, which will take place on June 9, 2011, beginning at
10:00 a.m., Pacific Time, at Clean Diesels Oxnard facility located at 1621 Fiske Place, Oxnard,
California 93033, U.S.A. Shareholders will be admitted to the Annual Meeting beginning at 9:30
a.m., Pacific Time. Seating will be limited.
We intend to mail this Proxy Statement and accompanying proxy card on or about April 26, 2011 to
all shareholders of record entitled to vote at the Annual Meeting.
Who is entitled to attend the Annual Meeting?
Shareholders of record and beneficial owners as of April 15, 2011 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 Clean Diesel 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 shareholders of record at the close of business on April 15, 2011 (the record date), are
entitled to vote at the Annual Meeting. On the record date, there were 3,987,812 shares of Clean
Diesels 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 shareholder of record and as a beneficial owner?
If on April 15, 2011 your shares were registered directly in your name with Clean Diesels transfer
agent, American Stock Transfer & Trust Company, LLC, then you are the shareholder 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 April 15, 2011 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 shareholder 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 shareholder 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. Plus, as noted above,
you must present proof of your ownership of Clean Diesel stock, such as a bank or brokerage account
statement, to be admitted to the Annual Meeting.
What am I voting on?
There are two matters scheduled for a vote:
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Election of Charles F. Call, Bernard H. Bud Cherry, Alexander Hap Ellis III, Charles
R. Engles, Ph.D., Derek R. Gray, and Mungo Park as Directors to hold office for one-year
terms; and
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Ratification of the appointment of KPMG LLP as Clean Diesels independent registered
accounting firm for 2011. |
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How do I vote?
Shareholders of record; Shares registered directly in your name
If you are a shareholder of record, you may vote in person at the Annual Meeting or vote by proxy
using the enclosed proxy card, the Internet or telephone. Whether or not you plan to attend the
Annual Meeting, we urge you to vote by proxy to ensure your vote is counted. You may still attend
the Annual Meeting and vote in person if you have already voted by proxy.
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To vote in person, attend the Annual Meeting and we will give you a ballot during the
Annual Meeting. |
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To vote using the proxy card, please complete, sign and date the proxy card and return
it in the prepaid envelope. If you return your signed proxy card to us before the Annual
Meeting, we will vote your shares as you direct. If you do not have the prepaid envelope,
please mail your completed proxy card to American Stock Transfer & Trust Company, LLC,
Attn: Proxy Dept., 6201 15th Avenue, Brooklyn, NY 11219, U.S.A. |
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To vote via the telephone, you can vote by calling the toll-free telephone number on
your proxy card. Please have your proxy card handy when you call. Easy-to-follow voice
prompts will allow you to vote your shares and confirm that your instructions have been
properly recorded. If you are located outside the United States, see your proxy card for
additional instructions. If you vote via the telephone before the Annual Meeting, we will
vote your shares as you direct. |
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To vote via the Internet, please go to www.voteproxy.com and follow the instructions.
Please have your proxy card handy when you go to the website. As with telephone voting, you
can confirm that your instructions have been properly recorded. If you vote via the
Internet before the Annual Meeting, we will vote your shares as you direct. |
Telephone and Internet voting facilities for shareholders of record will be available 24 hours a
day until 11:59 p.m. Eastern Time on
June 8, 2011.
Beneficial owner; Shares held in account at brokerage, bank or other organization
If you are a beneficial owner of shares registered in the name of your broker, bank, or other
agent, you should have received a proxy card and voting instructions with these proxy materials
from that organization rather than from Clean Diesel. Simply complete and mail the proxy card as
directed in those voting instructions to ensure that your vote is counted. Alternatively, you may
vote by telephone or over the Internet as instructed by your broker or bank or other agent. To vote
in person at the Annual Meeting, you must obtain a valid proxy from your broker, bank, or other
agent. Follow the instructions from your broker, bank or other agent included by it with these
proxy materials, or contact your broker, bank or other agent to request a proxy form.
What if I return a proxy card but do not make specific choices?
If your card does not indicate your voting preferences, the persons named in the proxy card will
vote the shares represented by your proxy card as recommended by the Board of Directors. Clean
Diesel does not expect that any matters other than the election of Directors and the other proposal
described herein will be brought before the Annual Meeting. If any other matter is properly
presented at the Annual Meeting, your proxy (one of the individuals named on your proxy card) will
vote your shares using his best judgment.
What can I do if I change my mind after I vote?
If you are a shareholder of record, you can revoke your proxy at any time before the final vote at
the Annual Meeting by:
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giving written notice that you are revoking your proxy to the Secretary, Clean Diesel
Technologies, Inc., 4567 Telephone Road, Suite 206, Ventura, CA, 93003, U.S.A.; |
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delivering a properly completed proxy card with a later date, or vote by telephone or on
the Internet at a later date (we will vote your shares as directed in the last instructions
properly received from you prior to the Annual Meeting); or
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attending and voting by ballot at the Annual Meeting (note, simply attending the Annual
Meeting will not, by itself, revoke your proxy). |
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If you are a beneficial owner of shares, you may submit new voting instructions by contacting your
broker, bank or other organization that is the holder of record and following its instructions.
Please note that to be effective, your new proxy card, Internet or telephonic voting instructions
or written notice of revocation must be received by the Secretary prior to the Annual Meeting and,
in the case of Internet or telephonic voting instructions, must be received before 11:59 p.m.
Eastern Time on Wednesday, June 8, 2011.
What shares are included on the proxy card?
If you are a shareholder of record, you will receive only one proxy card for all the shares you
hold of record in certificate form and in book-entry form.
If you are a beneficial owner, you will receive voting instructions from your broker, bank or other
organization that is the holder of record.
Is there a list of shareholders entitled to vote at the Annual Meeting?
The names of shareholders of record entitled to vote at the Annual Meeting will be available at the
Annual Meeting and for ten days prior to the Annual Meeting for any purpose relevant to the Annual
Meeting, by contacting the Secretary of Clean Diesel.
How are votes counted?
Votes will be counted by the inspector of election appointed for the Annual Meeting, who will
separately count For, and Against votes, and broker non-votes.
What is a broker non-vote?
If you are a beneficial owner whose shares are held of record by a broker, you must instruct the
broker how to vote your shares. If you do not provide voting instructions, your shares will not be
voted on any proposal on which the broker does not have discretionary authority to vote. This is
called a broker non-vote. In these cases, the broker can register your shares as being present at
the Annual Meeting for purposes of determining the presence of a quorum but will not be able to
vote on those matters for which specific authorization is required.
If you are a beneficial owner whose shares are held of record by a broker, your broker has
discretionary voting authority to vote your shares on Proposal No. 2, the ratification of KPMG LLP,
even if the broker does not receive voting instructions from you. However, your broker does not
have discretionary authority to vote on Proposal No. 1, the election of Directors, without
instructions from you, in which case a broker non-vote will occur and your shares will not be voted
on this matter. Accordingly, it is important that beneficial owners instruct their brokers how they
wish to vote their shares.
What is the quorum requirement for the Annual Meeting?
A quorum of shareholders is necessary to hold a valid Annual Meeting. A quorum will be present if
the holders of at least one-third (1/3) of the outstanding shares are represented by proxy or by
shareholders present and entitled to vote at the Annual Meeting. On the record date, there were
3,987,812 shares outstanding and entitled to vote. Thus, 1,329,271 shares must be represented by
proxy or by shareholders present and entitled to vote at the Annual Meeting. Abstentions and
broker non-votes are counted as present and entitled to vote for purposes of determining a quorum.
If there is no quorum, the chairman of the Annual Meeting or holders of the majority of the votes
present at the Annual Meeting may adjourn the Annual Meeting to another time or date.
How many votes are required to approve each proposal?
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Proposal |
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Vote Required |
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Broker Discretionary Voting Allowed |
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Election of each Director
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Plurality of Votes Cast
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No |
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Ratification of KPMG LLP
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Majority of Votes Cast
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Yes |
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If you abstain from voting or there is a broker non-vote on any matter, your abstention or broker
non-vote will not affect the outcome of such vote, because abstentions and broker non-votes are not
considered to be votes cast under our By-laws or under the laws of Delaware (our state of
incorporation).
Proposal No. 1 Election of Directors; Plurality Vote
Under our By-laws Directors are elected by a plurality of votes cast. This means that Directors who
receive the most For votes are elected. There is no Against option and votes that are
withheld or not cast, including broker non-votes, are not counted as votes For or Against. If
a Director nominee receives a plurality of votes but does not, however, receive a majority of
votes, that fact will be considered by the Compensation and Nominating Committee of the Board in
any future decision on Director nominations.
Proposal No. 2 Ratification of KPMG LLP; Majority Vote
Under our By-laws, the votes cast For must exceed the votes cast Against to approve the
ratification of KPMG LLP as our independent registered public accounting firm. Abstentions will not
be counted as votes cast and accordingly, will not have an effect on this Proposal No. 2.
How will my shares be voted at the Annual Meeting?
At the Meeting, the persons named in the proxy card will vote your shares as you instruct. If you
sign your proxy card and return it without indicating how you would like to vote your shares, your
proxy will be voted as the Board of Directors recommends, which is:
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FOR the election of each of the Director nominees named in this Proxy Statement; and |
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FOR the ratification of the appointment of KPMG LLP as our independent registered public
accounting firm for the 2011 fiscal year. |
Do I have cumulative voting rights?
No, our certificate of incorporation does not provide for cumulative voting.
Am I entitled to dissenter or appraisal rights?
No, our shareholders are not entitled to dissenters rights or appraisal rights under the Delaware
General Corporation Law for the matters being submitted to shareholders at the Annual Meeting.
Could other matters be decided at the Annual Meeting?
At the date of this Proxy Statement, we did not know of any matters to be considered at the Annual
Meeting other than the items described in this Proxy Statement. If any other business is properly
presented at the Annual Meeting, your proxy card grants authority to the proxy holders to vote on
such matters in their discretion.
Can I access the Notice of Annual Meeting and Proxy Statement and the 2010 Annual Report on Form
10-K the Internet?
This Notice of Annual Meeting and Proxy Statement and the 2010 Annual Report are available on our
website at http://investor.cdti.com. Instead of receiving future proxy statements and accompanying
materials by mail, most shareholders can elect to receive an e-mail that will provide electronic
links to them. Opting to receive your proxy materials online will save us the cost of producing
documents and mailing them to your home or business, and will also give you an electronic link to
the proxy voting site.
Shareholders of Record: You may enroll in the electronic proxy delivery service at any time by
accessing your shareholder account at www.amstock.com and following the enrollment instructions.
Beneficial Owners: You also may be able to receive copies of these documents electronically. Please
check the information provided in the proxy materials sent to you by your broker, bank or other
holder of record regarding the availability of this service.
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Who will pay for the cost of this proxy solicitation?
Clean Diesel will pay the cost of soliciting proxies. Proxies may be solicited on our behalf by
Directors, officers or
employees in person or by telephone, electronic transmission and facsimile transmission or by other
means of communication. Directors, officers or employees will not be paid any additional
compensation for soliciting proxies. We may also reimburse brokerage firms, banks and other agents
for the cost of forwarding proxy materials to the beneficial owners.
When are shareholder proposals or nominations due for next years annual meeting?
In accordance with Clean Diesels By-laws, if you wish to submit a proposal for consideration at
next years annual meeting but are not requesting that such proposal be included in next years
proxy materials, or if you wish to nominate a person for election to the Board of Directors at next
years annual meeting, your notice of such a proposal or nomination must be submitted in writing
and delivered to, or mailed and received at, the principal executive offices of the Company not
later than 90 days nor earlier than 150 days before the one year anniversary of the 2011 Annual
Meeting of Shareholders. Accordingly, any such proposal or nomination must be received by the
Secretary no later than March 11, 2012 (but no earlier than January 11, 2012), and should be
delivered or mailed to the following address: Secretary, Clean Diesel Technologies, Inc., 4567
Telephone Rd, Suite 206, Ventura, CA 93003, U.S.A.
In order to be properly submitted to the Secretary of the Company, a proposal or nomination by a
Clean Diesel shareholder must contain specific information as required under Clean Diesels
By-laws, including without limitation (i) the name and address of the shareholder making the
proposal, (ii) the class and number of shares that are owned of record or beneficially owned by
such shareholder, and (iii) any material interest of such shareholder in the proposal. If you would
like a copy of Clean Diesels current By-laws, please write to the Secretary, Clean Diesel
Technologies, Inc., 4567 Telephone Rd, Suite 206, Ventura, CA 93003, U.S.A. Clean Diesels current
By-laws may also be found on the Companys website at www.cdti.com.
To be considered for inclusion in Clean Diesels proxy statement and form of proxy for the 2012
Annual Meeting of Shareholders, your shareholder proposal must be submitted in writing by December
28, 2011 to the Secretary, Clean Diesel Technologies, Inc., 4567 Telephone Rd, Suite 206, Ventura,
CA 93003, U.S.A.
Without limiting the advance notice provisions in the Companys By-laws, which contain procedures
that must be followed for a matter to be properly presented at an annual meeting, Clean Diesel
management who are proxy holders will have discretionary authority to vote all shares for which
they hold proxies with respect to any shareholder proposal or nomination received after the
deadline for such proposals or nominations set forth in our By-laws. Such discretionary authority
may be exercised to oppose a proposal or nomination made by a shareholder.
How can I find out the results of the voting at the Annual Meeting?
Preliminary voting results will be announced at the Annual Meeting and, if final voting results are
not known, will be provided in a Current Report on Form 8-K within four business days after the end
of the Annual Meeting. Final voting results will be published in a Current Report on Form 8-K
within four business days after the final voting results are known.
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DIRECTORS AND EXECUTIVE OFFICERS OF CLEAN DIESEL TECHNOLOGIES
The following table sets forth the name, age and positions, as of April 25, 2011 (the date of
this Proxy Statement), of individuals who are currently Directors and executive officers of Clean
Diesel Technologies, Inc. Following the table is a brief biography of each nominee for Director
and of each current executive officer of Clean Diesel. To Clean Diesels knowledge, there are no
family relationships between any Director or executive officer and any other Director or executive
officer of Clean Diesel. Executive officers serve at the discretion of the Board of Directors.
Additionally, executive officers may be elected to the Board of Directors. Mr. Call and Mr. Rogers
currently serve as Directors.
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Charles F. Call
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63 |
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Director, Chief Executive Officer, President |
Bernard H. Bud Cherry
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71 |
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Director |
Alexander Hap Ellis III
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61 |
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Chairman of the Board of Directors |
Charles R. Engles, Ph.D.
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63 |
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Director |
Derek R. Gray
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77 |
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Director |
Mungo Park
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55 |
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Director |
Timothy Rogers 1
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49 |
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Director, Senior Corporate Vice President,
Product Development |
Nikhil A. Mehta
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54 |
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Chief Financial Officer |
Stephen J. Golden
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Chief Technical Officer |
Christopher J. Harris
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Chief Operations Officer |
Daniel K. Skelton, Ph.D.
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Vice President, Sales and Marketing |
David E. Shea
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Corporate Controller |
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Mr. Rogers resigned as Director and Senior Corporate Vice President,
Product Development effective April 30, 2011. |
Continuing Directors
Charles F. Call, Chief Executive Officer and Director (Age 63). Mr. Call joined Clean Diesel
as Chief Executive Officer and Director in October 2010, immediately following the business
combination of Clean Diesel and Catalytic Solutions, Inc. Mr. Call has served as Chief Executive
Officer and Director of Catalytic Solutions, Inc. since November 2004. Mr. Call has over 30 years
of broad management experience encompassing sales, marketing, plant management, general management
and executive management roles in the automotive and electronics industries. His prior experience
includes seven years (from 1997 to 2004) at Imperial Chemical Industries as General Manager of the
electronic materials group and later Senior Corporate Vice President and General Manager of the
specialty polymers and adhesives group. Mr. Call also served as President of JPE Trim from 1996 to
1997, a manufacturer of automotive exterior trim products supplying the major automotive companies.
Before JPE, he served as President of Dexter Automotive Materials, a supplier of coatings,
adhesives and acoustical materials to the major automotive companies. Mr. Call received a BS degree
from Rochester Institute of Technology, New York.
Mr. Calls experience as our Chief Executive Officer, along with his knowledge of the
business, management, his skills, 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 Clean Diesel.
Bernard H. Bud Cherry, Director (Age 71). Mr. Cherry joined the Clean Diesel Board of
Directors in October 2010, immediately following the business combination of Clean Diesel and
Catalytic Solutions, Inc. Mr. Cherry served as a Director of Catalytic Solutions, Inc. from January
2008 to October 2010. Mr. Cherry is 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. He has over 40
years experience in the energy sector. Mr. Cherry 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 2008 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.
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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 Oxbows global energy activities. In addition to
Clean Diesel, 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, combined with his broad experience
with companies that provide engineering services as a senior executive, 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 Clean Diesel.
Alexander Hap Ellis III, Chairman (Age 61). Mr. Ellis joined the Clean Diesel Board of
Directors as Chairman in October 2010, immediately following the business combination of Clean
Diesel 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 venture capital firm that partners
with clean tech entrepreneurs around the world. He has been a general partner in RockPort Capital
Partners since its inception. He has primarily focused on renewables, electric grid technologies,
advanced materials and transportation and emission control technologies. Prior to the formation of
RockPorts first fund, he joined RockPort Partners, a merchant bank specializing in energy and
environmental projects in 1998. In addition to Clean Diesel, Mr. Ellis serves on the boards of ISE
Corporation, Northern Power Systems, Powerspan Corp., Second Rotation, Inc., Southwest Windpower
and William Gallagher Associates. In addition, he represented RockPort on the board of Comverge,
Inc. (NASDAQ:COMV) from October 2004 to August 2007. 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, combined with 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 Clean Diesel.
Charles R. Engles, Ph.D., Director (Age 63). Dr. Engles joined the Clean Diesel Board of
Directors in October 2010, immediately following the business combination of Clean Diesel and
Catalytic Solutions, Inc. Dr. Engles served as a Director of Catalytic Solutions, Inc. from January
2000 to October 2010. He has a total of 14 years of experience serving as a board member for U.S.
public companies and has also been a board member of seven private companies. From April to October
2008, Dr. Engles served as Interim Chief Executive Officer of ThermoCeramix, Inc., an advanced
materials company focused on electrical to thermal energy conversion. From September 1997 to March
2008, Dr. Engles served as Chief Executive Officer of Cutanix Corporation, a biopharmaceutical
company focused on dermatological drug discovery that he co-founded. From September 1994 to March
1997, he served as Chairman and Chief Executive Officer of Stillwater Mining Company (NYSE:SWC)
and, under his direction it completed an IPO on NASDAQ in 1994. In 1992, he organized the spin out
from Johns-Manville Corporation (NYSE:BRK.A,BRK.B) and Chevron Corporation (NYSE:CVX) of Stillwater
Mining Company, the only U.S. producer of platinum group metals. From July 1989 until September
1994, Dr. Engles served as Senior Vice President of Johns-Manville Corporation responsible for
corporate development and worldwide mining and minerals operations. Dr. Engles holds a Ph.D. from
Stanford University in operations research and attended Oxford University as a Rhodes Scholar.
Dr. Engles experience as a director and executive officer of public companies, overall
management experience, as well as his technical background 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
Clean Diesel.
Derek R. Gray, Director (Age 77). Mr. Gray has been a Director of Clean Diesel since 1998. Mr.
Gray has been managing director of SG Associates Limited, a United Kingdom fiscal advisory firm,
since 1971 and a director
7
of Velcro Industries N.V., a manufacturing company, since 1974. Mr. Gray has extensive
financial expertise and is a knowledgeable advisor.
Mr. Grays extensive knowledge and experience in international business and tax matters make
him a valued advisor to the Board and led the Board to conclude that he should be nominated to
continue to serve as a Director of Clean Diesel.
Mungo Park, Director (Age 55). Mr. Park has been a Director of Clean Diesel since September
2009 and served as Chairman from September 2009 to October 2010. Mr. Park is the Chairman of
Innovator Capital Limited, a financial services company of London, England. Innovator Capital has
significant experience in advising Greentech companies on financial matters. Mr. Park was elected
to the Clean Diesel Board of Directors and was appointed as Chairman of the Board for the period
noted above at the suggestion of several significant stockholders of Clean Diesel to assist Clean
Diesel in focusing on strategic objectives and creating value for stockholders.
Mr. Parks fundraising experience and significant experience in advising Greentech companies
on financial matters led the Board to conclude that he should be nominated to continue to serve as
a Director of Clean Diesel.
Executive Officers
Biographical information for Mr. Call is included above under Continuing Directors.
Nikhil A. Mehta, Chief Financial Officer (Age 54). Mr. Mehta joined Clean Diesel as Chief
Financial Officer in October 2010, following the business combination of Clean Diesel and Catalytic
Solutions, Inc. Mr. Mehta has served as Chief Financial Officer of Catalytic Solutions, Inc. since
July 2008 and Director since August 2008. Mr. Mehta has more than 25 years of financial management
experience in high technology and medical technology companies. His experience includes significant
operational finance management in manufacturing companies, fund raising, several acquisitions and
experience as Chief Financial Officer for companies listed on NASDAQ as well as AIM in London. From
2005 to 2008, Mr. Mehta served as Chief Financial Officer of Spacelabs Healthcare, Inc., a medical
technology company and wholly owned subsidiary of OSI Systems, Inc. (NASDAQ:OSIS). Mr. Mehta served
as Vice President of Corporate Development for OSI Systems, Inc. from 2002 to 2005, where he
participated in or led several acquisitions and the IPO of Spacelabs on AIM. From 2000 to 2002, Mr.
Mehta was Chief Financial Officer of Advanced Tissue Sciences, Inc., a previously listed NASDAQ
biotechnology company. Advanced Tissue Sciences, Inc. was the subject of a Liquidating Chapter 11
Plan of Reorganization in 2003. Mr. Mehta also spent over 15 years in several financial positions
with Xerox Corporation (NYSE:XRX). Mr. Mehta received an MBA degree from The Wharton School,
University of Pennsylvania and Bachelor of Commerce from Bombay University.
Stephen J. Golden, Ph.D., Chief Technical Officer (Age 49). Dr. Golden joined Clean Diesel as
Chief Technical Officer in October 2010, immediately following the business combination of Clean
Diesel and Catalytic Solutions, Inc. Dr. Golden, one of the founders of Catalytic Solutions, Inc.
and developer of its technology, has served as the Chief Technology Officer and Director of
Catalytic Solutions, Inc. since 1996. From 1994 to late 1995, Dr. Golden was the Research Director
for Dreisbach Electromotive Incorporated, a developer of advanced batteries based in Santa Barbara,
California. Dr. Golden received his doctorate in Material Science at Imperial College of Science
and Technology in London, England. Dr. Golden did extensive post-doctoral work at the University of
California, Santa Barbara, and the University of Queensland, Australia in ceramic oxide and mixed
metal oxide materials.
Christopher J. Harris, Chief Operations Officer (Age 46). Mr. Harris joined Clean Diesel as
Chief Operations Officer in October 2010, following the business combination of Clean Diesel and
Catalytic Solutions, Inc. Additionally in October 2010, Mr. Harris was appointed President of
Engine Control Systems Limited, a Clean Diesel company. Mr. Harris served as President of Catalytic
Solutions, Inc.s Catalyst Business from August 2008 to October 2010. Mr. Harris has over 20 years
of technical, commercial and general management experience in both privately-held and
publicly-traded specialty chemicals and materials companies. From May 2007 to August 2008, Mr.
Harris served as Chief Operating Officer of Aculon, Inc., an early-stage nanotechnology company,
and prior thereto Global Vice President/General Manager of Avery Dennison Corporations (NYSE:AVY)
Performance Polymers business. Earlier in his career, Mr. Harris held various management positions
in North America and Europe during eleven years with Rohm and Haas Company, acquired by The Dow
Chemical Company
8
(NYSE:DOW) in 2009. Mr. Harris earned his Bachelor of Science in Chemical Engineering from
Cornell University and completed graduate business coursework at Temple University.
Timothy Rogers, Senior Corporate Vice President, Product Development and Director (Age 49).
Mr. Rogers joined the Clean Diesel Board of Directors in October 2010 and also became Senior
Corporate Vice President, Product Development in October 2010. Prior to that Mr. Rogers served as
Executive Vice President Operations from 2006; Vice President, International from 2004, and served
as interim Chief Executive Officer from September 14, 2010 to October 15, 2010. Prior to joining
Clean Diesel he was Director of Sales and Marketing of ADAS Consulting, Ltd, a former UK government
agency, focusing on the living and growing environment and providing lead and policy consultancy to
the UK government and industry. From 1993 to 2002, Mr. Rogers served as a Global Business Manager
of The Associated Octel Company Ltd a multinational petrochemical company based in the UK. Mr.
Rogers formed Octels Emission Technology business unit developing new fuel-borne catalysts and
setting up Adastra Ltd, a retrofit emission control company. Mr. Rogers has been in the
petrochemicals business for nearly 25 years. In that time he has worked for The Exxon Corporation
and Ethyl Petroleum where he held roles in R&D, international sales and business management. Mr.
Rogers has a background in agriculture and mechanical/production engineering, studying at the
Brooks University in Oxford.
David E. Shea, Corporate Controller (Age 47). Mr. Shea joined Clean Diesel as Corporate
Controller in October 2010, following the business combination of Clean Diesel and Catalytic
Solutions, Inc. Mr. Shea served as Corporate Controller of Catalytic Solutions, Inc. from 2009 and
as Manager of Financial Planning and Analysis from October 2005 to 2009. Mr. Shea has over 20 years
of financial management experience in a number of different industries. From 2001 to 2005, Mr. Shea
served as Director of Finance for ENCO Utility Services, a privately held utility services
outsourcing provider. From 1998 to 2001, Mr. Shea was the Manager of Business Planning and
Development for Edison Enterprises, an unregulated subsidiary of Edison International (NYSE:EIX).
From 1986 to 1998, Mr. Shea held several of financial positions, the last being Manager of Material
Estimating and Cost Management at Northrop Grumman (NYSE:NOC). Mr. Shea received an MBA Degree from
The University of Southern California Marshall School of Business and a Bachelor of Arts in
Economics/Mathematics from the University of California at Santa Barbara.
Daniel K. Skelton, Ph.D., Vice President, Sales and Marketing (Age 37). Dr. Skelton was
appointed Vice President, Sales and Marketing in October 2010 and served as Vice President, Global
Sales from February 2009. Prior to that, Dr. Skelton served as Vice President, International from
August 2008; Commercial Director, Europe from September 2006; and Business Development Manager,
International from January 2005. From 2000 to 2004 Dr. Skelton served as a Manager at Mitsui & Co.
Ltd., an international diversified company, with responsibilities for developing emission control
technology. Dr. Skelton holds a Ph.D. degree in metallurgy.
9
PROPOSAL No. 1
ELECTION OF DIRECTORS
Clean Diesels Board of Directors presently has seven (7) members. By resolution of the Board,
in light of Mr. Rogers resignation as a Director, which is effective April 30, 2011, upon such
resignation the number of Directors will be reduced to six (6) members to eliminate the vacancy
resulting from his resignation. Accordingly, at the time of the Annual Meeting, Clean Diesels
Board of Directors will consist of six (6) members and no vacancies.
The Nominees
We are asking you to vote for the election of six (6) nominees as Directors of Clean Diesel.
Each of the nominees is currently a Director of Clean Diesel and was selected by the Board of
Directors upon the recommendation of the Compensation and Nominating Committee of the Board. The
term of office of each Director is until the 2012 annual meeting or until a successor is duly
elected or, if before then, a Director resigns, retires or is removed by the shareholders.
The following table sets forth certain information with respect to each person nominated and
recommended to be elected as a Director of Clean Diesel.
|
|
|
|
|
|
|
|
|
Name |
|
Age |
|
Director Since |
|
|
|
|
|
|
|
|
|
Charles F. Call |
|
|
63 |
|
|
|
2010 |
|
Bernard H. Bud Cherry |
|
|
71 |
|
|
|
2010 |
|
Alexander Hap Ellis III |
|
|
61 |
|
|
|
2010 |
|
Charles R. Engles, Ph.D. |
|
|
63 |
|
|
|
2010 |
|
Derek R. Gray |
|
|
77 |
|
|
|
1998 |
|
Mungo Park |
|
|
55 |
|
|
|
2009 |
|
Biographical information for each nominee, including the reasons that we believe they should
continue to serve as Directors, is included under Directors and Executive Officers of Clean
DieselContinuing Directors. Details concerning Directors compensation for the year ended
December 31, 2010 are included under Director Compensation.
Availability
The nominees have all consented to stand for election and to serve, if elected. Mr. Ellis has
indicated that he would, if reappointed by the Board as Chairman, accept the position as Chairman.
If one or more of the above nominees becomes unavailable or declines to accept election as a
Director, votes will be cast for a substitute nominee, if any, designated by the Board on
recommendation of the Compensation and Nominating Committee. If no substitute nominee is designated
prior to the election, the individuals named as proxies on the enclosed proxy card will exercise
their judgment in voting the shares that they represent, unless the Board reduces the number of
Directors and eliminates the vacancy.
Plurality Voting
Under Delaware law and Clean Diesels By-Laws, a vote by a plurality of the shares voting is
required for the election of Directors. Under plurality voting, Directors who receive the most
For votes are elected; there is no Against option and votes that are withheld or not cast are
disregarded in the count. If a nominee receives a plurality of votes but does not, however,
receive a majority of votes, that fact will be considered by the Compensation and Nominating
Committee in any future decision on nominations.
YOUR
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE ELECTION
OF
EACH OF THESE NOMINEES AS DIRECTORS.
10
ROLE AND COMPOSITION OF THE BOARD OF DIRECTORS
The Board of Directors, which is elected by the shareholders, is the ultimate decision-making
body of the Company, except with respect to those matters reserved to the shareholders. It selects
the Chief Executive Officer and other members of the senior management team, which is charged with
the conduct of the Companys business. Having selected the senior management team, the Board acts
as an advisor and counselor to senior management and ultimately monitors its performance. The
function of the Board to monitor the performance of senior management is facilitated by the
presence of outside Directors of stature who have substantive knowledge of the Companys business.
Our By-laws state that the number of Directors shall be determined from time to time by the
Board of Directors or by the shareholders. In light of the resignation of Mr. Rogers as Senior
Corporate Vice President, Product Development and Director effective April 30, 2011, Clean Diesels
Board of Directors has fixed the number of Directors at six (6) effective upon such resignation (a
decrease from the current seven (7) Directors).
Each Director shall be elected for a term of one year and until a successor is duly elected or
until the Director shall sooner resign, retire, become deceased or be removed by the shareholders.
Any Director may be removed by the shareholders with or without cause at any time. Any Director may
resign at any time by submitting an electronic transmission or by delivering a written notice of
resignation, signed by such Director to the Chairman, the Chief Executive officer or the Secretary.
Unless otherwise specified therein, such resignation shall take effect upon delivery. Vacancies in
the Board may be filled by a majority of the Directors then in office (although less than a
quorum), by the sole remaining Director, or by the shareholders. Any decrease in the authorized
number of Directors shall not become effective until the expiration of the term of the Directors
then in office unless, at the time of such decrease, there shall be vacancies on the Board that are
being eliminated by the decrease. The Board is currently comprised of a Non-Executive Chairman, two
Executive Directors, and four Non-Executive Directors.
Director Independence
The Board of Directors has affirmatively determined that each of Bernard H. Bud Cherry,
Alexander Hap Ellis III, Charles R. Engles, Ph.D., and Derek R. Gray is independent under the
NASDAQ listing standards. In addition, the Board of Directors has determined that the members of
Clean Diesels Audit Committee, Mr. Gray, Mr. Ellis and Dr. Engles are independent under the
heightened independence standards applicable to Audit Committee members under applicable NASDAQ
listing standards and SEC rules (including that Mr. Ellis falls outside the safe harbor provisions
in Rule 10A-3(e)(1)(ii) given his beneficial ownership in excess of 10%). Mungo Park, Charles F.
Call and Timothy Rogers are not independent.
2010 Meetings and Attendance
During 2010, the Board held 20 meetings. All Directors attended 75% or more of the aggregate
number of meetings of the Board and Board committees on which they served. Clean Diesel does not
have a formal policy relating to Director attendance at annual meetings. Five Directors attended
the 2010 annual meeting of Clean Diesel held on October 12, 2010.
Executive Sessions
The Non- Executive Directors met in executive session of the Board on two occasions; the
members of the Audit Committee met in executive session on three occasions; and the Compensation
and Nominating Committee met once in executive session in 2010. The policy of the Board is to hold
at least two executive sessions of the Board annually and executive sessions of committees when
needed.
Board Leadership Structure
The Clean Diesel Board is led by a Chairman who is a Non-Executive Director selected by the
full Board on nomination of the Compensation and Nominating Committee. The Board believes that the
Chairman is responsible for Board leadership and the Chief Executive Officer is responsible for
leading the management, employees and operations of Clean Diesel and that these are two distinct
and separate responsibilities. The Board believes this leadership structure is efficient and
promotes good corporate governance. However, the Board continues to evaluate its leadership
structure and may change it, if, in the opinion of the Board, a change is required
by the needs of Clean Diesels business and operations.
11
Risk Oversight
The Board of Directors exercises ultimate risk oversight responsibility for Clean Diesel
directly and through its committees. The direct role for the Board is to assist management in
identifying risk, to evaluate managements performance in managing risk, and, when appropriate, to
request information and data to assist in that process. The Board believes that its leadership
structure of a separate Chairman and Chief Executive Officer enhances the Boards assessment of
risk. The Audit Committee assesses financial risk, and reviews and approves all related party
transactions and potential conflicts of interest. The Compensation and Nominating Committee
oversees risks relating to Clean Diesels compensation policies and practices. Each Committee
reports its activities and recommendations to the Board, including assessment of risk, when
appropriate.
COMMITTEES OF THE BOARD
The standing Committees of the Board of Directors are an Audit Committee and a Compensation
and Nominating Committee. Special committees may be formed from time to time as determined by the
Board of Directors. The Charters of the Audit Committee and the Compensation and Nominating
Committees are available on Clean Diesels website at www.cdti.com under Investor Relations.
The following table sets out the current membership of the standing Committees of our Board of
Directors:
|
|
|
|
|
|
|
|
|
Name |
|
Audit |
|
Compensation and Nominating |
Charles F. Call |
|
|
|
|
|
|
|
|
Bernard H. Bud Cherry |
|
|
|
|
|
Chairman |
Alexander Hap Ellis III |
|
|
X |
|
|
|
X |
|
Charles R. Engles, Ph.D. |
|
|
X |
|
|
|
X |
|
Derek R. Gray |
|
Chairman |
|
|
|
|
Mungo Park |
|
|
|
|
|
|
|
|
Timothy Rogers |
|
|
|
|
|
|
|
|
Audit Committee
The Audit Committee is responsible for review of audits, financial reporting and compliance,
and accounting and internal controls policy. For audit services, the Audit Committee is responsible
for the engagement and compensation of independent auditors, oversight of their activities and
evaluation of their independence. The Audit Committee has instituted procedures for receiving
reports of improper record keeping, accounting or disclosure. The Audit Committee is also
responsible for reviewing all transactions with related parties, regardless of the amount of such
transaction. The Board has also constituted the Audit Committee as a Qualified Legal Compliance
Committee in accordance with SEC regulations.
In the opinion of the Board, each of the members of the Audit Committee has both business
experience and an understanding of generally accepted accounting principles and financial
statements enabling them to effectively discharge their responsibilities as members of that
Committee.
The Audit Committee met nine times in 2010.
Audit Committee Financial Expert
The Board has determined that Derek R. Gray is an audit committee financial expert within the
meaning of SEC regulations. In making this determination the Board considered Mr. Grays formal
training, and long experience in accounting and auditing and his former service for many years as
the Chairman of the Audit Committee of another reporting company
under the Securities Exchange
Act.
12
Membership
Currently, the Audit Committee consists of Mr. Gray as Chairman, Alexander Hap Ellis III and
Charles R. Engles, Ph.D. Former Board members John A. de Havilland, Frank J. Gallucci and David
Whitwell also served on the Audit Committee during 2010.
Compensation and Nominating Committee
The Compensation and Nominating Committee is responsible for establishing executive
compensation and administering Clean Diesels 1994 Incentive Compensation Plan and also identifies
Director nominees for election to fill vacancies on Clean Diesels Board.
Nominating Policies
Nominees are approved by the Board on recommendation of the Committee. In evaluating nominees,
the Committee particularly seeks candidates of high ethical character with significant business
experience at the senior management level who have the time and energy to attend to Board
responsibilities. Candidates should also satisfy such other particular requirements that the
Committee may consider important to Clean Diesels business at the time. When a vacancy occurs on
the Board, the Committee will consider nominees from all sources, including stockholders, nominees
recommended by other parties, and candidates known to the Directors or Clean Diesels management.
The Committee may, if appropriate, make use of a search firm and pay a fee for services in
identifying candidates. The best candidate from all evaluated will be recommended to the Board to
consider for nomination.
Shareholders who wish to recommend candidates for consideration as nominees should on or
before January 1 in each year furnish in writing detailed biographical information concerning the
candidate to the Committee addressed to the Secretary of Clean Diesel at 4567 Telephone Rd., Suite
206, Ventura, California, 93003, U.S.A. No material changes have been made to the procedures by
which security holders may recommend nominees to Clean Diesels Board of Directors.
Compensation Policies
Compensation of Clean Diesel executives is approved by the Board of Directors upon the
recommendation of the Compensation and Nominating Committee. The Compensation and Nominating
Committee currently provides a compensation package that includes base salary, bonus, and equity
awards under Clean Diesels 1994 Incentive Plan (the Plan), as well as a 401(k) Plan for
substantially all U.S. employees and equivalent plans for employees
around the world. For
periods prior to the October 15, 2010 business combination with
Catalytic Solutions, Inc. (CSI), which we refer to as the
Merger, Clean
Diesel provided matching if an employee contributed 5% to the 401(k) Plan
(Clean Diesel matched 100% of the employee contribution up to 4% of
the employees salary). Matching
contributions vested immediately. Following the Merger, Clean Diesel discontinued 401(k) Plan
matching. Full-time U.K. employees who have met minimum length-of-service requirements may also
participate in a pension plan. Under the pension plan, Clean Diesel contributes an amount equal to
3% of employees base salary per annum. An employee may make voluntary additional contributions
which Clean Diesel will match up to a further 2%. After five years of service, Clean Diesel will
increase its contribution to an amount equal to 5% of employees base salary.
Clean Diesel provides certain welfare benefit plans to its employees, which include medical
and dental insurance benefits. Clean Diesel may also provide other benefits to executives including
term life insurance and disability insurance. These benefits are not provided to Non-Executive
Directors.
Executive base salaries are approved by the Compensation and Nominating Committee on
recommendation of the Chief Executive Officer, except that the base salary of the Chief Executive
Officer is fixed by the Committee itself. In approving or fixing base salaries, the Committee acts
in its collective business judgment and experience on what it understands to be fair, reasonable
and equitable compensation in view of our requirements for recruiting and retention in a highly
competitive market. The Committee has indicated their intent to retain a compensation consultant to
advise the Committee on current compensation arrangements in place at companies comparable to Clean
Diesel. In its deliberations, the Committee considers:
|
|
|
the executives compensation relative to other officers; |
|
|
|
|
recent and expected performance of the executive; |
13
|
|
|
our recent and expected overall performance; and |
|
|
|
|
our overall budget for base salary increases. |
In 2010 and 2009, no awards were made under Clean Diesels incentive cash bonus program,
called the Management Incentive Program (MIP). The Committee has elected to terminate the MIP and
is currently considering adopting a new incentive plan. In light of exceptional performance with
respect to the Merger and related matters, the Committee awarded special one-time bonuses to be
paid to certain employees.
Clean Diesel has one equity based employee compensation plan, the 1994 Incentive Plan (the
Plan), which was approved by the shareholders in 1994 and in 2002. Under the Plan, awards may be
granted to participants in the form of non-qualified stock options, incentive stock options, stock
appreciation rights, restricted stock, restricted stock units, performance awards, bonuses or other
forms of share-based or non-share-based awards or combinations thereof. Participants in the Plan
may be Clean Diesels Directors, officers, employees, consultants or advisors (except consultants
or advisors in capital-raising transactions) as the Directors determine are key to the success of
our business. The Compensation and Nominating Committee grants stock options and restricted stock
(or restricted stock units) as long-term equity incentive awards. These awards are designed to
focus management on the long-term success of Clean Diesel as evidenced by appreciation of our stock
price over several years, by growth in our earnings per share and other elements, and thereby, to
align the interests of the recipients with the interests of the shareholders. We do not have a
stock ownership policy for executive officers.
Under the Plan, the Board grants stock option awards for a term of not more than ten years.
Stock option awards are made by the full Board on the recommendation of the Compensation and
Nominating Committee. The awards have an exercise price per share equal to fair market value on the
grant date.
Compensation Recovery Policies
Clean Diesel will evaluate in appropriate circumstances whether to seek the reimbursement of
certain compensation awards paid to an executive officer, if such executive engages in misconduct
that caused or partially caused a restatement of Clean Diesels financial results, in accordance
with section 304 of the Sarbanes-Oxley Act of 2002. If circumstances warrant, Clean Diesel will
seek to recover appropriate portions of the executive officers compensation for the relevant
period, as provided by law.
Meetings
The Compensation and Nominating Committee met nine times in 2010.
Membership
Currently, the Compensation and Nominating Committee consists of Bernard H. Bud Cherry as
Chairman, Alexander Hap Ellis III and Charles R. Engles, Ph.D. Former Board members John A. de
Havilland and David F. Merrion also served on the Compensation and Nominating Committee during
2010.
Compensation and Nominating Committee Interlocks and Insider Participation
During 2010, all members of the Compensation and Nominating Committee were independent
Directors, and no member was an employee or former employee of Clean Diesel. During 2010, none of
Clean Diesels executive officers served on the compensation committee (or its equivalent) or board
of Directors of another entity whose executive officer served on the Committee.
Compensation and Nominating Committee Diversity Policy
The Compensation and Nominating Committee does not have a diversity policy. When evaluating
nominees, however, the Committee considers a candidates background, experience, education, skills
and individual qualities that could contribute to heterogeneity and perspective in Board
deliberations.
14
CORPORATE GOVERNANCE
Our Corporate Governance Principles govern the operation of the Board of Directors and its
Committees and guide the Board and our Executives in the execution of their responsibilities. These
Principles are reviewed at least annually and are updated periodically in response to changing
regulatory requirements, evolving practices and otherwise as circumstances warrant.
Code of Business Ethics and Conduct
On the recommendation of the Audit Committee, the Board has adopted a Code of Ethics and
Business Conduct (the Code) that applies to all employees, officers and Directors, including the
Chief Executive Officer and Chief Financial Officer. A copy of the Code is available free of charge
on written or telephone request to Investor Relations, Clean Diesel Technologies, Inc., 4567
Telephone Rd., Suite 206, Ventura, California 93003, U.S.A., or +1-805-639-9458 The Code is also
available on Clean Diesels website at www.cdti.com under Investor Relations. Changes to or
waivers granted under the Code will be posted to on Clean Diesels website and reflected, if
appropriate, in Clean Diesels SEC filings.
Communicating with the Board of Directors
Shareholders and other interested parties may contact any of Clean Diesels Directors,
including the Chairman or the Non-Executive Directors as a group, by writing a letter to the Clean
Diesel Director(s) c/o Secretary, Clean Diesel Technologies, Inc., 4567 Telephone Rd., Suite 206,
Ventura, California 93003, U.S.A. Communications will be forwarded directly to the Chairman, unless
a different Director is specified.
Corporate Governance Materials
Materials relating to corporate governance at Clean Diesel are published on our website at
www.cdti.com under Investor Relations.
|
|
|
Board of DirectorsBackground and Experience |
|
|
|
|
Audit Committee Charter |
|
|
|
|
Compensation and Nominating Committee Charter |
|
|
|
|
Code of Ethics and Business Conduct |
|
|
|
|
By-laws of Clean Diesel Technologies, Inc. |
|
|
|
|
Certificate of Amendment to Restated Certificate of Incorporation of Clean
Diesel Technologies, Inc. |
Certain Relationships and Related Transactions
Mr. Park is the chairman of Innovator Capital Limited, a financial services company of London,
England, which firm has provided services to Clean Diesel. On November 20, 2009, Clean Diesel
entered into an engagement letter with Innovator to provide financing and merger and acquisition
services. The engagement letter had an initial three month term during which Innovator would (i)
act for Clean Diesel in arranging a private placement financing of $3.0 million to $4.0 million
from the sale of the companys common stock and warrants and (ii) assist in merger and acquisition
activities. Effective February 20, 2010 by way of a letter agreement dated April 21, 2010, Clean
Diesel extended the term of the engagement letter to June 30, 2010 and revised the minimum and
maximum range of private placement financing to $1.0 million to $1.5 million.
As provided in the engagement letter, Clean Diesel agreed to pay Innovator (i) a placing
commission of 5% of all monies received by the company and (ii) financing warrants to acquire
shares of common stock equal in value to 15% of the total gross proceeds received by the company in
the financing, such financing warrants to be exercisable at a price equal to a 10% premium to the
price per share of common stock in the financing. Issuance of the financing warrants was contingent
on Clean Diesel stockholders authorizing additional common stock. For its merger and acquisition
services, Clean Diesel agreed to pay Innovator monthly retainer fees of $10,000 and success fees as
a percentage of transaction value of 5% on the first $10.0 million, 4% on the next $3.0 million, 3%
on the next $2.0 million, and 2% on amounts above $15.0 million in connection with possible merger
and acquisition transactions. The success fees would be payable in cash or shares or a combination
of cash or shares as determined by the Board.
15
On May 13, 2010, Clean Diesel entered into a letter agreement with Innovator to clarify fee
arrangements in the context of the companys Regulation S private placement and the Merger. On
August 23, 2010, Clean Diesel entered into an additional letter agreement with Innovator to (i)
extend the term of Innovators engagement until the close of business on September 30, 2010 and
(ii) further clarify fee arrangements with Innovator in the context of the Merger. Pursuant to the
August 23, 2010 letter agreement, Clean Diesel agreed to pay Innovator for services rendered in
connection with the Merger as, if and when completed: (i) $500,000 in cash less monthly retainer
fees paid to Innovator and (ii) 32,414 shares of common stock (on a post-split basis). Accordingly,
in connection with the closing of the Merger, Clean Diesel paid Innovator a fee of approximately
$659,500 comprised of $500,000 in cash (inclusive of monthly retainers) and 32,414 shares of common
stock. In addition, Clean Diesel paid Innovator a fee of $50,000 in cash and 15% of the gross
proceeds of the Regulation S private placement through the issuance of 14,863 warrants to purchase
common stock. These warrants have an exercise price of $10.09 and expire on the earlier of (i)
October 15, 2013 (the third anniversary of the effective time of the Merger) and (ii) the date that
is 30 days after we give notice that the market value of one share of our common stock has exceeded
130% of the exercise price of the warrant for 10 consecutive days.
Related Party Transaction Approval Policy
Clean Diesel has adopted a policy pertaining to the review and approval of transactions with
related persons. Under this policy, the Audit Committee reviews and approves all related party
transactions regardless of the amount.
16
DIRECTOR COMPENSATION
Overview
Clean Diesels Board of Directors experienced a number of changes during the year ended
December 31, 2010, including in connection with the October 15, 2010 completion of the business
combination with Catalytic Solutions, Inc. (CSI), which we refer to as the Merger.
On May 10, 2010, John A. de Havilland, resigned as a member of Clean Diesels Board of
Directors. On August 25, 2010, Clean Diesels Board of Directors increased the number of its
Directors from five to seven and elected Mr. Frank J. Gallucci, 60, and Mr. David W. Whitwell, 44,
as Directors to fill the vacancies. On September 14, 2010, Clean Diesels Board of Directors
determined that Timothy Rogers should be nominated for election as a Director at Clean Diesels
2010 annual meeting rather than renominating Michael Asmussen and accordingly, on October 12, 2010,
Timothy Rogers was elected to Clean Diesels Board of Directors. On October 15, 2010, in connection
with the Merger and as contemplated by the Merger Agreement, at the effective time of the Merger
four members of Clean Diesels Board (Frank Gallucci, Charles W. Grinnell, David F. Merrion, and
David W. Whitwell) resigned from the Board of Directors; and four members of the Board of Directors
of Catalytic Solutions, Inc. (Charles F. Call, Bernard H. Bud Cherry, Alexander Hap Ellis III
and Charles R. Engles, Ph.D.) were appointed to Clean Diesels Board of Directors, with Mr. Ellis
named as Chairman of the Board.
Clean Diesel Summary Director Compensation Table
The following table shows all compensation earned by Clean Diesels Non-Executive Directors in
2010. Directors who are also employees or executive officers of Clean Diesel receive no
compensation for their service as Directors. Accordingly, Charles F. Call, Timothy Rogers and
Charles W. Grinnell are not included in the Director Compensation table below and all compensation
paid to Messrs. Call, Rogers and Grinnell is reported in the Summary Compensation Table included
under Executive Compensation.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fees Earned or Paid |
|
|
|
|
Name |
|
in Cash |
|
Option Awards1, 2 |
|
Total |
Alexander Hap Ellis, III 3 |
|
$ |
7,292 |
|
|
$ |
30,650 |
|
|
$ |
37,942 |
|
Bernard H. Bud Cherry 4 |
|
$ |
6,771 |
|
|
$ |
30,650 |
|
|
$ |
37,421 |
|
Charles R. Engles, Ph.D. 5 |
|
$ |
7,292 |
|
|
$ |
30,650 |
|
|
$ |
37,942 |
|
Derek R. Gray 6 |
|
$ |
44,792 |
|
|
$ |
30,650 |
|
|
$ |
75,442 |
|
Mungo Park 7 |
|
$ |
52,708 |
|
|
$ |
30,650 |
|
|
$ |
83,358 |
|
John A. de Havilland 8 |
|
$ |
10,806 |
|
|
|
|
|
|
$ |
10,806 |
|
Frank Gallucci 9 |
|
$ |
25,000 |
|
|
|
|
|
|
$ |
25,000 |
|
David F. Merrion 10 |
|
$ |
40,000 |
|
|
|
|
|
|
$ |
40,000 |
|
David Whitwell 11 |
|
$ |
25,000 |
|
|
|
|
|
|
$ |
25,000 |
|
|
|
|
1 |
|
As of December 31, 2010, the following outstanding option awards were held by
members of the Board of Directors: Mr. Ellis, 5,000 shares; Mr. Cherry, 5,000 shares; Dr. Engles,
5,000 shares; Mr. Gray, 15,163 shares; Mr. Park, 5,000 shares; Mr. de Havilland, 6,330 shares; Mr.
Merrion, 4,998 shares; and Mr. Whitwell, 5,184 shares. Mr. Gallucci held no shares. |
|
2 |
|
Amount represents the aggregate grant date fair value computed in accordance with FASB
ASC Topic 718, see Note 13 to the Companys consolidated financial statements included in the
Annual Report on Form 10-K for the year ended December 31, 2010. |
|
3 |
|
Mr. Ellis joined the Board as Chairman effective October 15, 2010 and is a member of
the Audit Committee and Compensation and Nominating Committee. |
|
4 |
|
Mr. Cherry joined the Board October 15, 2010 and was appointed Chairman of the
Compensation and Nominating Committee. |
17
|
|
|
5 |
|
Dr. Engles joined the Board October 15, 2010 and was appointed a member of the Audit
Committee and Compensation and Nominating Committee. |
|
6 |
|
Mr. Gray is Chairman of the Audit Committee and a former member of the Special
Committee of Independent Directors that was formed in connection with the Merger. |
|
7 |
|
Mr. Park served as Chairman from August 28, 2009 until October 15, 2010. |
|
8 |
|
Mr. de Havilland resigned from the Board on May 10, 2010 and had been a member of the
Audit Committee and Compensation and Nominating Committee. |
|
9 |
|
Mr. Gallucci joined the Board on August 25, 2010 and resigned on October 15, 2010
effective upon the completion of the Merger. He had been a member of the Audit Committee and
Special Committee of Independent Directors. |
|
10 |
|
Mr. Merrion resigned from the Board on October 15, 2010 effective upon the
completion of the Merge and had been a member of the Compensation and Nominating Committee and
Special Committee of Independent Directors. |
|
11 |
|
Mr. Whitwell joined the Board on August 25, 2010 and resigned on October 15, 2010
effective upon the completion of the Merge. He had been a member of the Audit Committee and
Special Committee of Independent Directors. |
Narrative to Director Compensation Table
From January 1, 2010 through October 19, 2010, Clean Diesels Directors were compensated based
on the following fee schedule: an annual fee of $30,000, and the Chairman of the Board and the
Chairman of the Audit Committee received additional fee of $30,000 and $10,000, respectively. Fees
earned through September 30, 2010 were paid in cash quarterly in arrears. Effective August 25,
2010, members of each the Audit Committee, Compensation and Nominating Committee and a Special
Committee of Independent Directors (which was formed in connection with the Merger) were paid a
one-time fee of $10,000. The Special Committee of Independent Directors was not reappointed
following completion of the Merger.
On October 19, 2010, Clean Diesels Board of Directors adopted the following Board
compensation structure:
|
|
|
Position |
|
Compensation |
Member of the Board of Directors
|
|
$25,000 per year |
|
|
plus |
|
|
An annual grant of
stock options to
acquire 5,000 shares
of common stock at
an exercise price
equal to the grant
date fair market
value; timing to be
at the discretion of
the Board on the
recommendation of
the Compensation and
Nominating Committee |
|
|
|
Member of the Audit Committee
|
|
$5,000 per year |
|
|
|
Chairman of the Audit Committee
(in addition to Member compensation)
|
|
$10,000 per year |
|
|
|
Member of the Compensation and Nominating Committee
|
|
$5,000 per year |
|
|
|
Chairman of the Compensation and Nominating
Committee (in addition to Member compensation)
|
|
$7,500 per year |
Fees earned by the Non-Executive Directors since October 1, 2010 have been accrued, but not
yet paid. Generally, fees are expected to be paid in cash quarterly in arrears. There are no
additional fees paid for attendance at meetings. Non-Executive Directors are also eligible for
stock option awards. Stock option awards to Non-Executive Directors are, under the current policy
of the Board, granted under the Plan and are exercisable for a ten-year term and vest over time.
18
PROPOSAL No. 2
RATIFICATION OF APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee has reappointed the firm of KPMG LLP to be Clean Diesels independent
registered public accounting firm for the year 2011 and the Board of Directors is submitting the
appointment of the independent registered public accounting firm to shareholders for ratification
at the Annual Meeting. KPMG LLP has served as Clean Diesels independent registered public
accounting firm since December 14, 2010. A representative of KPMG LLP is expected to be present at
the Annual Meeting and will have the opportunity to respond to appropriate questions and, if the
representative desires to do so, to make a statement.
Neither the Companys By-laws nor other governing documents or law require shareholder
ratification of the appointment of KPMG LLP as the Companys independent registered public
accounting firm. However, the Audit Committee of the Board of Directors recommended, and the Board
of Directors is, submitting the appointment of KPMG LLP to the shareholders for ratification as a
matter of good corporate practice. If the shareholders fail to ratify the appointment, the Audit
Committee will reconsider whether or not to retain that firm. Even if the appointment is ratified,
the Audit Committee in its discretion may direct the appointment of a different independent
registered public accounting firm at any time if it determines that such a change would be in the
best interests of the Company and its shareholders.
The affirmative vote of the holders of a majority of the shares present in person or
represented by proxy and entitled to vote at the Annual Meeting will be required to ratify the
appointment of KPMG LLP.
Dismissal of Prior Audit Firm
On December 14, 2010, the Audit Committee of our Board of Directors approved the dismissal of,
and we dismissed, EisnerAmper LLP (formerly known as Eisner LLP) as our independent registered
public accounting firm.
On October 15, 2010, we completed the merger of our wholly-owned subsidiary, CDTI Merger Sub,
Inc., with and into Catalytic Solutions, Inc., a California corporation (CSI), as contemplated by
the Agreement and Plan of Merger dated May 13, 2010, as amended by letter agreements dated
September 1, 2010 and September 14, 2010 (the Merger Agreement). We refer to this transaction as
the Merger. The Merger was accounted for as a reverse acquisition and, as a result, our companys
(the legal acquirer) consolidated financial statements are now those of CSI (the accounting
acquirer), with the assets and liabilities, and revenues and expenses, of our company included
effective from the date of the closing of the Merger. KPMG LLP served as CSIs independent
registered public accounting firm since 2001.
The audit report of EisnerAmper LLP on our consolidated financial statements as of December
31, 2009 and 2008 and for each of the years in the three-year period ended December 31, 2009 did
not contain an adverse opinion or a disclaimer of opinion and was not qualified or modified as to
uncertainty, audit scope or accounting principles, except that the report contained an explanatory
paragraph stating that [a]s described in Note 2 to the consolidated financial statements, [Clean
Diesel Technologies, Inc.] elected to measure certain financial assets at fair value effective from
January 1, 2008.
The audit report of EisnerAmper LLP on our consolidated financial statements as of December
31, 2008 and 2007 and for each of the years in the three-year period ended December 31, 2008 did
not contain an adverse opinion or a disclaimer of opinion and was not qualified or modified as to
uncertainty, audit scope or accounting principles, except that the report contained an explanatory
paragraph stating that [a]s described in Note 2 to the Consolidated Financial Statements,
effective January 1, 2008, [Clean Diesel Technologies, Inc.] adopted Statement of Financial
Accounting Standards No. 159, []The Fair Value Option for Financial Assets and Liabilities.[]
The audit report of EisnerAmper LLP on the effectiveness of our internal control over financial
reporting as of December 31, 2008 did not contain an adverse opinion or a disclaimer of opinion and
was not qualified or modified as to uncertainty, audit scope, or accounting principles.
19
During the fiscal years ended December 31, 2009 and 2008, and through December 14, 2010, there
were no disagreements (as defined in Item 304(a)(1)(iv) of Regulation S-K and the related
instructions to Item 304 of Regulation S-K) with EisnerAmper LLP on any matter of accounting
principles or practices, financial statement disclosure, or auditing scope or procedure, which
disagreements, if not resolved to the satisfaction of EisnerAmper LLP would have caused EisnerAmper
LLP to make reference to the subject matter of the disagreements in its reports on our consolidated
financial statements for such years.
During the fiscal years ended December 31, 2009 and 2008, and through December 14, 2010, there
were no reportable events (as defined in Item 304(a)(1)(v) of Regulation S-K).
We provided EisnerAmper LLP with a copy of the above disclosures and requested EisnerAmper LLP
to provide us with a letter addressed to the SEC stating whether it agrees with such disclosures. A
copy of EisnerAmper LLPs letter dated December 16, 2010 was filed as Exhibit 16.1 to our Current
Report on Form 8-K filed on December 17, 2010.
Audit Fees
The following table presents fees for audit, audit-related, tax and other services rendered by
KPMG LLP, our independent registered public accounting firm, and by our prior auditors, EisnerAmper
LLP, for the years ended December 31, 2009 and 2010:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
KPMG LLP1 |
|
|
EisnerAmper LLP |
|
|
|
2010 |
|
|
2009 |
|
|
2010 |
|
|
2009 |
|
|
|
|
|
|
Audit Fees |
|
$ |
1,022,000 |
|
|
$ |
505,000 |
|
|
$ |
161,600 |
|
|
$ |
165,300 |
|
Audit-Related Fees |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,300 |
|
Tax |
|
|
81,000 |
|
|
|
99,000 |
|
|
|
|
|
|
|
|
|
All Other Fees |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
1,103,000 |
|
|
$ |
604,000 |
|
|
$ |
161,600 |
|
|
$ |
166,600 |
|
|
|
|
|
|
|
|
|
1 |
|
No fees were paid to KPMG LLP by Clean Diesel prior to the December 14, 2010
appointment of KPMG LLP as its independent registered public accounting firm. Accordingly, all of
2009 and a portion of 2010 represents fees paid by CSI. |
In the above table, in accordance with the SECs definitions and rules, Audit Fees are fees
for professional services for the audit of a companys financial statements included in the annual
report on Form 10-K, for the review of a companys interim financial statements included in the
quarterly reports on Form 10-Q, and for services that are normally provided by the accountant in
connection with statutory and regulatory filings or engagements; Audit-Related Fees are fees for
assurance and related services that are reasonably related to the performance of the audit or
review of a companys financial statements; and Tax Fees are fees for tax compliance, tax advice
and tax planning.
Pre-Approval Policies and Procedures
Consistent with SEC rules regarding auditor independence, the Audit Committee has
responsibility for appointing, as well as setting the compensation and overseeing the work of, the
independent registered public accounting firm. In recognition of this responsibility, the Audit
Committees policy is to approve in advance an engagement of our independent registered public
accounting firm for any audit or non-audit service. All services provided by EisnerAmper LLP and
KPMG LLP to Clean Diesel during fiscal 2010, as described above, were approved by the Audit
Committee in advance of EisnerAmper LLP or KPMG LLP, as the case may be, providing such services.
YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE RATIFICATION
OF KPMG LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2011.
20
REPORT OF THE AUDIT COMMITTEE
As more fully described in its Charter, the Audit Committee assists the Board of Directors in
its oversight of Clean Diesels corporate accounting and financial reporting process and interacts
directly with and evaluates the performance of Clean Diesels independent registered public
accounting firm.
In the performance of its oversight function, the Audit Committee has reviewed Clean Diesels
audited consolidated financial statements for the year ended December 31, 2010 and has met with
both management and Clean Diesels independent registered public accounting firm, KPMG LLP, to
discuss those consolidated financial statements. The Audit Committee has discussed with KPMG LLP
those matters related to the conduct of the audit that are required to be communicated by the
independent registered public accounting firm to the Audit Committee under the Rules adopted by the
Public Company Accounting Oversight Board (PCAOB), including KPMG LLPs judgments as to the
quality, not just the acceptability, of Clean Diesels accounting principles. In addition, the
Audit Committee has reviewed and discussed with management the assessment of the effectiveness of
Clean Diesels internal control over financial reporting.
The Audit Committee discussed with Clean Diesels independent registered public accounting
firm the overall scope and plans for its audit. The Audit Committee met separately with the
independent registered public accounting firm, without management present, to discuss the results
of its audits, Clean Diesels internal controls and the overall quality of Clean Diesels financial
reporting.
The Audit Committee has received from KPMG LLP the required written disclosures and letter
regarding its independence from Clean Diesel, as set forth in the applicable requirements of the
PCAOB, and has discussed with KPMG LLP its independence. The Audit Committee has also reviewed and
considered whether the provision of other non-audit services by KPMG LLP is compatible with
maintaining the auditors independence.
Based on these reviews and discussions, the Audit Committee recommended to the Board of
Directors, and the Board of Directors approved, that the audited financial statements of Clean
Diesel for the year ended December 31, 2010 be included in Clean Diesels Annual Report on Form
10-K, which was filed with the Securities and Exchange Commission on March 31, 2011.
It is not the duty of the Audit Committee to conduct audits, to independently verify
managements representations or to determine that Clean Diesels financial statements are complete
and accurate, prepared in accordance with United States generally accepted accounting principles or
fairly present the financial condition, results of operations and cash flows of Clean Diesel.
Management has the primary responsibility for the financial statements and the reporting process,
including the system of internal control over financial reporting. The independent registered
public accounting firm retained by the Audit Committee is responsible for performing an independent
audit of the consolidated financial statements, and for reporting the results of their audit to the
Audit Committee. The Audit Committee reviews and monitors these processes. In giving its
recommendation to the Board of Directors, the Audit Committee has expressly relied on (i)
managements representation that such financial statements have been prepared in conformity with
United States generally accepted accounting principles and (ii) the report of the Companys
independent registered public accounting firm, with respect to such financial statements.
The Audit Committee
Derek Gray, Chairman
Alexander Hap Ellis III
Charles R. Engles, Ph.D.
The foregoing Report is not soliciting material, is not deemed filed with the SEC and is not to be
incorporated by reference in any filing of the Company under the Securities Act of 1933, as
amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date
hereof and irrespective of any general incorporation language in any such filing.
21
PRINCIPAL STOCKHOLDERS AND STOCK OWNERSHIP OF MANAGEMENT
The following table sets forth information known to us regarding the beneficial ownership of
common stock as of March 31, 2011 by: (i) each person know to Clean Diesel to beneficially own more
than five percent of its outstanding shares of common stock; (ii) each of the Directors (including
all nominees for Director); (iii) Clean Diesels Named Executive Officers as set forth in the
Summary Compensation Table included under Executive Compensation; and (iv) all current Directors
and executive officers as a group at such date.
|
|
|
|
|
|
|
|
|
|
|
Number of |
|
Percentage |
Beneficial Owner Name and Address1 |
|
Shares2 |
|
Beneficially Owned3 |
RockPort Capital Partners 4 |
|
|
458,023 |
|
|
|
11.3 |
% |
Cycad Group LLC 5 |
|
|
407,475 |
|
|
|
10.1 |
% |
John A. Kanis 6 |
|
|
398,722 |
|
|
|
9.7 |
% |
EnerTech Capital Partners 7 |
|
|
344,094 |
|
|
|
8.6 |
% |
Allen & Company LLC 8 |
|
|
377,776 |
|
|
|
6.7 |
% |
|
|
|
|
|
|
|
|
|
Directors: |
|
|
|
|
|
|
|
|
Charles F. Call 9 |
|
|
62,784 |
|
|
|
1.6 |
% |
Bernard H. Bud Cherry 10 |
|
|
23,761 |
|
|
|
* |
|
Alexander Hap Ellis III 11 |
|
|
2,917 |
|
|
|
* |
|
Charles R. Engles, Ph.D. 12 |
|
|
26,971 |
|
|
|
* |
|
Derek R. Gray 13 |
|
|
66,199 |
|
|
|
1.6 |
% |
Mungo Park 14 |
|
|
97,522 |
|
|
|
2.4 |
% |
Timothy Rogers 15 |
|
|
11,786 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
|
Named Executive Officers: |
|
|
|
|
|
|
|
|
Michael L. Asmussen 16 |
|
|
1,389 |
|
|
|
* |
|
Charles W. Grinnell 17 |
|
|
10,048 |
|
|
|
* |
|
Daniel K. Skelton, Ph.D. 18 |
|
|
8,410 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
|
Executive Officers: |
|
|
|
|
|
|
|
|
Stephen J. Golden, Ph.D. 19 |
|
|
24,883 |
|
|
|
* |
|
Christopher J. Harris 20 |
|
|
6,250 |
|
|
|
* |
|
Nikhil A. Mehta 21 |
|
|
9,500 |
|
|
|
* |
|
David E. Shea 22 |
|
|
2,500 |
|
|
|
* |
|
All Current Directors and Officers as a Group (12 persons) 23 |
|
|
343,483 |
|
|
|
8.1 |
% |
|
|
|
* |
|
less than 1% |
|
1 |
|
The address of RockPort Capital Partners is 160 Federal Street, 18th
Floor, Boston, Massachusetts 02110; the address of Cycad Group LLC is 6187 Carpinteria Avenue,
Suite 300, Carpinteria, California 93014; the address of John A. Kanis is c/o Kanis, S.A., 82 Z
Portland Place, London W1B 1NS, England; the address of EnerTech Capital Partners is Building D,
Suite 105, 625 West Ridge Pike, Conshohocken, Pennsylvania 19428; the address of Allen & Company
LLC is 711 Fifth Avenue, New York, New York 10022; the address of the Directors, Named Executive
Officers and Executive Officers is c/o Clean Diesel Technologies, Inc., 4567 Telephone Road, Suite
206, Ventura, California 93003. |
|
2 |
|
To our knowledge, unless otherwise indicated in the footnotes to this table, we
believe that each of the persons named in the table has sole voting and investment power with
respect to all shares shown as beneficially owned by them, subject to community property laws
where applicable (or other beneficial ownership shared with a spouse) and the information
contained in this table and these notes. |
|
|
|
Beneficial ownership has been determined in accordance with SEC rules, which generally attribute
beneficial ownership of securities to each person who possesses, either solely or shared with
others, the power to vote or dispose of those securities. These rules also treat as beneficially
owned all shares that a person would receive upon exercise of stock options or warrants held by
that person that are immediately exercisable or exercisable within |
22
|
|
|
|
|
60 days of the determination date, which is March 31, 2011 for this purpose. Such shares are deemed
to be outstanding for the purpose of computing the number of shares beneficially owned and the
percentage ownership of the person holding such options or warrants, but these shares are not
treated as outstanding for the purpose of computing the percentage ownership of any other person. |
|
3 |
|
The percent of Clean Diesel beneficially owned is based on 3,987,812 shares of Clean
Diesel common stock issued and outstanding on March 31, 2011. |
|
4 |
|
As reflected in the Schedule 13Ds filed on October 22, 2010 by RockPort Capital
Partners, L.P. and RP Co-Investment Fund I, L.P. Alexander Ellis, III (one of our Directors),
Janet B. James, William E. James, Charles J. McDermott, David J. Prend and Stoddard M. Wilson
share voting and investment power over the shares listed above. Beneficial ownership includes
375,853 shares and warrants to acquire 40,220 shares at $7.92 per share held by RockPort Capital
Partners, L.P. and 26,842 shares and warrants to acquire 15,108 shares at $7.92 per share held by
RP Co-Investment Fund I, L.P. Mr. Ellis disclaims beneficial ownership except to the extent of his
pecuniary interest in such shares. |
|
5 |
|
As reflected in the Schedule 13G filed on October 22, 2010 by Cycad Group LLC, K.
Leonard Judson and Paul F. Glenn share voting and investment power over the shares listed above.
Beneficial ownership includes 369,472 shares held directly, warrants to acquire 28,144 shares at
$7.92 per share and warrants to acquire 9,859 shares at $2.79 per share. Beneficial ownership does
not reflect warrants to acquire an additional 8,607 shares at $7.92 per share, which warrants are
issuable upon the exercise in full of the warrants to acquire 9,859 shares. |
|
6 |
|
As reflected in the Schedule 13G filed on February 3, 2011 by Kanis S.A. and John A.
Kanis, includes 266,548 shares of common stock and warrants to acquire 128,707 shares of common
stock held by Kanis S.A. Does not include warrant to acquire 25,000 shares of common stock held by
Kanis S.A. that is not currently exercisable. Does not include 369,853 shares issuable upon
conversion of convertible note to be issued pursuant to a Subordinated Convertible Notes
Commitment Letter dated April 11, 2011. John A. Kanis is the sole stockholder of Kanis S.A. and
controls the voting and investment decisions of Kanis S.A., accordingly, John A. Kanis may be
deemed to share beneficial ownership of all shares of common stock beneficially owned by Kanis
S.A. |
|
7 |
|
As reflected in the Schedule 13G/A filed on February 4, 2011 by EnerTech Capital
Partners II L.P., ECP II Management L.P., ECP II Management, LLC and ECP II Interfund L.P., Scott
B. Ungerer, William G. Kingsley, Robert E. Keith and Mark J. DeNino share voting and investment
power over the shares listed above. Beneficial ownership includes 315,441 shares and warrants to
acquire 16,010 shares at $7.92 per share held by EnerTech Capital Partners II L.P. and 12,032
shares and warrants to acquire 611 shares at $7.92 per share held by ECP II Interfund L.P. |
|
8 |
|
As reflected in the Schedule 13G filed on February 4, 2011 by Allen & Company LLC,
beneficial ownership includes 111,110 shares and warrants to acquire 166,666 shares at $7.92 per
share. |
|
9 |
|
For Mr. Call, includes warrants to acquire 137 shares at $7.92 per share and 62,480
shares subject to options exercisable within 60 days. |
|
10 |
|
For Mr. Cherry, includes warrants to acquire 9,380 shares at $7.92 per share and
2,917 shares subject to options exercisable within 60 days. |
|
11 |
|
For Mr. Ellis, reflects 2,917 shares subject to options exercisable within 60 days.
Mr. Ellis disclaims beneficial ownership of shares beneficially owned by RockPort Capital Partners
except to the extent of his pecuniary interest in such shares. |
|
12 |
|
For Dr. Engles, includes warrants to acquire 10,825 shares at $7.92 per share and
2,917 shares subject to options exercisable within 60 days. |
|
13 |
|
For Mr. Gray, includes warrants to acquire 13,457 shares at $7.92 per share and
14,830 shares subject to options exercisable within 60 days. |
|
14 |
|
For Mr. Park, includes 32,414 shares and warrants to acquire 62,191 shares at a
weighted average price of $53.98 per share, which are held by Innovator Capital Limited. Mr. Park
is a principal of Innovator Capital Limited and may be deemed to beneficially own shares held by
Innovator Capital Limited. Also includes 2,917 shares subject to options exercisable within 60
days. |
|
15 |
|
For Mr. Rogers, includes 11,720 shares subject to options exercisable within 60
days. |
23
|
|
|
16 |
|
For Mr. Asmussen, reflects 1,389 shares subject to options exercisable within 60
days. |
|
17 |
|
For Mr. Grinnell, includes 9,330 shares subject to options exercisable within 60
days. |
|
18 |
|
For Dr. Skelton, includes 8,022 shares subject to options exercisable within 60 days. |
|
19 |
|
For Dr. Golden, includes warrants to acquire 8,327 shares at $7.92 per share and
8,000 shares subject to options exercisable within 60 days. |
|
20 |
|
For Mr. Harris, reflects 6,250 shares subject to options exercisable within 60 days. |
|
21 |
|
For Mr. Mehta, reflects 9,500 shares subject to options exercisable within 60 days. |
|
22 |
|
For Mr. Shea, reflects 2,500 shares subject to options exercisable within 60 days. |
|
23 |
|
Includes warrants to acquire 104,317 shares and 134,970 shares issuable upon exercise
of stock options. |
Section 16 (a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Companys
Directors and executive officers, and persons who own more than ten percent of a registered class
of the Companys equity securities, to file with the SEC initial reports of ownership and reports
of changes in ownership of common stock and other equity securities of the Company. Officers,
Directors and greater than ten percent stockholders are required by SEC regulation to furnish the
Company with copies of all Section 16(a) forms they file.
To the Companys knowledge, based solely on a review of the copies of such reports furnished
to the Company, all Section 16(a) filing requirements applicable to Clean Diesels executive
officers, Directors and greater than ten percent beneficial owners during the year ended December
31, 2010 were complied with, except that in prior years, Mr. Rogers failed to report two
transactions on Form 4: the sale of 756 shares in 2007 and the sale of 133 shares in 2008 (share
amounts adjusted to reflect the one-for-six reverse stock split that took effect on October 15,
2010).
24
EXECUTIVE COMPENSATION
Summary Compensation Table
The table below sets forth information for the year indicated with respect to compensation
earned by 1) the three individuals who served as Chief Executive Officer during the year ended
December 31, 2010; 2) the next two most highly compensated executive officers other than the Chief
Executive Officer who were serving as executive officers as of December 31, 2010 and who earned
more than $100,000 during such year; and 3) two additional individuals who served as executive
officers during the year ended December 31, 2010 and who would otherwise have been included but for
the fact that they were not longer serving as executive officers at December 31, 2010. We refer to
these individuals in this Proxy Statement as the Named Executive Officers.
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All Other |
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Name and Principal |
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Stock |
|
Comp- |
|
|
Position |
|
Year |
|
Salary ($) |
|
Bonus ($) |
|
Awards ($) |
|
ensation ($) |
|
Total ($) |
Charles F. Call 1 |
|
|
2010 |
|
|
$ |
102,480 |
|
|
$ |
40,000 |
|
|
|
|
|
|
|
|
|
|
$ |
142,480 |
|
President and Chief |
|
|
2009 |
|
|
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|
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|
|
|
|
|
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|
|
|
|
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|
Executive Officer, |
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Director |
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Michael L. Asmussen 2 |
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|
2010 |
|
|
$ |
224,643 |
|
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|
|
|
|
|
|
|
|
|
|
$ |
224,643 |
|
Former President and |
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|
2009 |
|
|
$ |
276,779 |
|
|
|
|
|
|
$ |
16,366 |
|
|
$ |
249,869 |
|
|
$ |
543,014 |
|
Chief Executive Officer,
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Former Director |
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|
Timothy Rogers 3 |
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|
2010 |
|
|
$ |
218,021 |
|
|
$ |
25,000 |
|
|
|
|
|
|
|
|
|
|
$ |
243,021 |
|
Former Interim President |
|
|
2009 |
|
|
$ |
217,063 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
217,063 |
|
and Chief Executive
|
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Officer;
Current Sr.
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Corporate Vice
President,
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Product
Development and
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Director |
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Daniel K. Skelton, Ph.D.4 |
|
|
2010 |
|
|
$ |
155,164 |
|
|
$ |
15,000 |
|
|
|
|
|
|
|
|
|
|
$ |
170,164 |
|
Vice President, Sales |
|
|
2009 |
|
|
$ |
146,325 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
146,325 |
|
and Marketing |
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John B. Wynne 5 |
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2010 |
|
|
$ |
265,198 |
|
|
|
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|
|
|
|
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|
|
|
$ |
265,198 |
|
Former Vice President, |
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|
2009 |
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Treasurer and Interim Chief
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Financial Officer |
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Charles W. Grinnell 6 |
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|
2010 |
|
|
$ |
110,000 |
|
|
$ |
86,730 |
|
|
|
|
|
|
|
|
|
|
$ |
196,730 |
|
Former General Counsel |
|
|
2009 |
|
|
$ |
100,833 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
100,833 |
|
and Secretary, Former
Director |
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|
1 |
|
Mr. Call became President and Chief Executive Officer and Director on October 15,
2010 upon closing of the Merger. Bonus is a one-time bonus payment for exceptional performance with
respect to the Merger and related matters. Mr. Call is eligible for a fiscal year 2010 performance
bonus; however, the amount is not yet calculable. It is expected that the amount will be
determined in the second quarter of 2011 and will be reported on Form 8-K. |
|
2 |
|
Mr. Asmussen served as President and Chief Executive Officer until his resignation on
September 14, 2010. Salary for 2010 includes accrued vacation paid at the time of resignation in
the amount of $4,316. Stock Award amount in 2009 represents the aggregate grant date fair value
computed in accordance with FASB ASC Topic 718 (see Note 8 to the Companys consolidated financial
statements included in the Annual Report on Form 10-K for the year ended December 31, 2009). Other
compensation in 2009 represents relocation of Mr. Asmussen from Michigan to Connecticut and related
tax gross-up. |
|
3 |
|
Mr. Rogers served as Interim President and Chief Executive Officer from September 14,
2010 until October 15, 2010 and currently serves as Senior Corporate Vice President, Product
Development and Director (although he has resigned effective April 30, 2011). Effective August
2010, Mr. Rogers elected to be paid as a consultant. Bonus in |
25
|
|
|
|
|
2010 is a one-time bonus payment for exceptional performance with respect to the Merger and related
matters. Mr. Rogers compensation is paid in GBP (British Pound) and the amounts above reflect the
currency exchange from GBP to USD obtained from www.xe.com as of the date of payment. |
|
4 |
|
Dr. Skeltons 2010 bonus is a one-time bonus payment for exceptional performance with
respect to the Merger and related matters. Dr. Skeltons compensation is paid in GBP (British
Pound) and the amounts above reflect the currency exchange from GBP to USD obtained from www.xe.com
as of the date of payment. |
|
5 |
|
Mr. Wynne served as Vice President, Treasurer and Interim Chief Financial Officer from
April 23, 2010 until October 15, 2010, when he was replaced by Nikhil A. Mehta, current Treasurer
and Chief Financial Officer, concurrent with the closing of the Merger. Mr. Wynnes contract ended
on December 9, 2010. Mr. Wynnes salary was paid directly to SFN Group (formerly Tatum LLC). |
|
6 |
|
Mr. Grinnell served as Vice President, General Counsel and Corporate Secretary and
Director until October 15, 2010, the closing date of the Merger. Bonus in 2010 is a one-time
payment for continued service in a transitional capacity (but not as an executive officer) in
connection with the Merger pursuant to a Transition Services Agreement dated effective June 30,
2010. Mr. Grinnells employment with Clean Diesel terminated on February 15, 2011. |
Narrative Disclosure to Summary Compensation Table
The key component of Clean Diesels 2010 compensation was base salary pursuant to each Named
Executive Officers employment agreements with Clean Diesel (or assumed by Clean Diesel as a result
of the Merger in the case of Mr. Call). No awards were made under Clean Diesels incentive cash
bonus program, called the Management Incentive Program (MIP) in the year ended December 31, 2010.
In light of exceptional performance with respect to the Merger and related matters, the Committee
awarded special one-time bonuses to be paid to certain employees. There were no grants of any
equity awards to the Named Executive Officers under Clean Diesels 1994 Incentive Plan (the Plan)
in the year ended December 31, 2010. The completion of the Merger did not trigger the acceleration
of any unvested awards under the Plan and there were no change in control payments made to any
executives as a result of the Merger. Mr. Grinnell received a transition bonus pursuant to a
Transition Services Agreement that Clean Diesel entered into with Mr. Grinnell effective June 30,
2010.
26
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, 2010.
|
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|
|
Number of |
|
|
|
|
|
|
Securities |
|
|
|
|
|
|
Underlying |
|
|
|
|
|
|
Unexercised Options |
|
Option Exercise |
|
Option Expiration |
Name |
|
# Exercisable |
|
Price |
|
Date1 |
Charles F. Call 2 |
|
|
|
|
|
|
|
|
|
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|
|
Michael L. Asmussen 3 |
|
|
1,111 |
|
|
$ |
50.40 |
|
|
|
04/06/11 |
|
|
|
|
278 |
|
|
$ |
16.23 |
|
|
|
04/06/11 |
|
Timothy Rogers 4 |
|
|
3,333 |
|
|
$ |
58.50 |
|
|
|
09/30/13 |
|
|
|
|
666 |
|
|
$ |
58.20 |
|
|
|
12/09/14 |
|
|
|
|
555 |
|
|
$ |
30.60 |
|
|
|
12/20/15 |
|
|
|
|
2,166 |
|
|
$ |
54.60 |
|
|
|
04/30/16 |
|
|
|
|
2,500 |
|
|
$ |
114.75 |
|
|
|
04/30/16 |
|
|
|
|
2,500 |
|
|
$ |
16.23 |
|
|
|
04/30/16 |
|
Daniel K. Skelton, Ph.D. 5 |
|
|
1,000 |
|
|
$ |
43.50 |
|
|
|
03/04/15 |
|
|
|
|
189 |
|
|
$ |
30.60 |
|
|
|
12/20/15 |
|
|
|
|
1,000 |
|
|
$ |
54.60 |
|
|
|
01/04/17 |
|
|
|
|
833 |
|
|
$ |
114.75 |
|
|
|
12/18/17 |
|
|
|
|
2,500 |
|
|
$ |
16.23 |
|
|
|
12/22/18 |
|
John B. Wynne |
|
|
|
|
|
|
|
|
|
|
|
|
Charles W. Grinnell 6 |
|
|
666 |
|
|
$ |
58.95 |
|
|
|
03/14/11 |
|
|
|
|
1,666 |
|
|
$ |
87.00 |
|
|
|
03/12/12 |
|
|
|
|
1,333 |
|
|
$ |
49.50 |
|
|
|
06/11/13 |
|
|
|
|
666 |
|
|
$ |
92.10 |
|
|
|
12/02/13 |
|
|
|
|
666 |
|
|
$ |
58.20 |
|
|
|
12/09/14 |
|
|
|
|
333 |
|
|
$ |
30.60 |
|
|
|
12/20/15 |
|
|
|
|
1,000 |
|
|
$ |
54.60 |
|
|
|
02/13/16 |
|
|
|
|
1,666 |
|
|
$ |
114.75 |
|
|
|
02/13/16 |
|
|
|
|
2,000 |
|
|
$ |
16.23 |
|
|
|
02/13/16 |
|
|
|
|
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 and vests on the following schedule:
one-third on grant and one-third on each of the first and second anniversaries of grant. On
resignation, vested options continue to be exercisable for time periods depending on length of
employment as provided in the Plan. 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. |
|
2 |
|
Mr. Call did not hold any outstanding equity awards as of December 31, 2010.
Subsequent to December 31, 2010, Mr. Call was granted an option to acquire 124,959 shares. |
|
3 |
|
Mr. Asmussen resigned as President and Chief Executive Officer on September 14, 2010,
and did not sit for reelection as a Director at our 2010 annual meeting held on October 12, 2010.
Expiration dates reflect acceleration as a result of Mr. Asmussens resignation. |
|
4 |
|
Mr. Rogers resigned as Senior Corporate Vice President, Product Development and
Director effective as of April 30, 2011. Expiration dates reflect acceleration as a result of Mr.
Rogers resignation. |
|
5 |
|
Subsequent to December 31, 2010, Dr. Skelton was granted an option to acquire 5,000
shares. |
27
|
|
|
6 |
|
Mr. Grinnell resigned as a Director and ceased acting as an executive officer of
Clean Diesel on October 15, 2010 in connection with the Merger. Mr. Grinnell remained in a
transitional capacity through February 15, 2011. Expiration dates reflect acceleration as a result
of Mr. Grinnells resignation. |
Change in Control Payment upon Termination of Employment
With the exception of Mr. Wynne, who served as Vice President, Treasurer and Interim Chief
Financial Officer from April 23, 2010 until October 15, 2010, and in a transitional capacity
through December 9, 2010 pursuant to an agreement with SFN Group (formerly Tatum LLC), the
employment of each of the Named Executive Officers was pursuant to an employment agreement with
Clean Diesel (or assumed by Clean Diesel in the Merger, for Mr. Call). For Messrs. Asmussen and
Grinnell, no payments were made under their respective employment agreements in connection with the
Merger or in connection with their respective terminations of employment. For Messrs. Rogers and
Skelton, their respective employment agreements with Clean Diesel do not provide for any additional
severance benefits payable in the event of termination of employment for any reason.
For Mr. Call, the following summarizes the potential payments upon employment termination and
change in control events, if any, provided for in his employment agreement.
Reason for Termination of Employment Benefits
|
|
|
Resignation for Good Reason 1
|
|
12 months of annual base salary as severance |
|
|
Pro rata bonus |
|
|
12 months of health and welfare benefits |
|
|
|
Disability 1
|
|
6 months of annual base salary as severance |
|
|
Pro rata bonus |
|
|
6 months of health and welfare benefits |
|
|
|
Without Cause 1
|
|
6 months of annual base salary as severance |
|
|
Up to 6 months of salary 2 |
|
|
Up to 6 months of pro rata bonus 2 |
|
|
Up to 6 months of health and welfare benefits 2 |
|
|
|
Death
|
|
Pro rata bonus |
|
|
|
1 |
|
Payment of benefits subject to a limited exception for violations of the
non-compete covenant, and covenants
relating to confidentiality and Clean Diesels intellectual property in Mr. Calls employment
agreement, and the signing of a release. |
|
2 |
|
Mr. Call is entitled to 6 months notice under his employment agreement. Salary, pro
rata bonus and health
and welfare benefits are payable pro rata for the period of time that such notice period is less
than 6 months. |
Under the terms of Clean Diesels 1994 Incentive Plan, in the event of termination of
employment due to resignation, vested options continue to be exercisable for time periods depending
on length of employment (from 180 days up to five years), but in no event later than the ten-year
term. In the case of termination of employment due to death, total disability or normal retirement,
vested options continue in force and are exercisable until the expiration of the basic ten-year
term, but the unvested portion of any outstanding options terminates and has no effect. In
addition, in the event of termination for cause, as provided in the option award agreement, all
options granted terminate immediately. In the event of a Change in Control (as defined in the
Plan) any and all options become immediately exercisable.
28
Equity Compensation Plan Information
The following table sets forth information as of December 31, 2010 regarding equity
compensation plans approved by our shareholders and those not approved by our shareholders.
|
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|
|
|
|
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|
|
|
Number of |
|
|
|
|
|
|
|
|
|
|
securities |
|
|
|
|
|
|
|
|
|
|
remaining |
|
|
Number of |
|
|
|
|
|
available for |
|
|
securities to be |
|
|
|
|
|
future issuance |
|
|
issued upon |
|
Weighted average |
|
under equity |
|
|
exercise of |
|
exercise price of |
|
compensation |
|
|
outstanding |
|
outstanding |
|
plans (excluding |
|
|
options, warrants |
|
options, warrants |
|
securities reflected |
Plan Category |
|
and rights |
|
and rights |
|
in column (a))1 |
Equity compensation
plans approved by
security holders: |
|
|
|
|
|
|
|
|
|
|
|
|
1994 Incentive Plan |
|
|
151,801 |
|
|
$ |
53.55 |
|
|
|
541,060 |
|
Equity compensation
plans not approved by
security holders: |
|
|
|
|
|
|
|
|
|
|
|
|
N/A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 |
|
The maximum number of awards allowed under the 1994 Incentive Plan is 17.5% of
our issued and outstanding common stock less the outstanding options, and is subject to a
sufficient number of shares of authorized capital. |
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 Clean Diesel shareholders will be
householding our proxy materials. A single annual report and proxy statement will be delivered to
multiple shareholders sharing an address unless contrary instructions have been received from the
affected shareholders. 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 shareholder 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 shareholder of record, notify your broker. |
Clean Diesel will promptly deliver, upon request to the Clean Diesel address or telephone
number listed above, 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
29
not a shareholder of record; or contact our transfer agent if you are a shareholder 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.
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By Order of the Board of Directors,
Charles F. Call
Director and Chief Executive Officer
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Ventura, California April 25, 2011 |
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A copy of the Companys Annual Report on Form 10-K for the year ended December 31, 2010 is
available without charge upon written request to: Investor Relations, Clean Diesel Technologies,
Inc., 4567 Telephone Rd., Suite 206, Ventura, California 93003, U.S.A.
30
ANNUAL MEETING OF STOCKHOLDERS OF
CLEAN DIESEL TECHNOLOGIES, INC.
June 9, 2011
IMPORTANT NOTICE REGARDING INTERNET AVAILABILITY OF PROXY MATERIAL FOR
THE ANNUAL MEETING TO BE HELD ON JUNE 9, 2011:
The Notice of Annual Meeting, Proxy Statement, Proxy Card and Annual Report to Shareholders
are available at http://investor.cdti.com
Please sign, date and mail
your proxy card in the
envelope provided as soon
as possible.
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Please detach along
perforated line and mail in the envelope provided. |
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PLEASE SIGN, DATE AND
RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE
OR BLACK INK AS SHOWN HERE x
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE
FOR ALL OF THE NOMINEES LISTED IN PROPOSAL 1: |
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THE BOARD OF DIRECTORS
RECOMMENDS A VOTE FOR PROPOSAL 2:
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1. Election of Directors:
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To approve the election as directors
of the following: |
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FOR |
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AGAINST |
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ABSTAIN |
c FOR
ALL NOMINEES
cWITHHOLD
AUTHORITY
FOR
ALL NOMINEES
cFOR
ALL EXCEPT
(See
instructions below)
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NOMINEES:
O Charles F. Call
O Bernard H. Bud
Cherry
O Alexander Hap
Ellis III
O Charles R. Engles,
Ph.D.
O Derek R. Gray
O Mungo Park |
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2. To
ratify the appointment of KPMG LLP as Clean Diesels independent registered
public accounting firm for the year ending December 31, 2011.
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c |
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INSTRUCTIONS:
To withhold authority to vote for any individual nominee(s), mark
FOR ALL EXCEPT and fill in the circle next to each
nominee you wish to withhold, as shown here: n
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To change the address on your account, please check
the box at right and indicate your new address in the address space
above. Please note that changes to the registered name(s) on the account
may not be submitted via this method.
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Signature of Stockholder
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Date:
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Signature of Stockholder
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Date: |
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Note: |
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Please sign exactly as your name or names appear on this Proxy. When shares are held
jointly, each holder should sign. When signing as executor, administrator, attorney, trustee
or guardian, please give full title as such. If the signer is a corporation, please sign full
corporate name by duly authorized officer, giving full title as such. If signer is a
partnership, please sign in partnership name by authorized person. |
SOLICITED BY THE BOARD OF DIRECTORS OF
CLEAN DIESEL TECHNOLOGIES, INC.
For The
Annual Meeting of Shareholders - June 9, 2011
The
undersigned shareholder of Clean Diesel Technologies, Inc. hereby appoints
Charles F. Call and Nikhil A. Mehta and each of them acting individually,
with full power of substitution in each, the proxies of the undersigned, to
represent the undersigned and vote all shares of Clean Diesel Technologies,
Inc. Common Stock that the undersigned may be entitled to vote at the Annual
Meeting of Shareholders to be held at Clean Diesels Oxnard facility located
at 1621 Fiske Place, Oxnard, California, 93033 on Thursday, June 9, 2011 at
10:00 a.m. Pacific Time and at any and all adjournments or postponements thereof,
as indicated on the reverse side.
This proxy, when properly executed, will be voted in the manner
directed herein by the undersigned shareholder. If no direction is given, this proxy will be voted FOR the nominees set forth
in Proposal 1 and FOR Proposal 2. This proxy also delegates discretionary authority to vote upon such other matters of which
Clean Diesel Technologies, Inc. does not have advance notice that may properly come before the Annual Meeting and any and all postponements
or adjournments thereof, and upon matters incidental to the conduct of the Annual Meeting and any and all postponements or adjournments thereof.
(Continued and to
be signed on the reverse side.)
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