FUELCELL ENERGY INC (Form: 8-K, Received: 08/24/2020 17:01:19)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of report (Date of earliest event reported): August 24, 2020

FUELCELL ENERGY, INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware	1-14204	06-0853042
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

	3 Great Pasture Road, Danbury, Connecticut	06810
	(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (203) 825-6000

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, $0.0001 par value per share		FCEL		The Nasdaq Stock Market LLC (Nasdaq Global Market)

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 5.02.

Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On August 24, 2020, the Board of Directors (the “Board”) of FuelCell Energy, Inc. (the “Company”) approved a Long Term Incentive Plan (the “LTI Plan”) as a sub-plan consisting of awards made under the Company’s 2018 Omnibus Incentive Plan. The participants in the LTI Plan are members of senior management and include the Company’s named executive officers.

The LTI Plan will consist of three award components: (1) relative total shareholder return (“TSR”) performance shares, (2) absolute TSR performance shares, and (3) time-vesting restricted stock units. The performance shares granted in fiscal year 2020 will be earned over the three-year performance period ending on October 31, 2022, but will remain subject to a continued service-based vesting requirement until the third anniversary of the date of grant. The performance goal for the relative TSR performance shares is the TSR of the Company relative to the TSR of the Russell 2000 from May 8, 2020 through October 31, 2022. The performance goal for the absolute TSR performance shares is an increase in the Company’s stock price from May 8, 2020 through October 31, 2022. The time-vesting restricted stock units granted in fiscal year 2020 will vest at a rate of one-third (1/3) of the total number of restricted stock units on each of the first three anniversaries of the date of grant. None of the awards granted as part of the LTI Plan include any dividend equivalent or other stockholder rights. To the extent the awards are earned, they may be settled in shares or cash of an equivalent value.

The foregoing description is a summary only and is qualified by the Long Term Incentive Plan that is filed herewith as Exhibit 10.1, the Form of Relative TSR Performance Share Award Agreement that is filed herewith as Exhibit 10.2, the Form of Absolute TSR Performance Share Award Agreement that is filed herewith as Exhibit 10.3 and the Form of Restricted Stock Unit Award Agreement (U.S. Employees) previously filed as Exhibit 10.3 to the Company’s Current Report on Form 8-K dated April 5, 2018.

The target award values under the LTI Plan for the named executive officers of the Company are as follows:


Named Executive Officer	Target LTI Plan Award
Jason Few President, Chief Executive Officer and Chief Commercial Officer	$500,000
Michael S. Bishop Executive Vice President, Chief Financial Officer and Treasurer	$250,000
Jennifer D. Arasimowicz Executive Vice President, General Counsel, Chief Administrative Officer and Corporate Secretary	$235,000
Michael J. Lisowski Executive Vice President and Chief Operating Officer	$220,000
Anthony J. Leo Executive Vice President and Chief Technology Officer	$110,000

Item 9.01.

Financial Statements and Exhibits.

(d) Exhibits:

Exhibit No.		Description

10.1		FuelCell Energy, Inc. Long Term Incentive Plan as approved August 24, 2020.

10.2		Form of FuelCell Energy, Inc. 2018 Omnibus Incentive Plan Performance Share Award (Relative TSR).

10.3		Form of FuelCell Energy, Inc. 2018 Omnibus Incentive Plan Performance Share Award (Absolute TSR).

104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	FUELCELL ENERGY, INC.

Date: August 24, 2020	By:	/s/ Michael S. Bishop
		Michael S. Bishop
		Executive Vice President, Chief Financial Officer and Treasurer

EXHIBIT 10.1

FuelCell Energy, Inc.

Long Term Incentive Plan

As Approved August 24, 2020

FUELCELL ENERGY, INC.

LONG TERM INCENTIVE PLAN

Background: This Long Term Incentive Plan (this “LTI Plan”) of FuelCell Energy, Inc. (the “Company”) is a sub-plan consisting of awards made under the Company’s 2018 Omnibus Incentive Plan (the “Omnibus Plan”). This LTI Plan and all awards described herein are subject to the Omnibus Plan and the individual award agreements entered into in connection with this LTI Plan. Capitalized terms used in this LTI Plan and not otherwise defined will have the meaning given in the Omnibus Plan.

Eligible Participants: The executive officers of the Company and other members of senior management designated by the Board of Directors of the Company or its Compensation Committee (the “Committee”) will be eligible for awards under this LTI Plan. In addition, subject to the limitations described below under “Delegated Award Authority,” the Company’s Chief Executive Officer (“CEO”) may designate additional participants to receive CEO Discretionary Awards (as defined below).

Purpose: To attract, retain, motivate, and reward key employees and executives for meeting or exceeding long term financial objectives of the Company and to align the long-term growth and performance goals of key employees and executives with those of shareholders.

Awards: There will be three (3) award components granted annually under this LTI Plan:

•

Relative Total Shareholder Return (“TSR”) Performance Shares, representing 40% of the total target award amount;

•

Absolute TSR Performance Shares, representing 40% of the total target award amount; and

•

Time-Vesting Restricted Stock Units (“RSUs”), representing 20% of the total target award amount.

CEO Discretionary Awards may consist of some or all of the above in different proportions selected by the CEO.

Award Determination: Target award values for the awards of Performance Shares and RSUs (other than CEO Discretionary Awards and the target award value for the CEO) shall be established and approved by the Committee. The target value for the CEO award shall be determined by the independent members of the Board of Directors of the Company with a recommendation from the Committee, and target award values for the CEO Discretionary Awards shall be determined by the CEO as described under “Delegated Award Authority.” Performance Shares and RSUs are valued for this purpose based on the average closing price of the Company’s common stock over the 20 trading days immediately preceding the grant date. The grant date of awards other than CEO Discretionary Awards shall, unless otherwise determined by the Committee (or the Board of Directors of the Company, in the case of the CEO award), be the date on which the Committee (or the Board of Directors of the Company, in the case of the CEO award) approves the award.

Notwithstanding any other provisions of this LTI Plan document, all determinations with regard to awards for the Company’s executive officers (including target award values) shall be made exclusively by the Committee, except for the award to the CEO (including the CEO target award value), which shall be made by the independent directors of the Board of Directors of the Company, based on a recommendation from the Committee.

Performance Criteria for Performance Shares: Performance Shares granted to LTI Plan participants will be earned only upon achievement of the performance criteria set forth below. The Performance Shares will have a performance period ending on the last day of the second full fiscal year that follows the year in which

the Performance Shares are granted, with a continued service-based vesting requirement until the third anniversary of the date of grant.

The number of Performance Shares that will be deemed earned by each LTI Plan participant will be determined as of the end of the Performance Period.

The performance criteria and certain other terms of the Performance Shares are described below:

Relative TSR Performance Shares

Performance Assessment:

TSR of the Company relative to the TSR of the Russell 2000

Performance Period:

The three consecutive fiscal years beginning with the fiscal year that includes the grant date (provided that, for the Performance Shares granted in fiscal year 2020, the Performance Period shall be May 8, 2020 through October 31, 2022)

Payout Calibration:

•100% plus or minus 0.5x the difference between the Company’s TSR and the Russell 2000 index composite TSR

•Payout is capped at 200% of the target number of Performance Shares

•Payout is capped at 100% of the target number of Performance Shares if the Company’s absolute TSR over the performance period is negative

The Company’s TSR is calculated by subtracting Beginning Stock Price from Ending Stock Price (as each term is defined below) for the Performance Period, adding any dividends during the period, and then dividing the result by the Company’s Beginning Stock Price.

“Beginning Stock Price” shall mean the average closing price of the Company’s common stock over the 20 consecutive trading days ending on the last trading day immediately prior to the beginning of the Performance Period (or, in the case of the Performance Shares granted in fiscal year 2020, May 8, 2020).

“Ending Stock Price” shall mean the average closing price of the Company’s common stock over the 20 consecutive trading days ending on the last day of the Performance Period.

Performance Shares earned on the basis of Relative TSR Performance remain subject to vesting based on continued service until the third anniversary of the grant date.

Absolute TSR Performance Shares

Performance Assessment:	Closing stock price
Performance Period:	The three consecutive fiscal years beginning with the fiscal year that includes the grant date (provided that, for the Performance Shares granted in fiscal year 2020, the Performance Period shall be May 8, 2020 through October 31, 2022)

Payout Calibration:

•An increase, in an amount specified by the Committee, in the price of the Company’s common stock over the average closing price of the Company’s common stock over the 20 consecutive trading days ending on the last trading day immediately prior to the beginning of the Performance Period (or, in the case of the Performance Shares granted in fiscal year 2020, ending on May 8, 2020) earns 50% of the target number of Performance Shares

•Each price hurdle must be met for 20 consecutive trading days

•Price hurdles may be met at any point during the Performance Period

Performance Shares earned on the basis of Absolute TSR Performance remain subject to vesting based on continued service until the third anniversary of the grant date.

Vesting Criteria for Restricted Stock Units: RSUs granted to LTI Plan participants will vest based on continued service at a rate of one-third (1/3) of the total number of RSUs granted on each of the first three anniversaries of the grant date.

Effect of Termination: If a participant’s employment terminates for any reason prior to the date Performance Shares or RSUs are fully vested, then all Performance Shares or RSUs that have not vested shall be immediately forfeited, except as may otherwise be provided by the Committee (or in the case of the CEO, the independent members of the Board of Directors of the Company) or under the Omnibus Plan.

No Dividend Equivalents: No dividend equivalents will be paid on Performance Shares and RSUs, nor will the Performance Shares or RSUs represent any right to dividends with respect to the shares subject to the Performance Share or RSU awards.

Termination and Amendment. The Committee or the Board of Directors of the Company may amend, modify or terminate this LTI Plan at any time; provided that no such amendment, modification or termination shall adversely affect awards previously granted under this LTI Plan without the consent of the award holder except to the extent permitted without such consent by the terms of the applicable award agreement or the Omnibus Plan.

Delegated Award Authority: The CEO is delegated the authority to grant Performance Shares and RSUs (“CEO Discretionary Awards”) to employees of, or other service providers to, the Company other than any executive officer, any person recruited or hired as a successor to any executive officer or any other direct report to the CEO, or any Executive Vice President, Senior Vice President or Vice President, and to administer and modify such Performance Shares and RSUs; provided that (1) the CEO Discretionary Awards made in any single fiscal year shall not relate to more than an aggregate of a number of shares of the Company’s common stock specified by the Committee and (2) the CEO Discretionary Awards granted to any individual under this Delegated Award Authority in any fiscal year shall not relate to more than a specified value as determined by the Committee. Subject to the limits in the preceding sentence, the CEO shall determine the target value of each CEO Discretionary Award. The effective grant date of any CEO Discretionary Award shall be the third trading day following the first earnings release issued by the Company after the CEO’s approval of such CEO Discretionary Award. At each regularly scheduled meeting of the Committee, the Committee shall receive a report (for information and not for approval or ratification) of the CEO Discretionary Awards approved by the CEO pursuant to this Delegated Award Authority since the preceding meeting of the Committee.

Exhibit 10.2

FuelCell Energy, Inc.

2018 OMNIBuS INCENTIVE PLAN

PERFORMANCE SHARE Award
(RELATIVE TSR)

Dear _________,

You have been granted an award (an “Award”) of performance shares of FuelCell Energy, Inc., a Delaware corporation (the “Company”), which are subject to the terms of the FuelCell Energy, Inc. 2018 Omnibus Incentive Plan (the “Plan”) and this Performance Share Award Agreement (this “Agreement”). Capitalized terms used but not defined in this Agreement shall have the meanings set forth in the Plan.


Grant Date:		______________, 20__
Number of Performance Shares:		Target Performance Shares: ________ Maximum Performance Shares: 200% of Target
Performance Period		May 8, 2020 through October 31, 2022


Performance Vesting for Performance Shares:		The performance metric that will determine the number of Performance Shares you earn will be the Company’s total shareholder return (“TSR”) over the performance period specified above relative to the Russell 2000 index composite TSR (“Relative TSR”). The Company’s TSR is calculated by subtracting Beginnning Stock Price from Ending Stock Price (as each term is defined below) for the Performance Period, adding any dividends during the period, and then dividing the result by the Company’s Beginning Stock Price. “Beginning Stock Price” shall mean the average closing price of the Company’s common stock over the 20 consecutive trading days immediately prior to May 8, 2020. “Ending Stock Price” shall mean the average closing price of the Company’s common stock over the 20 consecutive trading days ending on October 31, 2022. The number of Performance Shares earned will be as follows: •100% plus or minus 0.5x the difference between the Company’s TSR and the Russell 2000 index composite TSR •Payout is capped at 200% of the target number of Performance Shares •Payout is capped at 100% of the target number of Performance Shares if the Company’s absolute TSR over the Performance Period is negative Any Performance Shares that are earned based on performance will be earned on the date that the Administrator certifies the achievement of the applicable level of Relative TSR. Any Performance Shares that are not earned on such date shall be forfeited. Performance Shares earned on the basis of Relative TSR Performance remain subject to vesting based on continued service until the third anniversary of the Grant Date. If your employment or service with the Company and its Affiliates terminates (voluntarily or involuntarily) before the third anniversary of the Grant Date, all Performance Shares will be immediately and automatically forfeited.
Change of Control:		Upon a Change of Control, your Performance Shares will be treated in accordance with Section 19 of the Plan.
Settlement:		As soon as practicable after the third anniversary of the Grant Date (but no later than two-and-one-half months from the end of the fiscal year in which the Performance Shares vest), the Company will settle any earned Performance Shares by electing either to (i) issue in your name certificate(s) or make an appropriate book entry for a number of Shares equal to the number of Performance Shares that have vested or (ii) deliver an amount of cash equal to the Fair Market Value, determined as of the vesting date, of a number of Shares equal to the number of Performance Shares that have vested.
Rights as Stockholder:		You will not be deemed for any purposes to be a stockholder of the Company with respect to any of the Performance Shares unless and until Shares are issued to you upon settlement of this Award.
Restrictions on Transferability:		Except as provided in the Plan, you may not sell, transfer, assign, pledge, or otherwise alienate this Award, and any attempt to do so shall be null and void.

Tax Withholding:

You understand that you (and not the Company) shall be responsible for your own federal, state, local, or foreign tax liability and any of your other tax consequences that may arise as a result of this Award, and that you should rely solely on the determinations of your tax advisors or your own determinations, and not on any statements or representations by the Company or any of its agents with regard to all tax matters.

To the extent that the receipt, vesting or settlement of the Performance Shares, or disposition of any Shares acquired under your Award results in income to you for national, federal, state, local, foreign, or other tax purposes, the Company may deduct (or require an Affiliate to deduct) from any payments of any kind otherwise due to you to satisfy such tax or other withholding obligations. Alternatively, the Company or its Affiliate may require you to pay to the Company or its Affiliate, in cash, promptly on demand, or make other arrangements satisfactory to the Company or its Affiliate regarding the payment of the withholding amount.

At the Administrator’s discretion, you may be able to satisfy all or a portion of the withholding obligations arising in connection with this Award by electing to (i) have the Company or its Affiliate withhold Shares otherwise due to you upon settlement of this Award, (ii) tender back Shares received upon settlement of this Award, or (iii) deliver other previously owned Shares, in each case having a Fair Market Value equal to the amount to be withheld; provided that the amount to be withheld may not exceed the maximum statutory tax rate associated with the transaction. If an election is provided, the election must be made on or before the date as of which the amount of tax to be withheld is determined and otherwise as the Administrator requires. In any case, the Company and its Affiliates may defer making payment or delivery under this Award until such withholding obligations are paid.

Electronic Communications:

The Company may, in its sole discretion, decide to deliver any documents related to current or future participation in the Plan by electronic means. By accepting this Award, you hereby consent to receive such documents by electronic delivery, and agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third-party designated by the Company. You also agree that all on-line acknowledgements shall have the same force and effect as a written signature.

Miscellaneous:

•This Award is expressly subject to all the terms and conditions contained in this Agreement and the Plan, and the terms of the Plan are incorporated herein by reference.

•As a condition of the granting of this Award, you agree, for yourself and your legal representatives or guardians, that this Award shall be interpreted by the Administrator and that any interpretation by the Administrator of the terms of this Agreement or the Plan and any determination made by the Administrator pursuant to this Award shall be final, binding and conclusive.

•Generally, this Agreement can only be modified or amended by a writing signed by both you and the Company. However, the Administrator may modify or amend this Award in certain circumstances without your consent as permitted by the Plan, and the Administrator may adjust, in its sole discretion, the method of calculating Relative TSR.

•The grant of this Award does not provide you with any right to continued employment or service with the Company or any Affiliate.

•The Performance Shares constitute a mere promise by the Company to make specified payments in the future if such benefits come due under the Award. You will have the status of

a general creditor of the Company with respect to any vested Award.

•By accepting this Award, you agree not to sell any Shares acquired under this Award at a time when applicable laws, Company policies, or an agreement between the Company and its underwriters prohibit a sale.

•This Award, and any compensation or benefits that you receive as a result of this Award, shall be subject to any clawback or recoupment policy that the Company may adopt from time to time.

The Company has caused this Agreement to be executed by one of its authorized officers and is effective as of the Grant Date.

FuelCell Energy, Inc.

______________________

[Name]

[Title]

Exhibit 10.3

FuelCell Energy, Inc.

2018 OMNIBuS INCENTIVE PLAN

PERFORMANCE SHARE Award
(ABSOlUTE TSR)

Dear _________,


Grant Date:		______________, 20__
Number of Performance Shares:		Target Performance Shares: ________ Maximum Performance Shares: 200% of Target
Performance Period		May 8, 2020 through October 31, 2022


Performance Vesting for Performance Shares:		The performance metric that will determine the number of Performance Shares you earn will be the closing price of the Company’s common stock during the Performance Period specified above. The number of Performance Shares earned will be as follows: •50% increase in the price of the Company’s common stock over the average closing price of the Company’s common stock over the 20 consecutive trading days ending on May 8, 2020 earns 50% of the target number of Performance Shares •100% increase in the price of the Company’s common stock over the average closing price of the Company’s common stock over the 20 consecutive trading days ending on May 8, 2020 earns 100% of the target number of Performance Shares •150% increase in the price of the Company’s common stock over the average closing price of the Company’s common stock over the 20 consecutive trading days ending on May 8, 2020 earns 200% of the target number of Performance Shares For a closing price to be deemed achieved, it must be met for 20 consecutive trading days during the Performance Period specified above. The closing price may be achieved based on any 20 consecutive trading day period during the Performance Period specified above. Any Performance Shares that are earned based on performance will be earned on the date that the Administrator certifies the achievement of the applicable closing price. Any Performance Shares that are not earned by the last day of the Performance Period specified above shall be forfeited as of such day. Performance Shares earned based on the closing price of the Company’s common stock remain subject to vesting based on continued service until the third anniversary of the Grant Date. If your employment or service with the Company and its Affiliates terminates (voluntarily or involuntarily) before the third anniversary of the Grant Date, all Performance Shares will be immediately and automatically forfeited.
Change of Control:		Upon a Change of Control, your Performance Shares will be treated in accordance with Section 19 of the Plan.
Settlement:		As soon as practicable after the third anniversary of the Grant Date (but no later than two-and-one-half months from the end of the fiscal year in which the Performance Shares vest), the Company will settle any earned Performance Shares by electing either to (i) issue in your name certificate(s) or make an appropriate book entry for a number of Shares equal to the number of Performance Shares that have vested or (ii) deliver an amount of cash equal to the Fair Market Value, determined as of the vesting date, of a number of Shares equal to the number of Performance Shares that have vested.
Rights as Stockholder:		You will not be deemed for any purposes to be a stockholder of the Company with respect to any of the Performance Shares unless and until Shares are issued to you upon settlement of this Award.
Restrictions on Transferability:		Except as provided in the Plan, you may not sell, transfer, assign, pledge, or otherwise alienate this Award, and any attempt to do so shall be null and void.

Tax Withholding:

Shares otherwise due to you upon settlement of this Award, (ii) tender back Shares received upon settlement of this Award, or (iii) deliver other previously owned Shares, in each case having a Fair Market Value equal to the amount to be withheld; provided that the amount to be withheld may not exceed the maximum statutory tax rate associated with the transaction. If an election is provided, the election must be made on or before the date as of which the amount of tax to be withheld is determined and otherwise as the Administrator requires. In any case, the Company and its Affiliates may defer making payment or delivery under this Award until such withholding obligations are paid.

Electronic Communications:

Miscellaneous:

•This Award is expressly subject to all the terms and conditions contained in this Agreement and the Plan, and the terms of the Plan are incorporated herein by reference.

•The grant of this Award does not provide you with any right to continued employment or service with the Company or any Affiliate.

•The Performance Shares constitute a mere promise by the Company to make specified payments in the future if such benefits come due under the Award. You will have the status of a general creditor of the Company with respect to any vested Award.

•This Award, and any compensation or benefits that you receive as a result of this Award, shall be subject to any clawback or recoupment policy that the Company may adopt from time to time.

The Company has caused this Agreement to be executed by one of its authorized officers and is effective as of the Grant Date.

FuelCell Energy, Inc.

______________________

[Name]

[Title]