TECOGEN INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
Date: Thursday, June 23, 2016 8, 2023
Time: 1:00 pm (local time)
Place: 45 First Avenue, Waltham, MA 02451
TO THE STOCKHOLDERS OF TECOGEN INC.:
NOTICE IS HEREBY GIVEN that the 20162023 Annual Meeting of Stockholders of Tecogen Inc., a Delaware corporation, or the ("Company," "Tecogen," "we," "our," "us"), will be held at the CompanyCompany's offices located at 45 First Avenue, Waltham, Massachusetts, 02451, on Thursday, June 23, 2016,8, 2023, at 1:3000 p.m., local time ("Annual Meeting") for the following purposes, as described in our Proxy Statement:
1.To elect seven directors to the Board of Directors of the Company to hold office until the 2024 annual meeting or until their successors are duly elected and qualified.
2.To ratify the appointment of Wolf & Company, P.C. as the Company's independent registered public accounting firm.
3.To transact any other business which may properly be brought before the Annual Meeting or any adjournment or postponement thereof.
All stockholders are cordially invited to attend the Annual Meeting of Stockholders, orMeeting. Attached to this notice is a Proxy Statement relating to the proposals to be considered at the Annual Meeting. Only stockholdersThe Board of record of the Company atDirectors has fixed the close of business on April 25, 2016 are21, 2023 (5:00 p.m., U.S. Eastern Time) as the record date, or the Record Date, for the determination of stockholders entitled to receive notice of and to vote at the Annual Meeting or at any adjournment or postponement thereof. A complete list of these stockholders will be open for the examination of any stockholder of record during ordinary business hours at the Company's principal executive offices located at 45 First Avenue, Waltham, Massachusetts, 02451 for a period of ten days prior to the Annual Meeting. The list will also be available for the examination of any stockholder present at the Annual Meeting.
If you are a holder of record on the Record Date and plan to attend the Annual Meeting in person, please bring photo identification. If your shares are held in the name of a broker, bank or other nominee, please bring with you photo identification and a letter from the broker or other nominee confirming your ownership as of the record date.Record Date. If you wish to vote your shares at the Annual Meeting, the broker, bank or other nominee must provide you with a proxy or power of attorney.
Your vote is important. Your prompt response will also help reduce proxy costs and will help you avoid receiving follow-up telephone calls or mailings. Please vote as soon as possible. Also,The proxy materials, including the Company has elected to take advantageProxy Statement, the Company's Annual Report, which includes our consolidated financial statements for the year ended December 31, 2022, and the proxy card or the notice of the Securities and Exchange Commission rules that allow the Company to furnishinternet availability of proxy materials, as applicable, are being distributed beginning on or about April 25, 2023. The proxy materials will also be available to you and other stockholders on the Internet. Websites throughout these proxy materials are provided for reference only.
Stockholders of record can vote their shares by using the Internet or the telephone. Instructions for using these convenient means of voting are provided on the proxy card or the notice of Internet availability of proxy materials. If you received your materials by mail, you may also vote by signing and dating the enclosed proxy card and returning it to us promptly in the envelope provided.
The Company currently intends to hold its Annual Meeting in person. However, the Company is sensitive to the public health and travel concerns its stockholders may have and recommendations and protocols that federal, state and local governments may impose in light of the evolving coronavirus (COVID-19) pandemic. As a result, in the event it is not possible or advisable to hold the Annual Meeting in person, the Company will announce alternative arrangements for the meeting as promptly as practicable, which may include holding the meeting at a different location or holding the meeting solely by remote communication such as by webcast or similar means. Please monitor the Company's News and Events website at https://ir.tecogen.com/news-events for updated information regarding the Annual Meeting. If you are planning on attending the Annual Meeting, the Company encourages you to check this website prior to the meeting if you plan to attend. As always, the Company encourages you to vote your shares prior to the Annual Meeting.
| By Order of the Board of Directors, | ||
| General Counsel & Secretary | ||
Waltham, Massachusetts
April 29, 201625, 2023
TABLE OF CONTENTS
| Page | ||||||||
| APPENDIX I : Proxy Card | # | |||||||
TECOGEN INC.
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
To be held on June 23, 20168, 2023
INFORMATION ABOUT THE ANNUAL MEETING AND VOTING
WHY DID YOU FURNISH ME WITH THIS PROXY STATEMENT?
This Proxy Statement isand accompanying Proxy Card are being furnished in connection with the solicitation of proxies by the Board of Directors of Tecogen Inc., a Delaware corporation, ("Tecogen," "Company," "we," "our," or the Company,"us") for the Annual Meeting of Stockholders, or the Annual Meeting, to be held on June 23, 20168, 2023 at 1:3000 p.m., local time, and at any adjournments or postponements of the Annual Meeting. This Proxy Statement summarizes the information you need to make an informed vote on the proposals to be considered at the Annual Meeting. However, you do not need to attend the Annual Meeting to vote your shares. Instead, you may simply complete, signaccess your proxy card and return avote via the Internet, at www.proxyvote.com or by telephone at 1-800-690-6903. However, if you received your proxy materials by mail, you may vote by completing, signing, dating and returning to us the enclosed proxy card.
WHY ARE YOU MAKING THESE MATERIALS AVAILABLE OVER THE INTERNET RATHER THAN MAILING THEM?
Under the "Notice and Access Rule" that the Securities and Exchange Commission, or the SEC, has adopted, we are furnishing proxy materials to our stockholders on the Internet rather than mailing printed copies of those materials to each stockholder. This will help us conserve natural resources and it will save postage, printing and processing costs. If you received the Notice of Internet Availability of Proxy Materials, or the Notice of Internet Availability, by mail, you will not receive a printed copy of our proxy materials unless you specifically request one. Instead, the Notice of Internet Availability will instruct you about how you may (1) access and review the Company's proxy materials on the Internet and (2) access your proxy card to vote on the Internet. We anticipate that we will mail the Notice of Internet Availability to our stockholders on or about May 13, 2016.April 25, 2023.
The Proxy Materialsproxy materials are available at https://materials.proxyvote.com/87876P. Enter the 12-digit control number located on the Notice of Internet Availability, proxy card or proxy card.voter instruction form.
HOW CAN I HAVE PRINTED COPIES OF THE PROXY MATERIALS MAILED TO ME?
Instructions for requesting a paper copy of the proxy materials are set forth on the Notice of Internet Availability.
WHAT PROPOSALS WILL BE ADDRESSED AT THE ANNUAL MEETING?
The following proposals will be addressed at the Annual Meeting:
1. The election |
2. The ratification of the appointment of Wolf & Company, P.C. as the Company's independent registered public accounting firm; and
3. Any other business asthat may properly come before the Annual Meeting or any adjournment or postponement of the Annual Meeting.Meeting so long as such business is properly brought.
WHO MAY VOTE ON THESE PROPOSALS?
Stockholders who owned shares of the Company’s voting stock at the close of business on April 25, 201621, 2023 or the Record Date, are entitled to notice of and to vote at the Annual Meeting on all matters properly brought before the Annual Meeting.
On the Record Date, the Company had 19,065,436there were 24,850,261 shares of issued and outstandingthe Company's common stock, $.001 par value $0.01 per share, or the Common Stock.Stock, issued and outstanding and entitled to vote. Our Common Stock will vote as a single class on all matters scheduled to be voted on at the Annual Meeting. There is no cumulative voting.
HOW MANY VOTES DO I HAVE?
Each share of Common Stock is entitled to one vote on each matter presented at the Annual Meeting.
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WHAT IS THE DIFFERENCE BETWEEN HOLDING SHARES AS A STOCKHOLDER OF RECORD AND AS A BENEFICIAL OWNER?
Stockholder of Record
If, on the Record Date, your shares were registered directly in your name with our transfer agent, VStock Transfer LLC, you are a “stockholder of record” who may vote at the Annual Meeting. As thea stockholder of record you have the right to direct the voting of your shares via the Internet, telephone, by returning a proxy card to us or by voting in person at the Annual Meeting. Whether or not you plan to attend the Annual Meeting, please vote via the Internet, telephone, or complete, sign, date, and signreturn a proxy card to ensure that your vote is counted.
Beneficial Owner
If, on the Record Date, your shares were held in an account at a brokerage firm or at a bank or other nominee holder, you are considered the beneficial owner of shares held “in street name.” Your broker or nominee is considered the stockholder of record for purposes of voting at the Annual Meeting. As the beneficial owner, you have the right to instruct your broker, bank, or nominee how to vote your shares by using any voting instruction card supplied by them or by following their instructions for voting by telephone, online, or in person. However, since you are not the stockholder of record, you may not vote these shares in person at the Annual Meeting unless you receive a valid proxy from your brokerage firm, bank or other nominee holder. To obtain a valid proxy, you must make a special request of your brokerage firm, bank or other nominee holder.
HOW DOES THE BOARD RECOMMEND THAT I VOTE?
Our Board unanimously recommends that stockholders vote "FOR" all sixseven nominees for director, and "FOR" the ratification of the appointment of Wolf & Company, P.C. as our independent auditors, and "FOR"registered public accountants. None of our directors has any substantial interest in any matter to be acted upon, with the authorization to adjournexception of the Annual Meeting to a later date or dates if there are insufficient votes present in person or represented by proxydirectors nominated for election at the Annual Meeting, to approve the proposals.their election under proposal No. 1
WHAT IS THE QUORUM REQUIREMENT?
A quorum of stockholders is necessary to hold a valid meeting. A quorum will be present if at least a majority of theour issued and outstanding shares are represented by stockholders present at the Annual Meeting or represented by proxy. On the Record Date, there were 19,065,43624,850,261 shares outstanding and entitled to vote.vote at the meeting. Thus, 9,532,71912,425,132 shares must be represented by stockholders present at the meeting or by proxy to have a quorum. Your shares will be counted towards the quorum only if you submit a valid proxy (or one is submitted on your behalf by your broker, bank or other nominee) or if you vote in person at the Annual Meeting. Abstentions and broker non-votes will be counted towards the quorum requirement. A broker non-vote occurs when a broker holding shares for a beneficial owner votes on one proposal but does not vote on another proposal because, in respect of such other proposal, the broker does not have discretionary voting power and has not received voting instructions from the beneficial owner. If there is no quorum, the chairman of the meeting or a majority of the votes of stockholders present or represented at the meeting may adjourn the meeting to another date.
WHY WOULD THE ANNUAL MEETING BE ADJOURNED?
The Annual Meeting may be adjourned if a quorum is not present or to allow time for further solicitation of proxies in the event there are insufficient votes present in person or represented by proxy to approve the proposals. For purposes of determining whether the stockholders have approved matters other than the election of directors, abstentions are treated as shares present or represented and voting, so abstaining has the same effect as a negative vote. Shares held by brokers who do not have discretionary authority to vote on a particular matter and who have not received voting instructions from their customers are not counted or deemed to be present or represented for the purpose of determining whether stockholders have approved that matter, but they are counted as present for the purpose of determining the existence of a quorum at the Annual Meeting.
HOW DO I VOTE BY PROXY?
(2)By telephone at 1-800-690-6903; or
(3)By completing and submitting a properly signed and dated paper proxy card.
If you are a stockholder of record, returning the proxy card will not affect your right to attend the Annual Meeting and vote in person as described elsewhere herein. If you properly fill in your proxy card and send it to us in time to vote, your proxy (one of the individuals named on your proxy card) will vote your shares as you have directed.
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If you sign the proxy card but do not make specific choices, your proxy will vote your shares as recommended by the Board of Directors as follows:
1.FOR the election of each of our Board's nominees for director; 2.FOR the ratification of the appointment of Wolf & Company, P.C. as the Company's independent registered public accounting firm; |
If any other matters are presented, your proxy will vote in accordance with his or her best judgment. At the time this Proxy Statement was finalized, we knew of no matters that needed to be acted on at the Annual Meeting other than those discussed in this Proxy Statement.
If you are a beneficial owner, you must vote your shares in the manner prescribed by your broker, bank or other nominee. You will receive a voting instruction card (not a proxy card) to use in directing the broker, bank, or other nominee how to vote your shares. You may also have the option to vote your shares via the Internet.
HOW DO I VOTE IN PERSON?
If you are a stockholder of record (i.e., you own the shares directly in your name) and plan to attend the Annual Meeting, you may attend and vote in person on June 23, 2016,8, 2023, or at a later date if the Annual Meeting is adjourned or postponed to a later date, as long as you present valid proof of identification at the Annual Meeting. We will give you a ballot when you arrive. However, if your shares are held in the name of your broker, bank or other nominee, in addition to identification, you must bring proof of beneficial ownership in order to attend the Annual Meeting, which generally can be obtained from the record holder. In that event, you must also obtain a proxy or a power of attorney executed by the broker, bank or other nominee that owns the shares of record for your benefit and authorizing you to vote the shares at the Annual Meeting.
MAY I REVOKECHANGE MY PROXY?VOTE?
If you hold your shares through a broker, bank or other nominee in "street name", you should contact such person prior to the time such voting instructions are exercised.
WHAT DOES IT MEAN IF I RECEIVE MORE THAN ONE PROXY CARD OR VOTING INSTRUCTION CARD?
If you receive more than one proxy card or voting instruction card, it means that you have multiple accounts with brokers, banks or other nominees and/or our transfer agent. Please sign and deliver, or otherwise vote, each proxy card and voting instruction card that you receive. We recommend that you contact your nominee and/or our transfer agent, as appropriate, to consolidate as many accounts as possible under the same name and address. Our transfer agent is exercised. You may revoke your proxy in three ways:Vstock Transfer, LLC, 18 Lafayette Place, Woodmere, NY 11598: Telephone: 212-828-8436.
WHAT VOTE IS REQUIRED TO APPROVE EACH PROPOSAL?
Proposal 1: Election of Directors. The election of directors shall be determined by a plurality of the votes cast by the stockholders. Therefore, a nominee who receives a plurality means he has received the highest(the nominee who receives a higher number of votes “for” his or her election than any other nominee for the same director's seatseat) will be elected.
Proposal 2: Ratification of independent registered public accounting firm. The approval of the ratification of the appointment of our independent registered public accounting firm requires the affirmative vote of the holders of a majority in voting power of the votes cast by the holders of all of the shares of stock present or represented at the meeting and voting affirmatively or negativelyAnnual Meeting entitled to vote on suchthe matter.
HOW ARE VOTES COUNTED?
Proposal 1: You may either vote “FOR” or “WITHHOLD” authority to vote for each of the nominees for election to the Board of Directors. Shares present at the meeting or represented by proxy where the shareholderstockholder does not vote for a nominee or properly withholds authority to vote for such nominee and broker non-votes will not be counted toward"For" or "Against" such nominee's achievement of a plurality.
Proposal 2: You may vote “FOR,” “AGAINST” or “ABSTAIN” on the ratification of Wolf & Company, P.C. If you abstain from voting on the proposal to ratify the appointment of Wolf & Company, P.C., your vote will have no effect on the outcome of the vote on the proposal. Brokers, bankers and other nominees have discretionary voting power on this routine matter and, accordingly, broker non-votes will have no effect on the vote for this proposal.
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ARE THERE ANY DISSENTERS' RIGHTS OF APPRAISAL?
Our Board is not proposing any action for which the laws of the State of Delaware, the Company’s Certificate of Incorporation or the Company's Bylawsby-laws provide a right of a stockholder to dissent and obtain appraisal of or payment for such stockholder's shares.
WHO BEARS THE COST OF SOLICITING PROXIES?
WHERE ARE THE COMPANY'S PRINCIPAL EXECUTIVE OFFICES?
The Company’s principal executive offices are located at 45 First Avenue, Waltham, Massachusetts, 02451, and the Company's telephone number is (781) 466-6400.
HOW CAN I OBTAIN ADDITIONAL INFORMATION ABOUT THE COMPANY?
The Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015,2022, or the Annual Report, has been madeis available on the Internet to all stockholders entitled to vote atalong with this Proxy Statement on the Annual Meeting and who received the Notice of Internet Availability. Additional copies will be furnished without charge to stockholders upon written request.SEC's EDGAR website. Exhibits to the Annual Report will be provided upon written request and payment of an appropriate fee. All written requests should be directed to the Secretary of the Company c/o Tecogen Inc., 45 First Avenue, Waltham, Massachusetts 02451. The Company is subject to the informational requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act.
Our website address is included several times in this Proxy Statementthese proxy materials as a textual reference only and the information in the website is not incorporated by reference into this Proxy Statement.these proxy materials.
INFORMATION ABOUT DIRECTORS AND EXECUTIVE OFFICERS
The following table lists the current members of our Board, and our executive officers. The address for our directors and executive officers isis: c/o Tecogen Inc., 45 First Avenue, Waltham, Massachusetts 02451. The ages of the individuals are provided as of April 25, 2023:
| Name | Age | Position(s) | (1) | (2) | (3) | ||||||||||||
| Directors | |||||||||||||||||
| Angelina M. Galiteva | 56 | Chairperson of the Board and Director | x | x | |||||||||||||
| John N. Hatsopoulos | 89 | Lead Director | |||||||||||||||
| Ahmed F. Ghoniem | 71 | Director | x | x | |||||||||||||
| John M. Albertine | 78 | Director | x | ||||||||||||||
| Earl L. Lewis, III | 79 | Director | x | ||||||||||||||
| Fred Holubow | 84 | Director | x | ||||||||||||||
| Abinand Rangesh | 38 | Director | |||||||||||||||
| (1) Member of Audit Committee | |||||||||||||||||
| (2) Member of Compensation Committee | |||||||||||||||||
| (3) Member of the Nominating and Governance Committee | |||||||||||||||||
| Named Executive Officers | |||||||||||||||||
| Abinand Rangesh | 38 | Chief Executive and Financial Officer (Principal Executive and Financial Officer) and Treasurer | |||||||||||||||
| Robert A. Panora | 68 | President and Chief Operating Officer | |||||||||||||||
| John K. Whiting, IV | 62 | General Counsel and Secretary | |||||||||||||||
| Name | Age | Position(s) | (1) | (2) | (3) |
| Angelina M. Galiteva | 49 | Chairperson of the Board and Director | x | x | |
| John N. Hatsopoulos | 82 | Co-Chief Executive Officer and Director | |||
| Benjamin M. Locke | 48 | Co-Chief Executive Officer | |||
| Robert A. Panora | 61 | Chief Operating Officer and President | |||
| David A. Garrison | 48 | Chief Financial Officer, Treasurer and Secretary | |||
| Joseph E. Aoun | 63 | Director | x | x | |
| Ahmed F. Ghoniem | 64 | Director | x | x | |
| Earl R. Lewis | 72 | Director | x | ||
| Charles T. Maxwell | 84 | Director | x | x | |
| (1) Member of Audit Committee | |||||
| (2) Member of Compensation Committee | |||||
| (3) Member of the Nominating and Governance Committee | |||||
Angelina M. Galiteva, age 49, has been our Chairperson of the Boardboard of directors since 2005. SheMs. Galiteva is founder and Chair of the founder ofBoard for the Renewables 100 Policy Institute. SheInstitute, a non-profit entity dedicated to the global advancements of renewable energy solutions since 2008. Since 2003 she has also serves as thebeen Chairperson forat the World Council for Renewable Energy. Both organizations are dedicatedEnergy (WCRE), which focuses on the development of legislative and policy initiatives to facilitate the successful deploymentintroduction and growth of renewable energy technologies andtechnologies. Since 2011, she has served on the policies that support the transition to a carbon free grid on a global scale.
Strategy Consulting since 2004. Ms. Galiteva holds a Master’s degreeM.S in Environmental and Energy Law, and a law degreeJ.D. from Pace University School of Law, and a bachelor’s degreeB.S. from Sofia University in Bulgaria. Ms. Galiteva is currently serving as Chairperson and as a Tecogen director and serves as Chair of our Audit Committee and member of our Compensation Committee.
Our Boardboard has determined that, based on Ms. Galiteva’s prior experience in the energy field, qualifies hershe is qualified to be a member of the Board in light of the Company’s business and structure.board.
John N. Hatsopoulos, age 82, has been the Chief Executive Officer of the Company since the organization of the Company in 2000, and has shared the role as Co-Chief Executive Officer since the fall of 2014. He has been a member of the Boardour board of directors since its founding.founding in 2000 (other than the period between June 6, 2018 and February 1, 2019) and was our Chief Executive Officer or Co-Chief Executive Officer until March 29, 2018. He has also beenwas the Chief Executive officer or Co-Chief Executive Officer of American DG Energy Inc., (NYSE MKT: ADGE), or American DG Energy, a publicly traded companyADGE, until ADGE merged with us in May of 2017, or the On-Site Utility business since 2000,ADGE Merger, and was on the board of directors of ADGE until March 29, 2018. Mr. Hatsopoulos was the Chairman of EuroSite Power Inc., or Eurosite Power, a subsidiaryformer affiliate of American DG Energy Inc. since 2009.ours, from 2009 until 2016. Mr. Hatsopoulos iswas a co-founder of Thermo Electron Corporation, which is now Thermo Fisher Scientific (NYSE: TMO), and isScientific. He was formerly the retired President and Vice Chairman of the Board of Directors of that company. He is a member of the Board of Directors of Ilios Inc., and is a former Member of the Corporation of Northeastern University. The Company, American DG Energy, and EuroSite Power are affiliated companies by virtue of common ownership. Mr. HatsopoulosHe graduated from Athens College in Greece and holds a bachelor’s degreeB.S. in history and mathematics from Northeastern University, as well as honorary doctorates in business administration from Boston College and Northeastern University.
On February 1, 2019, Mr. Hatsopoulos iswas reappointed by the Company’s Co-Chief Executive Officerboard as a director, and is also the Co-Chief Executive Officer of American DG Energy and the Chairman of Eurosite Power. On average, Mr. Hatsopoulos spends approximately 50% of his business time on the affairs of the Company; however such amount varies widely depending on the needs of the business and is expected to increasecurrently serving as the business of the Company develops.a Tecogen director.
Our Boardboard has determined that, based on Mr. Hatsopoulos’ priorHatsopoulos extensive leadership experience as co-founder, president and Chief Financial Officer ofin senior positions at Thermo Electron Corporation whereand education, he demonstrated leadership capability and gained extensive expertise involving complex financial matters, and his extensive knowledge of complex financial and operational issues qualify himis qualified to be a member of our Board in light of the Company’s business and structure.
board.
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Ahmed F. Ghoniem , age 48, has been a member of our Co-Chief Executive Officerboard of directors since 2014. Mr. Locke joined2008. Dr. Ghoniem is the Company in June, 2013 asRonald C. Crane Professor of Mechanical Engineering at MIT. He is also the Director of Corporate Strategythe Center for 21st Century Energy, and the head of Energy Science and Engineering at MIT, where he plays a leadership role in many energy-related activities, initiatives and programs. He joined MIT as an Assistant Professor in 1983. He is an associate fellow of the American Institute of Aeronautics and Astronautics, and Fellow of American Society of Mechanical Engineers, and was promoted to General Manager prior to his appointment as Co-CEO. In Octobera recipient of 2014, Mr. Locke began serving as Co-Chief Executive Officer of American DG Energy. He splits his time between the two companies. Previously, Mr. Locke was the Director of Business Development and Government Affairs at Metabolix (NASDAQ:MBLX),KAUST Investigator Award. Dr. Ghoniem holds a bioplastics technology development and commercialization company. In that role, he was responsible for developing and executing plans for partnerships, joint ventures, acquisitions, and other strategic arrangements for commercializing profitable clean energy technologies. Prior to joining MetabolixPh.D. in 2001, Mr. Locke was Vice President of Research at Innovative Imaging Systems, or IISI, a high-technology R&D company. At IISI, he drove the development and implementation of growth strategies for the funding of specialty electronic systems for the United States Government. Mr. Locke has a B.S. in PhysicsMechanical Engineering from the University of Massachusetts, anCalifornia, Berkeley, and a M.S. and B.S. in ElectricalMechanical Engineering from TuftsCairo University. Dr. Ghoniem is currently serving as a Tecogen director, and serves as the Chair of our Nominating and Governance Committee and a member of our Compensation Committee.
Our board has determined that, based on Dr. Ghoniem’s prior experience as a Professor of Mechanical Engineering at MIT and his prior experience in the energy sector, he is qualified to be a member of our board.
Earl R. Lewis III served as Chairman of the board and as Chief Executive Officer and President of FLIR Systems from 2000 through May 2013, and since May 2013 as Chairman of the Board and as a senior consultant to FLIR Systems.Mr. Lewis also served as Chairman of the Board of Harvard Bio Science from 2013 through June 2018, as CEO and President of Thermo Instrument Systems from 1998 to 2000, as President in 1997, and as COO in 1996.Mr. Lewis also served as CEO and President of Thermo Optek Corporation from 1994 to 1996, as President of Thermo Jarrell Ash Corporation from 1988 to 1994, and in senior operations and manufacturing roles at Thermo Jarrell Ash since 1984 and at other companies in previous years.Mr. Lewis holds a B.S. from Clarkson College of Technology.Mr. Lewis is currently serving as a Tecogen director and serves as the Chair of our Compensation Committee.
Our board has determined that, based on Mr. Lewis' extensive leadership experience in senior positions, he is qualified to be a member of our board.
John M. Albertine was appointed to our board on December 7, 2022. Dr. Albertine has served on the board of numerous public companies including Fruit of the Loom, Thermo Electron Corporation (now Thermo Fisher Scientific Corporation), American Precision Industries, Intersections Inc, DynaTech Corporation and Kadant Inc. He has also served as the Vice Chairman of the Fruit of the Loom Company and has served on two Presidential Commissions under President Reagan. Presently, Dr. Albertine is the CEO of Albertine Enterprises Inc. a public policy and advocacy firm based in Washington DC. He is also the Managing Partner at JJ&B an investment banking firm. Dr. Albertine has previously served as the Chair of the Economics Department at the Mary Washington College of the University of Virginia and as an M.B.A.Adjunct Professor at the US Marine Corps, Command and Staff College at Quantico. Dr. Albertine has a Ph.D. in Corporate FinanceEconomics from Boston University.the University of Virginia and Doctor of Humanities (honorary) from King’s College, PA.
Our board has determined that, based on Dr. Albertine's significant experience as a board member with several public companies and education, he is qualified to be a member of our board.
Abinand Rangesh has been with the Company since 2016 and has held roles in various divisions including sales, business development and most recently Chief Financial Officer and Treasurer. Dr. Rangesh was appointed as our Chief Executive Officer on January 30, 2023 and has served, and continues to serve as our Chief Financial Officer (Principal Financial Officer) and Treasurer since June 14, 2021. Prior to joining Tecogen, he was an executive in renewable energy and software startups. His work as CTO at LumiSolair earned the company the 2013 EPA award. In addition, Dr. Rangesh has multiple design patents and has published multiple scientific papers in peer reviewed journals. Dr. Rangesh earned both his Ph.D. and undergraduate degrees in engineering from the University of Cambridge, United Kingdom. Dr. Rangesh is a citizen of the United States and the United Kingdom. Dr. Rangesh was appointed by our board in June 2021 to serve as a director and is currently serving as a Tecogen director.
Our board has determined that, based on Dr. Rangesh's prior experience and education, he is qualified to be a member of our board.
Fred Holubow has been our director since June 6, 2020. He served as a director of ANI Pharmaceuticals, Inc. from 1999 through May 2018 where he served on the Board's Audit and Finance Committee. Mr. Holubow is, and since 1984 has been a General Partner of Starbow Partners, an investor in early stage healthcare ventures. In addition, Mr. Holubow serves as a Principal of Petard Risk Analysis, a position he has held since January 2012. From 2001 to December 2011 Mr. Holubow served as a Managing Director of William Harris Investors, Inc., a registered investment advisory firm. From 1982 to 2001 Mr. Holubow served as Vice President of Pegasus Associates, a registered investment advisory firm he co-founded. He specializes in analyzing and investing in pharmaceutical and biotechnology companies. Mr. Holubow also previously served on the board of directors of the following public companies: Micrus Endovascular Corporation, ThermoRetec Corporation, Savient Pharmaceuticals, Inc. (formerly Bio-Technology General Corp.), Gynex Pharmaceuticals, Inc., and Unimed Pharmaceuticals, Inc. Mr. Holubow is currently serving as a Tecogen director and serves as the member of our Audit Committee.
Our board has determined that, based on Mr. Holubow’s significant experience on boards of directors (including audit committees) of public companies, his experience with investment advisors and his relationships in the investment community,
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and his experience with investment analysis and expertise relating to financial and accounting matters, he is qualified to be a member of the board.
There are no arrangements or understandings between any of our directors or executive officers and any other individuals regarding his or her selection as a director. There are no family relationships between any current executive officer, director, or director nominee.
There are no material proceedings to which any of our directors, officers or affiliates, any owner of record or beneficially of more than five percent of any class of our voting securities, or any associate of any such director, officer, affiliate or security holder is a party adverse to us or any of our subsidiaries or has a material interest adverse to us or any of our subsidiaries.
Biographical Information Regarding Our Named Executive Officers
Abinand Rangesh was appointed as our Chief Executive Officer on January 30, 2023, having previously served as our Chief Financial Officer since June 16, 2021. For more information regarding Dr. Rangesh, please see his biographical information under "Directors," above.
Robert A. Panora, age 61, has been our Chief Operating Officer and President since the organization of the CompanyTecogen in 2000 and the Chief Operating Officer of Ilios since its inception in 2009.2000. In August of 2015, Mr. Panora began serving as Director of Operations of American DG Energy. He splits his time betweenEnergy and continued to serve as Director of Operations until the two companies.completion of the ADGE Merger. On March 29, 2018, Mr. Panora was appointed as the sole director of ADGE. Before this role, since 1990, he had been General Manager of the Company’s Product Group while a division of Thermo Electron Corporation since 1990, and Manager of Product Development, Engineering Manager, and Operations Manager since 1984. Over his 31-year tenure with the CompanyTecogen and its predecessors, Mr. Panora has been responsible for sales and marketing, engineering, service, and manufacturing. Mr. Panora contributed to the development of Tecogen’s first product, the CM-60 cogeneration system,product, and was Program Manager for the cogeneration and chiller projects that followed. Mr. Panora has had considerable influence on many aspects of the business, from building the employee team, to conceptualizing product designs and authoring many of the original business documents, sales tools, and product literature pieces. Mr. Panora has a bachelor’sB.S. and master’s degreesM.S. in Chemical Engineering from Tufts University.
Each executive officer is elected or appointed by, and serves at the discretion of, our Board. The electedboard. Our executive officers of the Company will hold office until their successors are duly elected and qualified,appointed, or until their earlier resignation or removal.
The board maintains an audit committee, compensation committee, and nominating and corporate governance committee. We may also establish special or other committees from time to time to consider matters at the request of the board. The current members of such committees are set forth in the table set forth above.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table shows,sets forth, as of April 21, 2023, certain information with respect to the bestbeneficial ownership of our knowledge, all persons we knowTecogen's outstanding shares of common stock by (1) each person (including any “group” as set forth in Section 13(d)(3) of the Securities Exchange Act of 1934 ("Exchange Act") known by us to be the beneficial ownersowner of more than five percent or more(5%) of the voting securitiesany class of the Company as of the Record Date.
| Name and Address of Beneficial Owner | Common Stock Beneficially Owned(1) | Percent of Class(1) | |||
John N. Hatsopoulos (2) | 3,846,165 | 20.2% | |||
George N. Hatsopoulos (3) | 3,605,541 | 18.9% | |||
Michaelson Capital Special Finance Fund LP(4) | 1,197,536 | 6.3% | |||
Tecogen's common stock, (2) |
Name and address of beneficial owner (1) | Amount (2) | Percent of Class | ||||||||||||
| Holders of Common Stock of 5% or More | ||||||||||||||
Ann Marie Pacheco, as Trustee (3) | 3,699,624 | 14.89 | % | |||||||||||
Daphne Hatsopoulos (4) | 2,740,065 | 11.03 | % | |||||||||||
| Joseph Comeau, as Trustee (5) | 2,260,855 | 9.10 | % | |||||||||||
Tryfon Natsis and Despina Natsis(6) | 1,616,673 | 6.51 | % | |||||||||||
| 10,317,217 | 41.53 | % | ||||||||||||
| Directors and Named Executive Officers: | ||||||||||||||
Benjamin M. Locke (7) | 592,718 | 2.3 | % | |||||||||||
Earl R Lewis (8) | 543,183 | 2.2 | % | |||||||||||
John N. Hatsopoulos (9) | 458,255 | 1.8 | % | |||||||||||
John K. Whiting, IV (10) | 198,136 | *% | ||||||||||||
Robert A. Panora (11) | 112,723 | *% | ||||||||||||
Angelina M. Galiteva (12) | 110,000 | *% | ||||||||||||
Abinand Rangesh (13) | 102,800 | *% | ||||||||||||
Ahmed F. Ghoniem (14) | 72,723 | *% | ||||||||||||
Fred Holubow (15) | 60,000 | *% | ||||||||||||
John M. Albertine (16) | — | *% | ||||||||||||
| All Directors and Named Executive Officers as a group (10 persons) | 2,250,538 | 8.6 | % | |||||||||||
* Represents less than 1%
(1)Except as set forth below, the Record Date.address of the individual or entity listed in the table above is: c/o Tecogen Inc., 45 First Avenue, Waltham, Massachusetts, 02451.
(2)Unless otherwise noted in these footnotes, beneficial ownership is determined in accordance with Rule 13d-3 under the Exchange Act and is generally based on voting powers and/or investment powers with respect to securities. Unless otherwise noted, all shares of common stock listed above are owned of record by each individual or entity named as beneficial owner and such individual or entity has sole voting and dispositive power with respect to the shares of common stock owned by each of them. Such person or entity's percentage of ownership is determined by assuming that any options or convertible securities held by such person or entity which are exercisable within 60 days from the date hereof have been exercised or converted as the case may be.
(3)Includes: (a) 1,620,664 shares of common stock held for the benefit of Nia M. Hatsopoulos pursuant to The John N. Hatsopoulos 1989 Family Trust of which Mrs. Ann Marie Pacheco is the sole trustee, and (b) 2,078,960 shares of common stock held by the Nia M. Hatsopoulos Jephson 2011 Irrevocable Trust, of which Ms Pacheco is the sole trustee. The address of the holder is 45 First Ave., Waltham, MA 02451. Mrs. Pacheco provides administrative services for Mr. Hatsopoulos. Mr. Hatsopoulos disclaims beneficial ownership of all shares held by the trusts.
(4)Includes: (a) 150,440 shares of common stock held directly by Mrs. Daphne Hatsopoulos, (b) 1,812,468 shares of held by the George Hatsopoulos Marital Trust, of which Mrs. Hatsopoulos is a trustee, (c) 320,179 shares of common stock held by the 1994 Hatsopoulos family trust for the benefit of Nicolas Hatsopoulos, of which Mrs. Hatsopoulos is a trustee, and (d) 456,978 shares held by the 1994 Hatsopoulos Family Trust for the benefit of Marina Hatsopoulos, of which Mrs. Hatsopoulos is a trustee.
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Name and address of beneficial owner(1) | Amount and Nature of Beneficial Ownership(2) | Percent of Class(3) | ||||
John N. Hatsopoulos (4) | 3,846,165 | 20.2 | % | |||
Robert A. Panora (5) | 288,350 | 1.5 | % | |||
Charles T. Maxwell (6) | 100,000 | *% | ||||
Angelina M. Galiteva (7) | 75,000 | *% | ||||
Ahmed F. Ghoniem (8) | 50,000 | *% | ||||
David A. Garrison (9) | 33,500 | *% | ||||
Benjamin Locke (10) | 68,750 | *% | ||||
Joseph E. Aoun (11) | 12,500 | *% | ||||
Earl Lewis (12) | 6,250 | *% | ||||
| All executive officers and directors as a group (8 persons) | 4,474,265 | 23.1 | % | |||
(6) Based solely on a Schedule 13D filed by Tryfon Natsis and Despina Pantopoulos Natsis on February 1, 2017. The address for Mr. and Mrs. Natsis is 36 Chemin Du Milieu, Collonge-Bellerive, Geneva, Switzerland 1245.
(7) Includes: (a) 5,918 shares of common stock; and (b) 586,800 shares underlying options to purchase shares of common stock. Does not include 220,000 shares underlying options that are not currently exercisable.
(8) Includes: (a) 483,183 shares of common stock, and (b) 60,000 shares of underlying options to purchase shares of common stock. Does not include 90,000 shares underlying options of common stock that are not currently exercisable.
(9) Includes: (a) 155,351 shares of common stock held by Mr. John N. Hatsopoulos; (b) 258,631 shares held by Mr. Hatsopoulos and Mrs. Patricia Hatsopoulos; (c) 28,225 shares of common stock held by Mrs. Hatsopoulos; (d) 3,325 shares of common stock held in an individual retirement account for Mrs. Hatsopoulos; and (e) options to purchase 12,723 shares held by Mr. Hatsopoulos. Does not include the following shares with respect to which Mr. Hatsopoulos disclaims beneficial ownership: (a) shares of common stock held in The John N. Hatsopoulos 1989 Family Trust for the benefit of Nia Maria Hatsopoulos Jephson, of which Mrs. Ann Marie Pacheco is the sole trustee, (b) shares of common stock held in the Nia M. Hatsopoulos Jephson 2011 Irrevocable Trust, of which Mrs. Pacheco is the sole trustee, and (c) shares of common stock held in The John N. Hatsopoulos Family Trust 2007, of which Mr. Yiannis Monovoukas is the sole trustee. Mrs. Pacheco provides administrative services for Mr. Hatsopoulos.
(10) Includes: (a) 636 shares of Common Stock held by Mr. John K. Whiting, IV, and (b) options to purchase 197,500 shares of common stock. Does not include 165,000 shares underlying options that are not currently exercisable.
(11) Represents 112,723 shares underlying options to purchase shares of common stock. Does not include 152,500 shares underlying options that are not currently exercisable.
(12) Includes: (a) 50,000 shares of common stock held by Ms. Angelina Galiteva, and (b) options to purchase 60,000 shares of common stock. Does not include 90,000 shares underlying options that are not currently exercisable.
(13) Includes: (a) 7,800 shares of common stock; and (b) 95,000 shares underlying options to purchase shares of common stock. Does not include 35,000 shares underlying options that are not currently exercisable.
(14) Represents 72,723 shares underlying options to purchase shares of common stock. Does not include 90,000 shares underlying options that are not currently exercisable.
(15) Represents 60,000 shares underlying options to purchase shares of common stock. Does not include 90,000 shares underlying options that are not currently exercisable.
(16) Represents 0 shares underlying options to purchase shares of common stock. Does not include 100,000 shares underlying options that are not currently exercisable.
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Securities Authorized for Issuance Under Equity Compensation Plans
The following table provides information as of December 31, 2015,2022, regarding Common Stockshares of common stock that may be issued under the Company’s equity compensation plans.
| Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted-average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in second column) | ||||||||
| Equity compensation plans approved by security holders | 1,268,200 | $ | 3.06 | 1,614,533 | ||||||
| Equity compensation plans not approved by security holders | — | — | — | |||||||
| Total | 1,268,200 | $ | 3.06 | 1,614,533 | ||||||
| Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted-average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in second column) | |||||||||
| Equity compensation plans approved by security holders | 3,204,297 | $ | 1.61 | 3,749,393 | |||||||
| Equity compensation plans not approved by security holders | — | — | — | ||||||||
| Total | 3,204,297 | $ | 1.61 | 3,749,393 | |||||||
The 2006 Stock Incentive Plan and 2022 Stock Incentive Plan are intended to provide incentives to theCompany officers, directors, employees, and consultants by providing such individuals with opportunities to purchase stock in the Company pursuant to options granted hereunder which do not qualify as ISOs ("Non-Qualified Option"). The Board administers“Incentive Stock Options,” or “ISO” or “ISOs,” under Section 422(b) of the Plan, but allows for a single executive, currently Co-CEO John N. Hatsopoulos, to grant a limited numberInternal Revenue Code of 1986, as amended, or the “Code;” such options onbeing an annual basis.“NSO” or “NSOs”.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires the Company's executive officers and directors, and persons who own more than fiveten percent of any publicly traded class of the Company's equity securities,our Common Stock ("10% holders"), to file reports of ownership and changes in ownership of equity securities of the Company with the SEC and the NASDAQ. Officers, directors, and greater-than-five-percent stockholders are required by the SEC's regulations to furnish the Company with copies of all Section 16(a) forms that they file.
CORPORATE GOVERNANCE
The Board of Directors
The number of directors of the Company is established by resolution of the Board of Directors in accordance with the Company's Bylaws. The exact number of directors is currently set at six by resolution of the Board.By-laws. The directors are elected to serve for one year terms, withuntil the term of directors expiring each year at thenext succeeding annual meeting of stockholders; provided further, that the term of each director shall continuestockholders or until the election and qualification of a successor and be subject toor such director’s earlier death, resignation or removal.
The Company's Certificate of Incorporation and BylawsBy-laws provide that the authorized number of directors may be changed only by resolution of the Board, and also provide that our directors may be removed only for cause and only by the affirmative vote of the holders of at least two thirds of the votes that all our stockholders would be entitled to cast in an annual election of directors, and that any vacancy on ourthe Board, including a vacancy resulting from an enlargement of our Boardincrease in the number of Directors, may be filled only by vote of a majority of our directors then in office.
Members of the Board discussed various business matters informally on numerous occasions throughout the year. There waswere three formal board meetings during 2022 and the Board meetings in person and two formal Board meetingsof Directors handled certain matters by teleconference during 2015.written consent on three occasions. All current directors attended at least 75% of the meetings of our Board.all Board meetings. Independent directors endeavor to meet on a regular basis as often as necessary to fulfill their responsibilities, including at least twice annually in executive sessionsessions without the presence of non-independent directors and management.
Board Leadership Structure and Role in Risk Oversight
The Company separates the roles of Co-ChiefChief Executive OfficersOfficer and ChairmanChairperson in recognition of the differences between the two roles. Our Co-ChiefChief Executive Officers areOfficer is responsible for setting the strategic direction for the Company and the overall leadership and performance of the Company. Our ChairmanChairperson provides guidance to the Co-ChiefChief Executive Officers,Officer, sets the agenda for Board meetings, presides over meetings of the full Board and leads all executive meetings of the independent directors. We are a small company with a small management team, and we feel the separation of these roles enhances high-level attention to our business. Our Board has no lead independent director.
Our Board oversees our risk management processes directly and through its committees. Our management is responsible for risk management on a day-to-day basis. The Audit Committee assists the Board in fulfilling its oversight responsibilities with respect to risk management in the areas of financial reporting, internal controls and compliance with legal and regulatory requirements, and discusses policies with respect to risk assessment and risk management, including guidelines and policies to govern the process by which the Company’s exposure to risk is handled. The Compensation Committee assists the Board in fulfilling its oversight responsibilities with respect to the management of risks arising from our compensation policies and programs. The Nominating and Governance Committee assists the Board in fulfilling its oversight responsibilities with respect to the management of risks associated with board organization, membership and structure, succession planning for our directors, and corporate governance.
Committees of the Board of Directors
Our Board directs the management of our business and affairs and conducts its business through meetings of the Board and the following standing committees: the Audit Committee, the Compensation Committee, and the Nominating and Governance Committee.
Audit Committee.Committee. The Audit Committee is presently composed of three members of the Board: Mr. Charles T. Maxwell (Chairman), Ms. Angelina M. Galiteva (Chair), Mr. Fred Holubow and Dr. Ahmed F. Ghoniem.John Albertine. The Audit Committee assists the Board in the oversight of the audit of the Company’s financial statements and the quality and integrity of its accounting, auditing and financial reporting processes. The Audit Committee also has the responsibility of reviewing the qualifications, independence and performance of the Company’s independent registered public accounting firm and is responsible for the appointment, retention, oversight and, where appropriate, termination of the independent registered public accounting firm. During fiscal year 2015,2022, the Audit Committee held four meetings. The Board has determined that each of the members of the Audit Committee meets the criteria for independence under the applicable listing standards of the NASDAQ,OCTQX, and that Mr. MaxwellMs. Galiteva also qualifies as an “audit committee financial expert,” as defined by the rules adopted by the SEC. The Board has adopted a written charter for the Audit Committee, which is reviewed annually by the Audit Committee. The current Audit Committee Charter is available on the Company’s web site,
http://investors.tecogen.com/audit-committee-charter.
Compensation Committee. The Compensation Committee is presently composed of three members of the Board: Mr. Earl R. Lewis (Chairman)(Chair), Ms. Angelina M. Galiteva, and Dr. Joseph E. Aoun.Ahmed Ghoniem. The principal functions of the Compensation Committee are reviewing with management cash and other compensation policies for employees, making recommendations to the Board regarding compensation matters and determining compensation for the Executive Officers. Our Co-ChiefChief Executive Officers haveOfficer has been instrumental in the design and recommendation to the Compensation Committee of compensation plans and awards for our directors and executive officers including our President and Chief Operating Officer, and Chief Financial Officer.Officer, and General Counsel. All compensation decisions for the Chief Executive OfficersOfficer and all other executive officers are reviewed and
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approved by the Compensation Committee and can be subject to ratification by the Board of Directors. The Compensation Committee has the authority under its charter to engage the services of outside advisors, experts and others to assist the Compensation Committee. In 2015,2022, no compensation consultant was engaged for employee or executive compensation.During fiscal year 2015,2022, the Compensation Committee held nodid not hold a formal meetings.meeting. The Board has determined that each of the members of the Compensation Committee meets the criteria for independence under the applicable NASDAQOTCQX listing standards. The current Compensation Committee Charter is available on the Company’s web site at http://investors.tecogen.com/compensation-committee-charter.
Nominating and Governance Committee. The Nominating and Governance Committee is presently composed of three membersone member of the Board: Mr.Dr. Ahmed F. Ghoniem, (Chairman), Mr. Charles T. Maxwell and Dr. Joseph E. Aoun, each of whomwho is an independent director as independence is defined by the NASDAQOTCQX rules and regulations. The Nominating and Governance Committee functions are to identify persons qualified to serve as members of the Board, to recommend to the Board of Directors persons to be nominated by the Board for election as directors at the annual meeting of stockholders and persons to be elected by the boardBoard to fill any vacancies and recommend to the Board persons to be appointed to each of its committees. Qualifications for consideration as a director nominee may vary according to the particular areas of expertise being sought as a complement to the existing composition of our Board. However, minimum qualifications include high level leadership experience in business activities, breadth of knowledge about issues affecting the Company, experience on other boards of directors, preferably public company boards, and time available for meetings and consultation on Company matters. In addition, the
Nominating and Governance Committee is responsible for developing and recommending to the Board a set of corporate governance guidelines applicable to the Company (as well as reviewing and reassessing the adequacy of such guidelines as it deems appropriate from time to time) and overseeing the annual self-evaluation of the Board. The committee held notwo formal meetings in 2015.2022. The charter of the Nominating and Governance Committee is available on the Company’s website at http://investors.tecogen.com/nominating-and-governance-committee-charter.
Nominations and Proposals of Stockholders
The Company’s Nominating and Governance Committee identifies new director candidates through recommendations from members of the Committee, other Board members and executive officers of the Company and will consider candidates who are recommended by security holders, as described below. Although the Board does not have a formal diversity policy, the Committee and the Board will consider such factors as it deems appropriate to assist in developing a Board and committees that are diverse in nature and comprised of experienced and seasoned advisors. These factors focus on skills, expertise or background and may include decision-making ability, judgment, personal integrity and reputation, experience with businesses and other organizations of comparable size, experience as an executive with a publicly traded company, and the extent to which the candidate would be a desirable addition to the Board and any committees of the Board.
A stockholder who, in accordance with Rule 14a-8, or Rule 14a-8, under the Securities Exchange Act of 1934, as amended, or the Exchange Act, wants to present a proposal for inclusion in the Company's 2016 Proxy Statement and proxy card relating to the 2016 Annual Meeting2023 annual meeting of Stockholdersstockholders must submit the proposal not less than 120 days before the date the company's proxy statement was released to stockholders in connection with the 2024 annual meeting, or by January 1, 2016.December 22, 2023. In order for the proposal to be included in the Proxy Statement, the stockholder submitting the proposal must meet certain stock ownership and other eligibility standards and comply with certain regulationsrules established by the SEC.
Stockholders who wish to present a business proposal or nominate persons for election as directors at the Company's 20162024 Annual Meeting of Stockholders must provide a notice of the business proposal or nomination in accordance with Section 1.11 of our Bylaws,By-laws, in the case of business proposals, or Section 1.10 of our Bylaws,By-laws, in the case of director nominations. In order to be properly brought before the 20162024 Annual Meeting of Stockholders, Sections 1.10 and 1.11 of our BylawsBy-laws require that a notice of the business proposal the stockholder wishes to present (other than a matter brought pursuant to Rule 14a-8), or the person or persons the stockholder wishes to nominate as a director, must be received at our principal executive office not less than 90 days, and not more than 120 days, prior to the first anniversary of the Company's prior year's annual meeting. Therefore, any notice intended to be given by a stockholder with respect to the Company's 20162024 Annual Meeting of Stockholders pursuant to our BylawsBy-laws must be received at our principal executive office no earlier than February 12, 20165, 2024 and no later than March 13, 2016.5, 2024. However, if the date of our 20162024 Annual Meeting of Stockholders occurs more than 3020 days before or 3060 days after June 11, 2016,6, 2024, the anniversary of the 20152023 Annual Meeting of Stockholders, a stockholder notice will be timely if it is received at our principal executive office by the later of (1) the 120th day prior to such annual meeting or (2) the close of business on the tenth day following the day on which public disclosure of the date of the meeting was made. To be in proper form, a stockholder's notice must include the specified information concerning the stockholder and the business proposal or nominee, as described in Sections 1.10 and 1.11 of our Bylaws.By-laws.
All proposals must be mailed to the Company's principal executive office, at the address stated herein, and should be directed to the attention of the Secretary of the Company.
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The Nominating and Corporate Governance Committee will evaluate new director candidates in view of the criteria described above, as well as other factors the Committee deems to be relevant, through reviews of biographical and other information, input from others, including members of the Board and executive officers of the Company, and personal discussions with the candidate when warranted by the results of these other assessments. The Committee will evaluate any director candidates recommended by security holders under the same process. In determining whether to recommend to the Board the nomination of a director who is a member of the Board, the Committee will review the Board performance of such director and solicit feedback about the director from other Board members.
Code of Conduct and Ethics
The Company has adopted a code of business conduct and ethics that applies to the Company’s directors, officers and employees. The Company’s code of business conduct and ethics is intended to promote honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; full, fair, accurate, timely and understandable disclosure in reports and documents that the Company files with, or submits to, the SEC and in other public communications made by the Company; compliance with applicable governmental laws, rules and regulations; prompt internal reporting of violations of the code of business conduct and ethics to an appropriate person or persons identified in the code of business conduct and ethics; and accountability for adherence to the code of business conduct and ethics. The Company’s code of business conduct and ethics is available on the Company’s website at http://investors.tecogen.com/code-of-business-conduct-and-ethics.ir.tecogen.com/governance-docs. A printed copy of the Company's code of business conduct and ethics is also available free of charge to any person who requests a copy by writing to our Secretary, Tecogen Inc., 45 First Avenue, Waltham, MA 02451.
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REPORT OF THE AUDIT COMMITTEE
The information contained in this Proxy Statement with respect to the Audit Committee Report and charter and the independence of the members of the Audit Committee shall not be deemed to be “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933, as amended, or the “Securities Act”“Securities Act”, or the Exchange Act, except to the extent that the Company specifically incorporates it by reference in such filing.
The Company has an Audit Committee that is comprised of independent Directors. The Audit Committee is directly responsible for the appointment, compensation, retention and oversight of the accounting firm that is engaged as the Company’s independent registered public accounting firm. The Company’s management is responsible for the Company’s internal controls, disclosure controls and financial reporting process. The Company’s independent registered public accounting firm is responsible for performing an independent audit of the Company’s consolidated financial statements and expressing an opinion on the conformity of those financial statements with accounting principles generally accepted in the United States.
In the performance of the Audit Committee’s oversight function, we have reviewed and discussed with management the Company’s audited consolidated financial statements of the Company for the fiscal year ended December 31, 20152022 and management’s assessment of the effectiveness of the Company’s internal control over financial reporting. We have also discussed with the Company’s independent registered public accounting firm the matters requiring discussion pursuant to Statement on Auditing Standards No. 61, as amended (Communications with Audit Committees) and as adopted by the Public Company Accounting Oversight Board in Rule 3200TAuditing Standard 1301 and such other matters as we have deemed to be appropriate. We have also discussed with the Company’s independent registered public accounting firm matters relating to its independence and have received the written disclosures and letter from it required by the applicable requirements of the Public Company Accounting Oversight Board.
On the basis of the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors that the Company’s audited consolidated financial statements for the year ended December 31, 20152022 be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 20152022 for filing with the Securities and Exchange Commission.
By the Members of the Audit Committee,
Ms. Angelina M. Galiteva, its Chair
Mr. Fred Holubow
Dr. Ahmed F. GhoniemJohn M. Albertine
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COMPENSATION OF DIRECTORS AND NAMED EXECUTIVE OFFICERS
Summary Compensation Table
The following table sets forth information regarding annual and long-term compensation with respect to the compensationfiscal years ended December 31, 2022 and 2021, paid or accrued by the Company to or on behalf of ourthose persons who were, during the fiscal years ended December 31, 2020 or December 31, 2022, the Company's Chief Executive Officer, Chief Financial Officer and the Company's most highly compensated named executive officers for the Company's last two completed fiscal years:serving as such as of December 31, 2022 whose compensation was in excess of $100,000 ("Named Executive Officers").
| Name and principal position | Year | Salary ($) | Bonus ($) | Stock awards ($) | Option awards ($)(1) | All other compensation ($) | Total ($) | ||||||
| John N. Hatsopoulos | 2015 | 1 | — | — | — | — | 1 | ||||||
| Co-Chief Executive Officer | 2014 | 1 | — | — | — | — | 1 | ||||||
| (Principal Executive Officer) | |||||||||||||
Benjamin Locke (2) | 2015 | 108,116 | — | — | — | 108,116 | |||||||
| Co-Chief Executive Officer | 2014 | 150,000 | — | — | 323,751 | — | 473,751 | ||||||
| (Principal Executive Officer) | |||||||||||||
Robert A. Panora (3) | 2015 | 131,963 | — | — | — | 131,963 | |||||||
| Chief Operating Officer and President | 2014 | 163,770 | 50,000 | — | — | — | 213,770 | ||||||
| David A. Garrison | 2015 | 186,923 | — | — | — | — | 186,923 | ||||||
| Chief Financial Officer, Treasurer and Secretary | 2014 | 118,400 | — | — | 85,387 | — | 203,787 | ||||||
| (Principal Financial Officer) | |||||||||||||
Bonnie J. Brown (4) | 2014 | 120,840 | — | — | — | 21,800 | 142,640 | ||||||
| Former Chief Financial Officer, Treasurer and Secretary | |||||||||||||
| Name and principal position | Year | Salary ($) | Bonus ($) | Stock awards ($) | Option awards ($) (1) | All other compensation ($) (7) | Total ($) | ||||||||||||||||
| Benjamin M. Locke | 2022 | 210,000 | — | — | 29,330 | 1,806 | 241,136 | ||||||||||||||||
| Former Chief Executive Officer | 2021 | 210,000 | 35,000 | — | — | 1,021 | 246,021 | ||||||||||||||||
(Former Principal Executive Officer) (2) | |||||||||||||||||||||||
| Abinand Rangesh | 2022 | 167,500 | — | — | 29,330 | 308 | 197,138 | ||||||||||||||||
Chief Executive and Financial Officer (Principal Executive and Financial Officer) and Treasurer (3) | 2021 | 158,117 | 15,000 | — | — | 308 | 173,425 | ||||||||||||||||
| Robert A. Panora | 2022 | 160,000 | — | — | 21,998 | 4,115 | 186,113 | ||||||||||||||||
Chief Operating Officer and President (4) | 2021 | 160,000 | 17,500 | — | — | 4,115 | 181,615 | ||||||||||||||||
| John K. Whiting, IV | 2022 | 164,100 | — | — | 21,998 | 2,188 | 188,286 | ||||||||||||||||
General Counsel and Secretary (5) | 2021 | 159,400 | 17,500 | — | — | 2,075 | 178,975 | ||||||||||||||||
| Joseph B. Gehret | 2022 | 179,379 | 10,000 | — | 14,665 | 2,447 | 206,491 | ||||||||||||||||
| Chief Technical Officer | 2021 | 173,120 | 30,000 | — | 32,850 | 2,346 | 238,316 | ||||||||||||||||
Jeffrey H. Glick (6) | 2022 | 215,965 | — | — | 14,665 | 1,941 | 232,571 | ||||||||||||||||
| Vice President of Sales | 2021 | 219,536 | 3,500 | — | — | 1,879 | 224,915 | ||||||||||||||||
______________________________________________________
(1)The amounts in the "Option Awards" column reflect the aggregate grant date fair value of the awards computed in accordance with FASB ASC Topic 718. The assumptions used by us with respect to the valuation of stock and option awards are set forth in "Note 14 - Stockholders' Equity" to our Notes to the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2022. (2)Mr. Locke resigned as our Chief Executive Officer on January 30, 2023. (3) On January 30, 2023 Dr. Rangesh was appointed Chief Executive Officer. Dr. Rangesh was appointed Chief Financial Officer and Treasurer on June 16, 2021. (4) Mr. Panora transitioned to a part-time role on January 11, 2020. (5) Mr. Whiting has provided services on a part-time basis since he joined us in 2018 and provided approximately 30 hours of service per week in both 2021 and 2022. (6) Includes base salary and sales commissions. (7) Premiums paid by us for disability, group term life insurance and 401k Match. See "Employment Contracts and Termination of Employment and Change in Control Arrangements" below for the terms of certain agreements and change-in-control provisions. - 15 - |
Outstanding Equity Awards at Fiscal Year-End
The following table sets forth information with respect to outstanding equity awards held by our executive officers as of December 31, 2015:2022.
| Option Awards | Stock awards | |||||||||||||||||||||||||||||||||||||
| Name | Number of securities underlying unexercised options (#) exercisable | Equity incerntive awards; number of securities underlying unexercised options (#) unexercisable | Option exercise price ($) | Option expiration date | Number of shares of stock that have not vested (#) | Market value of shares of stock that have not vested ($) | ||||||||||||||||||||||||||||||||
| Benjamin M. Locke | (1) | 37,500 | — | $ | 3.20 | 6/3/2023 | — | — | ||||||||||||||||||||||||||||||
| (2) | 62,500 | — | $ | 4.96 | 12/17/2024 | — | — | |||||||||||||||||||||||||||||||
| (3) | 100,000 | — | $ | 4.96 | 12/17/2024 | — | — | |||||||||||||||||||||||||||||||
| (4) | 9,200 | — | $ | 10.33 | 11/19/2024 | — | — | |||||||||||||||||||||||||||||||
| (5) | 18,400 | — | $ | 5.65 | 12/11/2024 | — | — | |||||||||||||||||||||||||||||||
| (6) | 9,200 | — | $ | 5.65 | 6/10/2025 | — | — | |||||||||||||||||||||||||||||||
| (7) | 200,000 | — | $ | 3.68 | 5/31/2028 | — | — | |||||||||||||||||||||||||||||||
| (8) | 150,000 | 150,000 | $ | 0.74 | 7/15/2030 | — | — | |||||||||||||||||||||||||||||||
| (9) | — | 70,000 | $ | 1.10 | 1/21/2032 | — | — | |||||||||||||||||||||||||||||||
| Abinand Rangesh | (10) | 10,000 | — | $ | 3.91 | 12/12/2026 | — | — | ||||||||||||||||||||||||||||||
| (11) | 25,000 | 25,000 | $ | 0.71 | 7/9/2030 | — | — | |||||||||||||||||||||||||||||||
| (12) | — | 70,000 | $ | 1.10 | 1/21/2032 | — | — | |||||||||||||||||||||||||||||||
| Robert A. Panora | (13) | 12,723 | — | $ | 0.79 | 4/29/2026 | — | — | ||||||||||||||||||||||||||||||
| (14) | 100,000 | 100,000 | $ | 0.71 | 7/9/2030 | — | — | |||||||||||||||||||||||||||||||
| (15) | — | 52,500 | $ | 1.10 | 01/21/2032 | — | — | |||||||||||||||||||||||||||||||
| John K. Whiting, IV | (16) | 10,000 | — | $ | 2.50 | 1/16/2028 | — | — | ||||||||||||||||||||||||||||||
| (17) | 50,000 | — | $ | 3.80 | 12/11/2028 | — | — | |||||||||||||||||||||||||||||||
| (18) | 37,500 | 12,500 | $ | 3.76 | 6/11/2029 | — | — | |||||||||||||||||||||||||||||||
| (19) | 100,000 | 100,000 | $ | 0.71 | 7/9/2030 | — | — | |||||||||||||||||||||||||||||||
| (20) | — | 52,500 | $ | 1.10 | 01/21/2032 | — | — | |||||||||||||||||||||||||||||||
| Joseph B. Gehret | (21) | 3,181 | — | $ | 3.93 | 4/29/2026 | — | — | ||||||||||||||||||||||||||||||
| (22) | 25,000 | — | $ | 3.62 | 1/11/2029 | — | — | |||||||||||||||||||||||||||||||
| (23) | 12,500 | 37,500 | $ | 1.75 | 10/25/2031 | — | — | |||||||||||||||||||||||||||||||
| (24) | — | 35,000 | $ | 1.10 | 1/21/2032 | — | — | |||||||||||||||||||||||||||||||
| Jeffrey H. Glick | (25) | 7,500 | — | $ | 3.44 | 7/20/2028 | — | — | ||||||||||||||||||||||||||||||
| (26) | — | 35,000 | $ | 1.10 | 01/21/2032 | — | — | |||||||||||||||||||||||||||||||
(1)Includes stock option award granted on June 3, 2013, with 25% of the options vesting on June 3, 2014 and then an additional 25% of the options vesting on each of the subsequent three anniversaries, subject to Mr. Locke's continued employment and subject to acceleration of vesting upon a change in control.
(2) Includes stock option award granted on December 18, 2014, with 25% of the options vesting on December 18, 2015 and an additional 25% of the options vesting on each of the subsequent three anniversaries, subject to Mr. Locke's continued employment and subject to acceleration of vesting upon a change in control.
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| Option awards | Stock awards | ||||||||||||||||
| Name | Number of securities underlying unexercised options (#)exercisable | Number of securities underlying unexercised options (#)unexercisable | Option exercise price ($) | Option expiration date | Number of shares of stock that have not vested (#) | Market value of shares of stock that have not vested ($)(1) | |||||||||||
| John N. Hatsopoulos | — | — | — | — | — | ||||||||||||
Benjamin M. Locke (2)(3)(4) | 18,750 | 18,750 | 3.20 | 6/3/2023 | |||||||||||||
| 15,625 | 46,875 | 4.96 | 12/18/2024 | ||||||||||||||
| 25,000 | 75,000 | 4.96 | 12/18/2024 | ||||||||||||||
Robert A. Panora (5) | 125,000 | — | 2.60 | 2/14/2021 | 138,350 | 484,225 | |||||||||||
David A. Garrison (6) | 12,500 | 37,500 | 4.50 | 4/24/2024 | |||||||||||||
(5) Includes stock option award granted December 11, 2014 in connection with Mr. Locke's service with ADGE. Upon completion of the ADGE Merger, all ADGE options were exchanged for fully vested options of the Company according to an exchange ratio. The exchange ratio affected the number of Tecogen options received. (6) Includes stock option award granted June 6, 2015 in connection with Mr. Locke's service with ADGE. Upon completion of the ADGE Merger, all ADGE options were exchanged for fully vested options of Tecogen according to an exchange ratio. The exchange ratio affected the number of Tecogen options received. (7) Includes stock option award granted May 31, 2018 in connection with Mr. Locke's service with us, with 25% of the options vesting on May 31, 2019 and then an additional 25% of the options vesting on each of the subsequent three anniversaries, subject to Mr. Locke's continued employment and subject to acceleration of vesting upon a change in control. (8) Includes stock option award granted on July 15, 2020, that provides that 50% of the options vest once we achieve Adjusted EBITDA of not less than 2% of revenue for two consecutive quarters and the remaining 50% of the options vest once we have achieved Adjusted EBITDA of 3% for four consecutive quarters, subject to Mr. Locke's continued employment and subject to acceleration of vesting upon a change in control. The initial performance target was achieved and 50% of the options vested on June 30, 2022. (9) Includes stock option award granted on January 21, 2022 in connection with Mr. Locke's service with us, with 50% of the options vesting on January 21, 2023 and then 50% vesting on January 21, 2024, subject to Mr. Locke's continued employment and subject to acceleration of vesting upon a change in control. (10) Includes stock option award granted December 12, 2016 in connection with Dr. Rangesh's service with us, with 25% of the options vesting on December 12, 2017 and then an additional 25% of the options vesting on each of the subsequent three anniversaries, subject to Dr. Rangesh's continued employment and subject to acceleration of vesting upon a change in control. (11) Includes stock option award granted on July 9, 2020, that provides that 50% of the options vest once we achieve Adjusted EBITDA of not less than 2% of revenue for two consecutive quarters and the remaining 50% of the options vest once we have achieved Adjusted EBITDA of 3% for four consecutive quarters, subject to Dr. Rangesh's continued employment and subject to acceleration of vesting upon a change in control. The initial performance target was achieved and 50% of the options vested on June 30, 2022. (12) Includes stock option award granted on January 21, 2022 in connection with Dr. Rangesh's service with us, with 50% of the options vesting on January 21, 2023 and then 50% vesting on January 21, 2024, subject to Dr. Rangesh's continued employment and subject to acceleration of vesting upon a change in control. (13) Includes stock option award granted on May 12, 2016 in connection with the Ilios Merger. Upon completion of the Ilios Merger all option holders of Ilios Inc. received fully vested options of Tecogen according to an exchange ratio, where every 7.86 options of Ilios Inc., were exchanged for 1 fully vested option of Tecogen. (14) Includes stock option award granted on July 9, 2020, that provides that 50% of the options vest once we achieve Adjusted EBITDA of not less than 2% of revenue for two consecutive quarters and the remaining 50% of the options vest once we have achieved Adjusted EBITDA of 3% for four consecutive quarters, subject to Mr. Panora's continued employment and subject to acceleration of vesting upon a change in control. The initial performance target was achieved and 50% of the options vested on June 30, 2022. (15) Includes stock option award granted on January 21, 2022 in connection with Mr. Panora's service with us, with 50% of the options vesting on January 21, 2023 and then 50% vesting on January 21, 2024, subject to Mr. Panora's continued employment and subject to acceleration of vesting upon a change in control. (16) Includes stock option award granted January 16, 2018 in connection with Mr. Whiting's service with us, with 25% of the options vesting on January 16, 2019 and then an additional 25% of the options vesting on each of the subsequent three anniversaries, subject to Mr. Whiting's continued employment and subject to acceleration of vesting upon a change in control. (17) Includes stock option award granted December 11, 2018 in connection with Mr. Whiting's service with us, with 25% of the options vesting on December 11, 2019 and then an additional 25% of the options vesting on each of the subsequent three anniversaries, subject to Mr. Whiting's continued employment and subject to acceleration of vesting upon a change in control. (18) Includes stock option award granted June 11, 2019 in connection with Mr. Whiting's service with us, with 25% of the options vesting on June 11, 2020 and then an additional 25% of the options vesting on each of the subsequent - 17 - three anniversaries, subject to Mr. Whiting's continued employment and subject to acceleration of vesting upon a change in control. (19) Includes stock option award granted on July 9, 2020, that provides that 50% of the options vest once we achieve Adjusted EBITDA of not less than 2% of revenue for two consecutive quarters and the remaining 50% of the options vest once we have achieved Adjusted EBITDA of 3% for four consecutive quarters, subject to Mr. Whiting's continued employment and subject to acceleration of vesting upon a change in control. The initial performance target was achieved and 50% of the options vested on June 30, 2022. (20) Includes stock option award granted on January 21, 2022 in connection with Mr. Whiting's service with us, with 50% of the options vesting on January 21, 2023 and then 50% vesting on January 21, 2024, subject to Mr. Whiting's continued employment and subject to acceleration of vesting upon a change in control. (21) Includes stock option award granted April 29, 2016 in connection with Mr. Gehret's service with us, with 25% of the options vesting on April 29, 2017 and then an additional 25% of the options vesting on each of the subsequent three anniversaries, subject to Mr. Gehret's continued employment and subject to acceleration of vesting upon a change in control. (22) Includes stock option award granted January 11, 2019 in connection with Mr. Gehret's service with us, with 25% of the options vesting on January 11, 2020 and then an additional 25% of the options vesting on each of the subsequent three anniversaries, subject to Mr. Gehret's continued employment and subject to acceleration of vesting upon a change in control. (23) Includes stock option award granted October 25, 2021 in connection with Mr Gehret's service with us, with 25% of the options vesting on October 25, 2022 and then an additional 25% of the options vesting on each of the subsequent three anniversaries, subject to Mr. Gehret's continued employment and subject to acceleration of vesting upon a change in control. (24) Includes stock option award granted on January 21, 2022 in connection with Mr. Gehret's service with us, with 50% of the options vesting on January 21, 2023 and then 50% vesting on January 21, 2024, subject to Mr. Gehret's continued employment and subject to acceleration of vesting upon a change in control. (25) Includes stock option award granted July 20, 2018 in connection with Mr. Glick's service with us, with 25% of the options vesting on July 20, 2019 and then an additional 25% of the options vesting on each of the subsequent three anniversaries, subject to Mr. Glick's continued employment and subject to acceleration of vesting upon a change in control. (26) Includes stock option award granted on January 21, 2022 in connection with Mr. Glick''s service with us, with 50% of the options vesting on January 21, 2023 and then 50% vesting on January 21, 2024, subject to Mr. Glick's continued employment and subject to acceleration of vesting upon a change in control. Executive Officer Target Bonus Plan On July 9, 2020 the Compensation Committee approved a target bonus plan that contemplated the payment of cash bonuses to our executive officers, including target bonuses of up to $50,000 for the Chief Executive Officer and target bonuses of up to $35,000 for each our Chief Operating Officer, Chief Financial Officer, Chief Accounting Officer and General Counsel. The bonus criteria include an Adjusted EBITDA performance target and individual performance goals, which are established annually by the Compensation Committee. For the fiscal year ended December 31, 2022, the Company did not achieve the Adjusted EBITDA performance target, therefore no executive bonuses were earned or accrued. |
Director Compensation
We did not also one ofpay any cash compensation to our employees will receive a fee of $500 per day for service on those days thatnon-employee directors in 2021 and 2022. However, our Board and/or each of the Audit, Compensation or Nominating and Governance Committees holds meetings, or otherwise conducts business. Non-employeenon-employee directors also will beare eligible to receive stock or option awards under our equity incentive plan. We did not award any stock or option awards for service as directors in 2021. In March 2022 our Board of Directors adopted a policy for compensation of non-employee directors of the Company pursuant to which each director is awarded options to purchase shares of our common stock consisting of options to purchase 100,000 shares awarded in connection with such director's initial appointment as a member of our Board, and options to purchase 25,000 shares of our common stock upon the director's reelection or reappointment to serve an additional term as a director. Such options vest in equal installments on the first, second, third, and fourth anniversaries of the date of grant. We reimburse all of our non-employee directors for reasonable travel and other expenses incurred in attending Board and committee meetings. Any director who is also one of our employees receives no additional compensation for serving as a director.
The following table sets forthprovides information with respect to the fiscal year 2015 compensation of our directors who were not executive officers duringfor the year ended December 31, 2015:2022 regarding all compensation awarded to, earned by, or paid to each person who served as a director for some portion or all of 2022, other than Mr. Hatsopoulos and Dr. Rangesh, who are not included in the table below as they are employees and receive no compensation for their services as
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| Name | Fees earned or paid in cash ($) | Stock awards ($) | Option awards ($) | All other compensation ($) | Total ($) | |||||
| Angelina M. Galiteva | 4,500 | — | — | — | 4,500 | |||||
| Joseph E. Aoun | 1,500 | — | — | — | 1,500 | |||||
| Ahmed F. Ghoniem | 3,000 | — | — | — | 3,000 | |||||
| Charles T. Maxwell | 4,500 | — | — | — | 4,500 | |||||
| Earl R. Lewis | 2,500 | — | — | — | 2,500 | |||||
directors. The compensation received by Mr. Hatsopoulos is described below under the heading "Advisory Agreement,"and the compensation received by Dr. Rangesh is shown in the "Summary Compensation Table" above.
| Name | Fees earned or paid in cash ($) | Stock Awards ($) | Option Awards ($) | Non-equity incentive compensation ($) | Nonqualified deferred compensation earnings ($) | All other compensation ($) | Total ($) | ||||||||||||||||
| Angelina M. Galiteva | — | — | 12,500 | — | — | — | 12,500 | ||||||||||||||||
| John Albertine | — | — | 61,000 | — | — | — | 61,000 | ||||||||||||||||
| Ahmed F. Ghoniem | — | — | 12,500 | — | — | — | 12,500 | ||||||||||||||||
| Earl R. Lewis | — | — | 12,500 | — | — | — | 12,500 | ||||||||||||||||
| Fred Holubow | — | — | 12,500 | — | — | — | 12,500 | ||||||||||||||||
| Option awards | Stock awards | ||||||||||||||||
| Name | Number of securities underlying unexercised options (#)exercisable | Number of securities underlying unexercised options (#) unexercisable | Option exercise price ($) | Option expiration date | Number of shares of stock that have not vested (#) | Market value of shares of stock that have not vested ($) | |||||||||||
Angelina M. Galiteva (1) | 25,000 | — | 2.60 | 2/14/2021 | 25,000 | 87,500 | |||||||||||
Joseph E. Aoun (2) | 12,500 | 12,500 | 4.50 | 12/31/2023 | |||||||||||||
Ahmed F. Ghoniem (3) | 25,000 | — | 2.60 | 2/14/2021 | |||||||||||||
Earl Lewis (4) | 6,250 | 18,750 | 4.96 | 12/18/2024 | |||||||||||||
Charles T. Maxwell (5) | 25,000 | — | 2.60 | 2/14/2021 | |||||||||||||
Compensation Committee Interlocks and Insider Participation
Employment Contracts and Termination of Employment and Change-in-Control Arrangements
The stock and option awards that would vest for each named executive officer if a change-in-control were to occur are disclosed under our Outstanding Equity Awards at Fiscal Year-End TableTable. . OurDescriptions of the change-in-control provisions in our stock and option awards contain certain change-in-control provisions. Descriptions of those provisions are set forth below:
Stock AwardsAwards: Change-in-Control Definition
For the purposes of our stock awards, change-in-control shall mean (a) the acquisition in a transaction or series of transactions by anya person (such term to include anyone deemed a person under Section 13(d)(3) of the Exchange Act), other than the Company or any of its subsidiaries, or any employee benefit plan or related trust of the Company or any of its subsidiaries, of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% or more of the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors or (b) the sale or other disposition of all or substantially all of the assets of the Company in one transaction or series of related transactions.
Option Awards Change-in-Control Definition
For the purposes of our option awards, change-in-control shall mean merger (or reverse merger), consolidation, or other similar event or the sale or lease of all or substantially all of the Company’sCompany's assets. Upon a change-in-control,while the optionee maintains a business relationship with the Company and the option has not fully vested, the option shall become exercisable for 100% of the then number of shares as to which it has not vested, such vesting to occur immediately prior to the closing of the acquisition.
On January 3, 2018 the Company entered into an Advisory Agreement with John N. Hatsopoulos, a member of the Board of Directors. The Advisory Agreement provides that Mr. Hatsopoulos will resign as a member of the Board of Directors at the Company's 2018 Annual Meeting of Stockholders or June 30, 2018, whichever comes first. Pursuant to the Advisory Agreement, Mr. Hatsopoulos will remain an advisor to the Company's Board of Directors and an employee of the Company in the Company's Investors Relations Department. He will be paid a salary of $1.00 annually and receive the same benefits as other similarly situated employees as well as administrative support for the duration of the agreement. Mr. Hatsopoulos was not nominated for election as a director at the June 6, 2018 Annual Meeting of Stockholders, but on February 1, 2019 was reappointed by the Company's Board of Directors to serve as a director of the Company. On July 22, 2019 the Advisory Agreement with Mr. Hatsopoulos was modified to provide that Tecogen would continue to provide the employee benefits
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contemplated by the Advisory Agreement until March 29, 2024 provided that Mr. Hatsopoulos continues to provide the advisory services contemplated by the agreement.
Consulting Agreement with Benjamin Locke
On January 27, 2023 the Company entered into a Consulting Agreement with Benjamin Locke, our former Chief Executive Officer who resigned from the Company on January 30, 2023. Pursuant to the terms of the agreement, which was effective on January 30, 2023, Mr. Locke will continue to support and provide services to the Company during the transitional period following his resignation for a period of one year from the effective date. Mr. Locke will be compensated for consulting services for the initial three (3) months of the agreement at the rate of $17,500 per month and will be compensated over the remaining nine (9) months of the term of the agreement at a monthly rate of $5,833. For a period of up to nine (9) months from the effective date, Mr. Locke will also be reimbursed $2,870 per month for healthcare insurance benefits until such time that Mr. Locke is no longer a participant in our healthcare insurance benefits. The aggregate payment to Mr. Locke for the duration of the consulting agreement, including the Company benefit plan reimbursement, is approximately $131,000. Mr. Locke is not entitled to any other compensation or benefits under the consulting agreement.
PAY VERSUS PERFORMANCE
Overview
We believe our performance-based compensation philosophy for our executive officers provides incentives to achieve both short-term and long-term business objectives; aligns the interest of our executive officers and long-term stockholders; and enables us to attract, hire and retain talented individuals in a competitive marketplace. Under our pay-for-performance philosophy, a significant portion of our executive officer compensation is at-risk and tied to objective performance goals. Our annual bonuses and the majority of our equity incentive awards are based on financial operating performance against pre-defined goals.
Pay Versus Performance (1)
| Year | Summary Compensation Table Total for PEO ($) | Compensation Actually Paid to PEO ($) (2) | Average Summary Compensation Table Total for Non-PEO NEO'S ($) (3)(4) | Average Compensation Actually Paid to Non-PEO NEO's ($) (4)(5) | Value of Initial Fixed $100 Investment Based on Total Shareholder Return ($) (6) | Net Income (Loss) ($) (7) | ||||||||||||||||||||||||||||||||
| 2022 | 241,136 | 305,068 | 202,120 | 268,196 | 100 | (2,447,927) | ||||||||||||||||||||||||||||||||
| 2021 | 246,021 | 254,876 | 199,449 | 187,246 | 96 | 3,696,000 | ||||||||||||||||||||||||||||||||
___________
(1) This table and the following discussions includes data for the "compensation actually paid" to Benjamin M. Locke, our former principal executive officer during the year presented ("PEO"), and our other Named Executive Officers ("NEO's"), as calculated and presented in accordance with Item 402(v) of Regulation S-K. These calculated amounts incorporate the impact of changes in the price of our common stock on the value of unvested and unexercised stock options and do not necessarily reflect amounts of compensation earned by or paid to our PEO and other NEO's for the period presented.
(2) In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to our PEO's total compensation for each year presented to determine the "compensation actually paid":
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PEO Compensation Actually Paid Calculation
| Year | Reported Summary Compensation Table Total for PEO ($) | Less: Reported Value of Equity Awards ($) (a) | Equity Award Adjustments ($) (b) | Less: Reported Change in Actuarial Present Value of Pension Benefits ($) (c) | Pension Benefit Adjustments ($) (c) | Compensation Actually Paid to PEO ($) | ||||||||||||||||||||||||||||||||
| 2022 | 241,136 | (29,330) | 93,262 | — | — | 305,068 | ||||||||||||||||||||||||||||||||
| 2021 | 246,021 | — | 8,855 | — | — | 254,876 | ||||||||||||||||||||||||||||||||
____________
(a) The grant date fair value of equity awards represents the total amounts reported in "Stock Awards" and "Option Awards" columns in the Summary Compensation Table for the applicable year.
(b) The equity award adjustments for each applicable year include the addition (or subtraction, as applicable) of the following: (i) the year-end value of any equity awards granted in the applicable year that are outstanding and unvested as of the end of the year; (ii) the amount of change as of the end of the applicable year (from the end of the prior fiscal year) in fair value of any awards granted in the prior years that are outstanding and unvested as of the end of the applicable year; (iii) for awards that are granted and vest in the same applicable year, the fair value as of the vesting date; (iv) for awards granted in prior years that vest in the applicable year, the amount equal to the change as of the vesting date (from the end of the prior fiscal year) in fair value: (v) for awards granted in prior years that are determined to fail to meet the applicable vesting conditions during the applicable year, a deduction for the amount equal to the fair value at the end of the prior fiscal year; and, (vi) the dollar value of any dividends or other earnings paid on stock or option awards in the applicable year prior to the vesting date that are not otherwise reflected in the fair value of such award or included in any other component of total compensation for the applicable year. The valuation assumptions used to calculate the fair values, as remeasured, differ from those disclosed at the time of grant as a result of changes to the Black-Scholes model assumption inputs used to value the equity awards held by our PEO and Non-PEO's. The amounts added or deducted in calculating the equity award adjustments are as follows:
PEO Equity Award Adjustments
| Year | Year End Fair Value of Equity Awards Granted in the Applicable Year and Unvested at Year End ($) | Year over Year Change in Fair Value of Outstanding Unvested Equity Awards ($) | Fair value as of Vesting Date of Equity Awards Granted and Vested in Year ($) | Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year ($) | Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year ($) | Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation ($) | Total Equity Award Adjustments ($) | |||||||||||||||||||||||||||||||||||||
| 2022 | 42,231 | (42,869) | — | 93,900 | — | — | 93,262 | |||||||||||||||||||||||||||||||||||||
| 2021 | — | (2,995) | — | 11,850 | — | — | 8,855 | |||||||||||||||||||||||||||||||||||||
(c) The Company does not provide any Pension or Deferred Compensation benefits to the PEO or the Non-PEO NEO's.
(3) The amounts reported in Average Summary Compensation Table for Non-PEO NEO's reflects the average of the amounts reported to the NEO's as a group (excluding the PEO, who has served as our CEO since 2018) in the "Total" column of the Summary Compensation Table for each applicable year.
(4) Our non-PEO NEO's for 2021 and 2022 were Abinand Rangesh, our Chief Executive and Financial Officer; Robert A. Panora, our Chief Operating Officer and President; John K. Whiting, IV, our General Counsel and Secretary; Joseph, B. Gehret, our Chief Technology Officer; and, Jeffrey H. Glick, our Vice President of Sales.
(5) In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to the average total compensation for the NEO's as a group (excluding our PEO) for each year to determine the average "compensation actually paid" to the NEO's, using the same methodology described above in Note 2:
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Non-PEO Average Compensation Actually Paid Calculation
| Year | Average Reported Summary Compensation Table Total for Non-PEO NEO's ($) | Less: Average Reported Value of Equity Awards ($) | Average Equity Award Adjustments ($) (a) | Average Compensation Actually Paid to Non-PEO NEO's | ||||||||||||||||||||||
| 2022 | 202,120 | (2,000) | 68,076 | 268,196 | ||||||||||||||||||||||
| 2021 | 199,449 | (16,700) | 4,497 | 187,246 | ||||||||||||||||||||||
______________
(a) The amounts added or deducted in calculating the equity award adjustments are as follows:
Non-PEO Total Average Equity Award Adjustments Calculation
| Year | Average Year End fair Value of Equity Awards Granted in the Applicable Year and Unvested at Year End ($) | Year over Year Average Change in Fair Value of Outstanding Unvested Equity Awards ($) | Average Fair value as of Vesting Date of Equity Awards Granted and Vested in Year ($) | Year over Year Average Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year ($) | Average Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year ($) | Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation ($) | Total Average Equity Award Adjustments ($) | |||||||||||||||||||||||||||||||||||||
| 2022 | 29,562 | 8,389 | — | 30,125 | 0 | — | 68,076 | |||||||||||||||||||||||||||||||||||||
| 2021 | 3,087 | (259) | — | 1,669 | 0 | — | 4,497 | |||||||||||||||||||||||||||||||||||||
(6) The amounts in the "Value of Fixed $100 Investment" column represents the total stockholder return ("TSR") of our common stock for the periods presented assuming a hypothetical $100 investment from the beginning of the earliest year in the pay-versus-performance table through the end of each applicable year in the table and assuming dividends, if any, were reinvested. The stock price performance reflected in these amounts is based on historical results and is not necessarily indicative of future stock price performance.
(7) Net Income (Loss) are as reported in our Annual Report on Form 10-K for the applicable year.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
Director Independence
The Company's common stock is listed on The OTCQX Market's Best Market. The Board considers the Company. The Company does not own any sharesstatus of American DG Energy, and EuroSite Power.
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AUDIT FEES SUMMARY
Fees billed by Wolf & Company P.C. ("Wolf") for services rendered in connection with the fiscal years ended 20152022 and 20142021 are set forth below. All fees earned by Wolf were pre-approved by the Audit Committee.
| 2015 | 2014 | |||
| Audit fees | $141,500 | $107,100 | ||
| Audit-related fees | 12,000 | — | ||
| Tax fees | — | — | ||
| All other fees | — | — | ||
| Total | $153,500 | $107,100 | ||
| 2015 | 2014 | 2022 | 2021 | |||||||||||
| Audit fees | $0 | $90,400 | Audit fees | $ | 220,629 | $ | 218,301 | |||||||
Audit-related fees (1) | 45,000 | 120,600 | Audit-related fees(1) | 3,000 | — | |||||||||
| Tax fees | — | — | Tax fees | — | — | |||||||||
| All other fees | — | — | All other fees | — | 5,750 | |||||||||
| Total | $45,000 | $211,000 | Total | $ | 223,629 | $ | 224,051 | |||||||
Audit Fees
Audit fees billed by Wolf for 20152022 and 20142021 consist of fees for the audit of the Company's financial statements included in the Company's fiscal year end reports for the year ended December 31, 20152022 and 2014 as well as the2021 and review of Company's interim financial statements in the Company's quarterly reports for the quarters since the quarter ended September 30, 2014.
Audit-related Fees
Audit fees billed by McGladrey for 2015 and 2014 includedassociated with consents for the registration statements and for the the Annual Report for the year ended December 31, 2014. For 2014, the audit-related fees were for services performed to provide a consent in preparation for an IPO in the spring of 2014.other miscellaneous filings.
Tax Fees
There were no tax fees billed by Wolf or McGladrey in 20152022 and 2014.2021.
All Other Fees
There were no Other Feesfees other fees in 2022 and other fees of $5,750 related to consultation services for 2015 and 2014.the Employee Retention Credit calculation in 2021.
Audit Committee's pre-approval policy and procedures
The Audit Committee’s current policy is to pre-approverequire all audit and permissible non-audit services provided by our independent auditors.auditors to be pre-approved by the committee. These services may include audit services, audit-related services, tax services and other services. The Audit Committee may also pre-approve particular services on a case-by-case basis.
PROPOSALS RECOMMENDED FOR CONSIDERATION BY STOCKHOLDERS
PROPOSAL 1
ELECTION OF DIRECTORS
The Company’s BylawsBy-laws provide that the number of directors shall be fixed from time to time by a vote of the majority of the Board of Directors. The Board of Directors currently consists of six members,the following seven members: Ms. Angelina M. Galiteva, Mr. John N. Hatsopoulos, Mr. Charles T. Maxwell, Dr. Ahmed F. Ghoniem, Mr. Fred Holubow, Mr. Earl R. Lewis, Dr. Joseph E. Aoun.John Albertine, and Dr. Abinand Rangesh.
The Board has concluded that the nomination and election of Ms. Angelina M. Galiteva, Mr. John N. Hatsopoulos, Mr. Charles T. Maxwell, Mr. Ahmed F. Ghoniem, Mr. Fred Holubow, Mr. Earl R. Lewis, Dr. Joseph E. Aoun,John Albertine, and Dr. Abinand Rangesh as members of the Board is in the best interests of the Company, and recommends stockholder approval of the election of each nominee to hold office for one year until the next annual meeting of stockholders or until their successors are duly elected and qualified. Biographical information concerning the nominees can be found under “Information About Directors and Executive Officers” above.
The persons named in the proxy will vote FOR each such nominee, except where authority has been withheld as to the nominee.
Vote Required for Approval
The election of directors will be determined by a plurality of the votes cast by the stockholders.
The Board recommends a vote FOR each of the nominees for election to the Board of Directors of the Company.
PROPOSAL 2
RATIFICATION OF APPOINTMENT OF WOLF & COMPANY P.C.
AS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2023
The Audit Committee has engagedselected Wolf & Company, P.C., or “Wolf” to serve as the Company's independent registered public accounting firm in connection with the audit of our consolidated financial statements for the fiscal year ended December 31, 2016,2023, and the review of the Company's consolidated financial statements for the quarters ended March 31, 2016,2023, June 30, 2016,2023, and September 30, 2016.2023. Wolf has served as the Company's independent registered public accounting firm since September 15, 2014.
Although ratification is not required, the Board is submitting the selection of Wolf to its stockholders for ratification as a matter of good corporate practice. If the selection is not ratified by stockholders, the Audit Committee will consider the results in connection with its selection of auditors for the balance of 2016.2023. Notwithstanding the ratification of the selection, the Audit Committee in its discretion may select a different independent registered public accounting firm at any time if it determines that such a change would be in the Company's best interest and the best interestinterests of its stockholders.
The Audit Committee, prior to engaging Wolf, considered the qualifications of that firm, its reputation for integrity, competence in the fields of accounting and auditing, and its independence.
The Company has been informed that neither Wolf nor any of its partners have any direct financial interest or any material indirect financial interest in the Company nor have any of them had any connection during the past three years with the Company in the capacity of promoter, underwriter, voting trustee, director, officer or employee. A representative of Wolf is expected to be present at the Annual Meeting, to make a statement if so desired, and to be available to respond to any appropriate questions.
To be approved, the ratification of the appointment of Wolf requires the affirmative vote of the holders of a majority in voting power of the votes cast by the holders of all of the shares of common stock present or represented by proxy at the meetingAnnual Meeting and voting affirmatively or negatively on such matter.entitled to vote thereon.
The Board recommends that stockholders vote FOR the ratification of the appointment of Wolf & Company P.C. as the Company's independent registered public accounting firm.
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ADDITIONAL INFORMATION
No Incorporation by Reference
In the Company’s filings with the Securities and Exchange Commission, or SEC, information is sometimes “incorporated by reference.” This means that we are referring you to information that has previously been filed with the SEC and the information should be considered as part of the filing. Based on SEC regulations, the “Audit Committee Report” and the “Compensation Committee Procedures,” specifically are not incorporated by reference into any other filings by the Company with the SEC. In addition, this Proxy Statement includes website addresses. These website addresses are intended to provide inactive, textual references only. The information on these websites is not part of this Proxy Statement.
Stockholder Communication with the Board
A stockholder that desires to communicate directly with the Board or one or more of its members concerning the affairs of the Company shall direct the communication in writing to Tecogen Inc., attention Corporate Secretary, 45 First Avenue, Waltham, Massachusetts,MA 02451. If such communication is intended for some but notor all of the members of the Board, the mailing envelope must contain a clear notation indicating that the enclosed letter is a “Shareholder-Board Communication”.“Stockholder-Board Communication.” The Corporate Secretary has been authorized to screen commercial solicitations and materials which pose security risks, are unrelated to the business or governance of the Company or are otherwise inappropriate. All such letters must identify the author as a shareholderstockholder and clearly state whether the intended recipients are all or individual members of the Board. The Corporate Secretary will make copies of all such letters and circulate them to the appropriate director or directors.
Householding of Proxy Statements
The SEC has adopted rules that permit companies and intermediaries (e.g., brokers) to satisfy the delivery requirements for proxy statements and annual report or Notice of Internet Availability of proxy materials with respect to two or more stockholders sharing the same address by delivering a single proxy statement and annual report or Notice of Internet Availability of proxy materials addressed to those stockholders. This process, which is commonly referred to as “householding,” potentially means extra convenience for stockholders and cost savings for companies.
A number of brokers with account holders who are our stockholders may “household” our proxy materials. In that event, a single Proxy Statementproxy statement and annual report will be delivered to multiple stockholders sharing an address unless contrary instructions have been received from the affected stockholders. Once you have received notice from your broker that they will be householding communications to your address, householding will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in householding and would prefer to receive a separate Proxy Statementproxy statement and annual report, or Notice of Internet Availability of proxy materials, please notify your broker and the Company's Secretary in writing at 45 First Ave, Waltham, MA 02451 or by telephone at (781) 466-6400. You can also obtain a copy at https://materials.proxyvote.com/87876P. The Company will promptly deliver, without charge, an additional copy of any such Proxy Statement and annual report or Notice of Internet Availability upon request. Stockholders who currently receive multiple copies of the proxy materials at their address and would like to request householding of their communications should contact their broker.
Other Proposed Action
The Board does not intend to bring any other matters before the Annual Meeting, nor does the Board know of any matters which other persons intend to bring before the Annual Meeting. If, however, other matters not mentioned in this Proxy Statement properly come before the Annual Meeting, the persons named in the accompanying form of proxy will vote thereon in accordance with the recommendation of the Board.
By Order of the Board of Directors
TECOGEN INC.
/s/ David A. GarrisonJohn K. Whiting, IV
Secretary of the Corporation
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