Ourmeeting. During 2023, (i) the Board
followingmet eight times, (ii) the
recommendation ofAudit Committee met six times, (iii) the Nominating and Corporate Governance Committee
has concludedmet two times, (iv) the Compensation Committee met five times, (v) the ESG Committee met two times, and (vi) the Investment Committee met two times. No member of the Board attended fewer than 75% of the aggregate of the total number of meetings of the Board (held during the period for which he or she was a director) and the total number of meetings held by all committees of the Board on which such director served (held during the period that
Mr. Stern should servesuch director served).Executive Sessions
The Board regularly meets in executive session, chaired by the Lead Independent Director, with no members of management present. The independent directors of the Board also meet in executive session with no members of management present. Each of the committees of the Board also meets regularly in executive session.
ORMAT TECHNOLOGIES, INC. | 2024 PROXY STATEMENT 26
Board and Committee Evaluations
Every year, the Board and each of its committees evaluate and discuss their respective performance and effectiveness. The Board and committee evaluation for 2023 was led by our General Counsel, Chief Compliance Officer and Corporate Secretary. These evaluations were conducted by providing each director with detailed questionnaires relating to the Board and its committees, covering a wide range of topics, including, but not limited to, the fulfillment of the Board and committee responsibilities identified in the Corporate Governance Guidelines and committee charters. All responses from directors are kept confidential and anonymous.
STEP 1: Initiation of Evaluations | | Our General Counsel, Chief Compliance Officer and Corporate Secretary initiates the annual evaluation process by presenting the proposed approach to the Board and distributing questionnaires to each director soliciting his or her opinions on Board performance and effectiveness. |
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STEP 2: Board and Committee Assessment Questionnaires | | Each director completes a questionnaire addressing the Board’s knowledge and understanding of, and performance with respect to, the Company’s business, strategy, values, plans and mission, the appropriateness of the Board’s structure and composition, the communication among the directors and between the Board and management and the Board’s meeting process. Committee members additionally assess, among other topics, how the committee has satisfied the responsibilities contained in its charter, the organization of the committee, the committee meeting process and the committee’s oversight. |
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STEP 3: Follow-Up Interviews | | Our General Counsel, Chief Compliance Officer and Corporate Secretary reviews each questionnaire and conducts follow-up interviews with each director as necessary. |
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STEP 4: Presentation of Findings | | Our General Counsel, Chief Compliance Officer and Corporate Secretary prepares and presents to the Board a report aggregating and summarizing for the Board and its committees the findings from the questionnaires and interviews. |
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STEP 5: Implementation of Feedback | | The Board and its committees discuss the findings and consider what, if any, actions should be implemented to enhance future performance. |
Governance Documents
Code of Business Conduct and Ethics and Corporate Governance Guidelines
We have adopted a Code of Business Conduct and Ethics that is applicable to all of our employees, executive officers and directors, as well as a directorCode of Ethics Applicable to Senior Executives that is applicable to our principal executive officers, principal financial officers, principal accounting officer and controller, and all persons performing similar functions, including our chief executive and senior financial officers. If we make any amendments to our Code of Business Conduct and Ethics or our Code of Ethics Applicable to Senior Executives or grant any waiver, including any implicit waiver, from a provision of either code applicable to our CEO, CFO, or principal accounting officer, we intend to disclose the nature of such amendment or waiver on our website within four business days to the extent required by SEC rules.
We have also adopted Corporate Governance Guidelines, which, together with our certificate of incorporation and bylaws, establish the governance framework for the management of the Company primarily becauseCompany. Our Corporate Governance Guidelines are intended to align the interests of his extensivedirectors and management bankingwith those of our stockholders. The guidelines address, among other matters, the role of our Board, Board composition and financial experience, particularlycommittees, Board membership criteria, director independence, Board meetings, performance evaluation and succession planning.
Our Code of Business Conduct and Ethics, Code of Ethics Applicable to Senior Executives and Corporate Governance Guidelines are available in technology-related industries.the “Investor Relations” section of our website at www.ormat.com.
ORMAT TECHNOLOGIES, INC. | 2024 PROXY STATEMENT 27
ORIX Governance Agreement
On May 4, 2017, the Company entered into a governance agreement (the "Governance Agreement") with ORIX Corporation ("ORIX"(the “Governance Agreement”) in connection with an agreement between ORIX, certain former stockholders of the Company, Mr. Isaac Angel, the Company's Chief Executive Officer (the "CEO"),Company’s current Chairman of the Board and Mr.former CEO, and Doron Blachar, the Company's Chief Financial Officer (the "CFO"),Company’s CEO, pursuant to which ORIX agreed to purchase approximately 22.1% of our shares of common stock, par value $0.001 per share (“Common Stock (the "ORIX Transaction"Stock”), for approximately $627 million.million (the “ORIX Transaction”). The Governance Agreement, which became effective on July 26, 2017 upon the closing of the ORIX Transaction, sets forth the rights and obligations of the Company and ORIX with respect to certain corporate governance matters of the Company, including, but not limited to, the appointment of directors to our Board, the composition of Board Committees and voting with respect to matters submitted to a vote of the stockholders of the Company. The Governance Agreement also sets forth limitations on the ability of ORIX and its affiliates to acquire securities of the Company in excess of certain thresholds.
The Governance Agreement provides ORIX the right, for as long as ORIX and its affiliates collectively hold at least 18% of the voting power of all of the Company'sCompany’s outstanding voting securities, to nominate three directors to our Board and jointly propose and nominate with the Company a director who is independent in accordance with the NYSE listing standards of the NYSE and SEC rules and regulations and who does not have, and within the three years prior to his or her becoming a director nominee of the Company has not had, any material relationship with ORIX or its affiliates (the "Independent Director"“Independent ORIX Director”). If ORIX and its affiliates collectively hold less than 18% of the voting power of all of the Company'sCompany’s outstanding voting securities but greater than or equal to 13% of the voting power of all of the Company'sCompany’s outstanding voting securities, ORIX will havehas the right to nominate two directors to our Board and jointly propose and nominate with the Company the Independent ORIX Director. If ORIX and its affiliates collectively hold less than 13% of the voting power of all of the Company'sCompany’s outstanding voting securities but greater than or equal to 5% of the voting power of all of the Company'sCompany’s outstanding voting securities, ORIX will have the right to nominate one director to our Board, but will no longer have the right to jointly propose and nominate with the Company the Independent ORIX Director. If ORIX holds less than 5% of the voting power of all of the Company'sCompany’s outstanding voting securities, ORIX willdoes not have the right to nominate any directors to our Board.
See "TRANSACTIONS WITH RELATED PERSONS" below for further information concerning the ORIX Transaction.
On July 26, 2017, upon the closing of the ORIX Transaction and pursuant to the Governance Agreement, the number of directors serving on our Board was increased from eight to nine in accordance with our Fourth Amended and Restated By-Laws to provide for the appointment of the Independent Director. Our Board, acting upon the recommendation of the Nominating and Corporate Governance Committee, appointed Mr. Wong as a director to fill the newly created directorship on the Board after determining that Mr. Wong is independent in accordance with the NYSE listing standards, SEC rules and regulations and our Corporate Governance Guidelines, and does not, and in the three years prior to his appointment did not, have any material relationship with ORIX or any of its affiliates. Also upon the closing of the ORIX Transaction and pursuant to the Governance Agreement, our former directors Mr. Gillon Beck, Mr. Ami Boehm and Mr. Robert E. Joyal resigned from our Board, including, in the case of Mr. Beck, from his position as Chairman of our Board. Acting upon the recommendation of the Nominating and Corporate Governance Committee, our Board appointed ORIX's director nominees Mr. Freeland, Mr. Koyanagi and Mr. Nishigori to our Board to fill the vacancies caused by the resignation of Mr. Beck, Mr. Boehm and Mr. Joyal, respectively. Mr. Freeland was also appointed to serve as the Chairman of our Board.
In accordance with the NYSE listing standards, our Board evaluates the independence of directors at least annually and when a change in circumstances could potentially impact the independence of one or more directors. Most recently, our Board evaluated the independence of our directors in connection with the Company's implementation of the corporate governance changes related to the ORIX Transaction described above. Following this evaluation, the Board concluded that all nine directors are independent directors in accordance with the NYSE listing standards, SEC rules and regulations and our Corporate Governance Guidelines.
During fiscal year 2017, our Board held 14 meetings. Each of our directors attended all of the meetings of our Board and the Board Committees on which he or she serves, except for Mr. Falk who attended 13 of 14 Board meetings, Mr. Clarke who attended 12 of 14 Board meetings and the ORIX director designees, Mr. Freeland, Mr. Koyanagi, Mr. Nishigori, and the Independent Director, Mr. Wong, each of whom joined our Board on July 26, 2017. Each of Mr. Freeland, Mr. Koyanagi, Mr. Nishigori and Mr. Wong attended all of the meetings of our Board and the Board Committees on which they serve that were held after the date on which they joined our Board. In addition, on May 8, 2017, the Company held its 2017 Annual Meeting of Stockholders. All of our then-serving Board members were present at the meeting.
Our Board has the authority to appoint committees consisting of one or more directors with such powers and authority in the management of the business and affairs of the Company as the Board may determine, subject to our Fourth Amended and Restated By-Laws and applicable law. Our Board has established an Audit Committee, a Compensation Committee, a Nominating and Corporate Governance Committee and an Investment Committee.
Pursuant to the Governance Agreement, Additionally, (i) the Compensation Committee, Nominating and Corporate Governance Committee and all other Board Committeescommittees (other than the Audit Committee) must consist of two directors designated by the members of our Board that were not designated by ORIX and one director designated by ORIX and (ii) the Audit Committee must consist of two directors designated by the members of our Board that were not designated by ORIX and the Independent ORIX Director.
Audit Committee. TheOn April 13, 2020, the Company has a separately designated standing Audit Committee established in accordance with the Exchange Act and the NYSE listing standards. The members of the Audit Committee are Mr. Clarke, Mr. Falk, Mr. Granot and Mr. Wong, who was appointed to serve on the Audit Committee pursuantORIX entered into an amendment (the “Amendment”) to the Governance Agreement in connection with his appointment as Independent Director uponthat facilitated the closingexpansion of the ORIX Transaction. All membersBoard of Directors in order to allow the addition of Mr. Angel as a director prior to his retirement as CEO of the Audit Committee are independent in accordanceCompany on July 1, 2020. See “Transactions with and otherwise satisfy the requirements of, the NYSE listing standards and Rule 10A-3 under the Exchange Act. The Board has determined that Mr. Falk, the Chair of the Audit Committee, qualifies as an "audit committee financial expert" as defined by SEC rules and that each member of the Audit Committee is financially literate. Mr. Falk also serves on the audit committees of three other companies publicly traded in the U.S. Our Board has determined that Mr. Falk’s simultaneous service on these audit committees does not impair his ability to serve effectively on the Audit Committee.
The Audit Committee selects, on behalf of our Board, an independent public accounting firm to be engaged to audit our financial statements, discusses with the independent registered public accounting firm its independence, reviews and discusses the audited financial statements with the independent registered public accounting firm and manages and reviews our compliance with legal and regulatory requirements with respect to accounting policies, internal controls and financial reporting.
In fiscal year 2017, the Audit Committee continued its oversight of a procedure established by the CompanyRelated Persons” below for receiving and addressing anonymous complaints regarding financial or accounting irregularities, among other things. The Audit Committee also manages an ethics and compliance hotline maintained by an independent third party and accessible through the Internet and by telephone. The information received by the hotline is treated as confidential and anonymous and is reviewed by an agent of the Audit Committee before any relevant information concerning unethical behavior or noncompliance with legal, regulatory or internal policy requirements is reported to the Audit Committee.
The Audit Committee held four meetings in fiscal year 2017. Furtherfurther information concerning the
Audit Committee is set forth below underORIX Transaction, the
heading "Audit Committee Report". The charterGovernance Agreement and the Amendment.In November 2022, ORIX sold 4,312,500 shares pursuant to an underwritten secondary offering, resulting in it and its affiliates collectively owning 11.9% of the Audit Committee, as amended on August 5, 2016, is available on the Company’s website at www.ormat.com. The contentsvoting power of our website, however, are not part of this proxy statement.
On February 22, 2018,outstanding voting securities. ORIX now has the right to nominate one director to our Board, appointed Mr. Sternbut no longer has the right to serve on the Audit Committee, effective upon the conclusion of Mr. Clarke's tenure as a director ofjointly propose and nominate with the Company and member of the Audit Committee at the 2018 Annual Meeting of Stockholders.
Compensation Committee. The Company has a separately designated standing Compensation Committee established in accordance with the Exchange Act and the NYSE listing standards. The members of the Compensation Committee are Ms. Barniv, who serves as the Chair of the Compensation Committee, Mr. Falk, Mr. Freeland, who was appointed to serve on the Compensation Committee pursuantIndependent ORIX Director. Pursuant to the Governance Agreement,
ORIX was required to use its reasonable best efforts to cause two of the directors nominated by it to tender their resignations, unless a majority of the directors other than the directors appointed by ORIX agreed in
connection with his appointmentwriting that such directors were not required to
resign. A majority of the members of our Board
upon the closingagreed that none of the
directors nominated by ORIX
Transaction,were required to resign following the offering in 2023 and
that such directors could continue to serve on our Board until the 2024 Annual Meeting.For the Annual Meeting, ORIX has proposed the nomination of one director, Mr. Granot. All members ofNikkel. ORIX additionally has the right to appoint one member to the Compensation Committee, are independent in accordance with SEC rules and regulations, the NYSE listing standards and Section 162(m) of the Internal Revenue Code of 1986, as amended ("Section 162(m)").
The Compensation Committee operates pursuant to a written charter adopted by the Board, which sets forth the duties and responsibilities of the Compensation Committee, which include (i) annual review of corporate goals and objectives relevant to the compensation of our CEO and other executive officers and evaluation of the performance of our CEO and other executive officers in light of these goals and objectives, individual achievements of our CEO and other executive officers and the compensation of similarly situated executive officers at comparable companies, (ii) approval and recommendation to our Board for approval of the compensation of our CEO and other executive officers based on this evaluation and (iii) periodic review and approval of all elements of our CEO's and other executive officers' compensation, including cash-based and equity-based awards and opportunities, any employment agreements and severance agreements, any change in control agreements and any special or supplemental compensation and benefits for our CEO and other executive officers.
The Compensation Committee's duties and responsibilities also include:
| · | making recommendations to our Board as to changes in Ormat’s general compensation philosophy; |
| · | making recommendations to our Board with respect to the adoption, amendment, termination or replacement of incentive compensation, equity-based plans or other compensation plans, policies and programs; |
| · | overseeing the development and implementation of such incentive compensation, equity-based plans or other compensation plans, policies and programs; |
| · | establishing performance goals and metrics under any such plan, policy or program and certifying attainment of any such performance goals and metrics, including for purposes of Section 162(m); and |
| · | monitoring Ormat's compliance with SEC rules and regulations regarding stockholder approval of certain executive compensation. |
The Compensation Committee is authorized to establish subcommittees for the purpose of evaluating special or unique matters and may delegate its authority to a subcommittee or subcommittees.
The Compensation Committee held three meetings in fiscal year 2017. The charter of the Compensation Committee, as amended on August 5, 2016, is available on the Company’s website at www.ormat.com. The contents of our website, however, are not part of this proxy statement.
Nominating and Corporate Governance Committee. The Company has a separately designated standing Nominating and Corporate Governance Committee,
established in accordance withInvestment Committee and ESG Committee, and the
NYSE listing standards. The membersBoard has, upon the recommendation of the Nominating and Corporate Governance Committee
are Ms. Barniv,determined not to change the composition of certain of these committees following the Annual Meeting, assuming the election of all director nominees (specifically, with Mr.
Falk,Nikkel to continue serving on the Compensation Committee and Investment Committee, and ORIX declining to use its right to appoint Mr.
Freeland, who was appointedNikkel to
serve as the Chair of the Nominating and Corporate Governance Committee
pursuant toand the
ESG Committee). For more information, see the second table under “Board Committees” above.HOW OUR BOARD EXERCISES OVERSIGHT
The Board directs and oversees the management of the business and affairs of the Company in a manner consistent with the best interests of the Company and its stakeholders and focusing on multiple factors.
ORMAT TECHNOLOGIES, INC. | 2024 PROXY STATEMENT 28
Strategy
The Board takes an active role in assisting management with the development of the Company’s strategy, strategic oversight of operations, and financial and investment activities. In accordance with our Corporate Governance Agreement in connection with his appointmentGuidelines, at least one Board meeting annually is devoted to our Board upon the closing of the ORIX Transaction, and Mr. Granot. All members of the Nominating and Corporate Governance Committee are independent in accordance with SEC rules and regulations and the NYSE listing standards.
The Nominating and Corporate Governance Committee assists our Board in fulfilling its responsibilities by developing criteria and qualifications for Board membership, identifying and approving individuals who meet such criteria and are qualified to serve as members of our Board, selecting director nominees for our annuallong-term business strategy. At these meetings, of stockholders and developing and recommending to our Board corporate governance guidelines and monitoring compliance with such guidelines.
The Nominating and Corporate Governance Committee considers the appropriate size of the Board and whether any vacancies onmanagement discuss the Board are expected due to retirement or otherwise. In the event that vacancies are anticipated, or otherwise arise, the Nominatingcompetitive landscape in our industry, emerging technologies, significant business risks and Corporate Governance Committee considers potential director candidates. Candidates may come to the attentionopportunities, and strategic priorities of the NominatingCompany. Specific short- and Corporate Governance Committee through current Board members, professional search firms, stockholders or other persons. The Nominating and Corporate Governance Committee is responsible for conducting appropriate inquiries into the backgrounds and qualifications of potential director candidates and their suitability for service on our Board.
The Nominating and Corporate Governance Committee develops guidelines that set forth the criteria and qualifications for Board membership, including, but not limited to, minimum individual qualifications, relevant career experience and technical skills, education, industry knowledge and experience, financial expertise, geographic ties, familiarity with the Company's business, independence under applicable SEC rules and regulations and the NYSE listing standards, diversity and ability to work collegially with others. The Nominating and Corporate Governance Committee uses these guidelines to identify, interview and evaluate potential director candidates to determine their qualifications to serve on our Board as well as their compatibility with the culture of the Company, its philosophy and its then-current Board and management.
The Nominating and Corporate Governance Committee will evaluate director candidates recommended by stockholders in the same manner in which the Nominating and Corporate Governance Committee evaluates any other director candidate.
Our Fourth Amended and Restated By-Laws provide that our stockholders may nominate director candidates for election to our Board at an annual meeting, provided that the nominating stockholder (i) follows the notice procedures set forth in the Fourth Amended and Restated By-Laws, (ii) was a stockholder of record at the time of giving notice of the proposed nomination and (iii) is entitled to vote at the annual meeting and follows the notice procedures. To be timely, a stockholder’s notice for the 2018 Annual Meeting of Stockholders must have been delivered to the Corporate Secretary at 6225 Neil Road, Reno, Nevada 89511, not earlier than the close of business on January 8, 2018 and no later than the close of business on February 7, 2018.
The Nominating and Corporate Governance Committee held five meetings in fiscal year 2017. The charter of the Nominating and Corporate Governance Committee, as amended on August 5, 2016, is available on the Company’s website at www.ormat.com. The content of our website, however, is not part of this proxy statement.
Investment Committee. The Company has a separately designated standing Investment Committee. The members of the Investment Committeelong-term strategic plans are Ms. Barniv, Mr. Granot, who serves as the Chair of the Investment Committee, and Mr. Nishigori, who was appointed to serve on the Investment Committee pursuant to the Governance Agreement in connection with his appointment to our Board upon the closing of the ORIX Transaction. All members of the Investment Committee are independent.
The Investment Committee assists our Board in evaluating and determining the hedging transactions that we may enter into to hedge our exposure to certain risks and makes recommendations as to the investment of our cash and cash-equivalents, all in accordance with the Investment Policy adopted by our Board.
The Investment Policy outlines general guidelines for investment by the Company, including the type and amount of investment, the desired time period for the investment, and the authority to and procedures for making the investment, and meetsalso discussed on an as-needed basis as instructed bythroughout the year, and our Board. The Investment Committee does not operate pursuant to a charter and instead acts in accordance with the Investment Policy and other instructions and guidelines outlined by our Board.
The Investment Committee held one meeting in fiscal year 2017.
Special Committee. During fiscal year 2017, the Board established and empowered a special committee of the Board comprised of independent directors Messrs. Falk, Granot and Stern to evaluate and negotiate the terms of the ORIX Transaction on behalf of the Company.
The special committee engaged independent legal advisors and each of the CCA, Governance Agreement and RRA between ORIX and the Company were executed by the Company following the unanimous recommendation of the special committee.
This special committee held 19 meetings in fiscal year 2017.
Majority Voting for DirectorsOur Third Amended and Restated Certificate of Incorporation provides that directors shall be elected by a majority of all votes cast for each of the director nominees at an annual meeting of stockholders, except for contested elections in which there are a greater number of director candidates than there are seats to be filled on our Board, in which case the directors shall be elected by a plurality vote. This means that, in a contested election, the director nominees who receive the greatest number of votes of the shares of our Common Stock entitled to vote at the annual meeting will be electedsenior management team regularly reports to the Board as directors. As described above, our Board is classified into three classes of directors serving staggered three-year terms. At each annual meeting of stockholders, the successors of the class of directors whose term expires at that meeting shall be elected by a majority of all votes cast for each of the director nominees at such meeting, to hold office for a term expiring at the annual meeting of stockholders held in the third year following the year of their election.
Compensation Committee Interlocks and Insider ParticipationNo member of the Compensation Committee is a current or former officer or employee of the Company. Mr. Freeland, who was appointed to our Board and to serve on the Compensation Committee in accordance with the Governance Agreement upon the closing of the ORIX Transaction, is an officer of ORIX, the holder of approximately 22.1% of the outstanding sharesexecution of our Common Stock aslong-term strategic plans, the status of March 16, 2018. See "CORPORATE GOVERNANCE—Overview" aboveimportant projects and "TRANSACTIONS WITH RELATED PERSONS" below for additional information concerning the ORIX Transaction.
In fiscal year 2017, none of our executive officers served on the board of directors or compensation committee of any other company that has an executive officer serving on our Board or the Compensation Committee.
Code of Business Conduct and EthicsOur Code of Business Conduct and Ethics is available on our website at www.ormat.com. The contents of our website, however, are not part of this proxy statement. You may also request a printed copy of our Code of Business Conduct and Ethics free of charge, by writing to the Company at the address appearing in this proxy statement or by calling us at (775) 356-9029.
Corporate Governance GuidelinesOur Board has adopted Corporate Governance Guidelines, which are available on the Company’s website at www.ormat.com. The contents of our website, however, are not part of this proxy statement. You may also request a printed copy of our Corporate Governance Guidelines free of charge, by writing to the Company at the address appearing in this proxy statement or by calling us at (775) 356-9029.
Stockholder Communications with the BoardStockholders and other interested parties may communicate with our Board or a specific director or directors by writing c/o the Corporate Secretary, Ormat Technologies, Inc., 6225 Neil Road, Reno, Nevada 89511. Communications received from stockholders are forwarded directly to Board members.
Board's Role in Risk Oversight
As part of our Board's quarterly meetings, our Board assesses on an ongoing basis the risks faced by the Company in executing its business plans. These risks include financial, industrial, technological (including cybersecurity exposuresinitiatives, and the steps management has taken or plans to take with respect to these exposures), competitivekey opportunities and operational risks and exposures, both from a global perspective and on a power plant-by-power plant basis.
Our Board dedicates time at each of these meetings to review and consider the relevant risks that need to be addressed at the time of each Board meeting. Our CEO presents to the Board at each quarterly meeting a report outlining, among other things, operational risks faced byfacing the Company. Similarly, our CFO presents to the Board at each quarterly meeting a report outlining the financial risks faced by the Company. In addition to the full Board, the Audit Committee and Investment Committee play an important role in the oversight of the Company’s policies with respect to financial risk assessment and risk management, as well as assessing the Company's major financial risk exposures.
Risk Oversight
Our Board'sBoard’s role in risk oversight at the Company is consistent with the Company'sCompany’s leadership structure, with the CEO and other members of senior management having responsibility for assessing and managing the Company'sCompany’s risk exposures, and our Board and its Committeescommittees providing oversight in connection with those efforts and attempts to mitigate identified risks.
TheOur Board assesses on an ongoing basis the risks faced by the Company in executing its business plans, in part based on regular updates from management and its committees on such risks and the related risk mitigation measures. Updates from management include quarterly reports by our CEO and CFO outlining operational risks and financial risks, respectively. Our Audit Committee consists solelyoversees the Board’s responsibilities relating to cybersecurity risks, and is informed of such risks through reports from our Chief Information Officer on at least an annual basis. ESG and climate change considerations are factored into the business strategy through the recognition of risks and opportunities.
While our full Board is ultimately responsible for oversight of risk management, its committees critically assist the Board in fulfilling its monitoring responsibilities in certain areas of risk, as shown below.
| Board/Committee | | Key Areas of Risk Oversight |
| Entire Board | | • Strategic, financial, industrial, competitive and operational risks and exposures; • Technological risks, including cybersecurity and information technology risks and developments; • Litigation and regulatory exposures; • Climate change, social and other ESG related risks, strategies and approach; and • Other current matters that may present material risk to our operations, plans, prospects or reputation, both from a global perspective and on a power plant-by-power plant basis. |
| Audit Committee | | • Risks and exposures associated with financial matters, including financial reporting, tax, accounting, and disclosure; • Audit oversight; • Internal control over financial reporting (including the internal controls related to ESG disclosures and metrics); • Internal audit; and • Cybersecurity and information technology risks and developments. |
| Compensation Committee | | • Risks relating to whether compensation plans, policies and practices are likely to have a material adverse effect on the Company; and • Risks relating to alignment of compensation with Company performance goals and appropriate balance between different types of compensation. |
| Investment Committee | | • Financial risk exposures, particularly risks and exposures associated with cash investment guidelines, financial risk policies and hedging activities. |
| ESG Committee | | • ESG risks and opportunities, including climate-related risks and opportunities |
Management Succession Planning
We believe succession planning, including succession in the event of an emergency or retirement of our CEO, is an important function of the Board. The Nominating and Corporate Governance Committee, with input from our CEO, is responsible for identifying possible successors to our CEO and developing a succession plan, which includes, among other things, an assessment of the experience, performance and skills for possible successors to the CEO. As provided by our Corporate Governance Guidelines, the plan is annually reviewed by the entire Board.
ORMAT TECHNOLOGIES, INC. | 2024 PROXY STATEMENT 29
Stockholder Engagement
Stockholder engagement is fundamental to our commitment to good governance. We engage regularly with our investors to share updates on our strategic, financial and operating performance, and to listen to valuable feedback on issues our Stockholders care about most. Additionally, at least once a year our management invites the Company’s largest stockholders to engage in a dialogue regarding governance, compensation, sustainability and other matters important to them. Management reports on the conversations with those investors to the Board and also, as appropriate, to the Compensation Committee.
|Ormat’s 2022 Analyst Day, New York
Participants In 2023, the Company took an integrated approach to its stockholder engagement efforts. The Company approached stockholders, with an offer to meet by phone, representing more than 77% of the Company’s outstandingshares. |  | Topics Discussed • Governance • Financial matters • Sustainability matters • ESG • Executive compensation matters |  | Actions Taken The stockholder engagement program continues to influence and inform the Company’s policies and practices. • In the past few years, based in part on investor input, the Company has provided additional disclosure in its Sustainability Report. • Beginning in 2020, the Company has adjusted its compensation practices in response to stockholder feedback. |
Communicating with our Board
Stockholders and other interested parties may communicate with a member or members of our Board, including the chairman of the Board, chair of the Audit, Compensation or Nominating and Corporate Governance Committees or to the non-management or independent directors as requireda group by addressing such communications to the Corporate Secretary, Ormat Technologies, Inc., 6140 Plumas St., Reno, Nevada 89519. Such communications received from stockholders may be done confidentially or anonymously. Complaints or concerns relating to our financial reporting, accounting, internal accounting controls or auditing will be referred to the Chair of our Audit Committee. Correspondence will then be directed to the group of directors, or to an individual director, as appropriate.
ORMAT TECHNOLOGIES, INC. | 2024 PROXY STATEMENT 30
DIRECTOR COMPENSATION
FISCAL 2023 NON-EMPLOYEE DIRECTOR COMPENSATION PROGRAM
The compensation of our non-employee directors for Fiscal 2023 was as follows:
| Annual Board Retainer | | $95,000 and an annual equity grant with a value of $120,000* |
| Annual Retainer for Non-Employee Chairman of the Board | | $100,000 consisting of a $40,000 cash retainer and an equity grant with a value of $60,000* |
| Annual Cash Retainer Committee Chair | | $10,000, except $20,000 for Audit Committee |
| * | Equity grant is in the form of RSUs, with the actual number of RSUs based on the closing price of our Common Stock on the next business day following the date of grant. The RSUs vest in full on the first anniversary of the grant date. |
We also promptly reimburse all directors for transportation and in compliance with SOX, SEC rules and regulationslodging expenses actually incurred to attend meetings of our Board or committees.
The timing of compensation and the NYSE listing standards. The Audit Committee operates pursuantannual equity grants to a written charter adopted bynon-employee directors runs from the Board.
The Audit Committee is responsible for assisting the Board in its oversight responsibilities related to accounting policies, internal controls, financial reporting and legal and regulatory compliance. Management of the Company has the primary responsibility for the Company's financial reporting processes, principles and internal controls as well as the preparation of its financial statements. The Company’s independent registered public accounting firm is responsible for performing an audit of the Company's financial statements and expressing an opinion as to the conformity of such financial statements with accounting principles generally accepted in the United States.
The Audit Committee reviewed management's report on its assessment of the effectiveness of internal controls over financial reporting as of December 31, 2017 and the report from PricewaterhouseCoopers LLP on the effectiveness of internal control over financial reporting as of December 31, 2017.
As noted in the Company's Annual Report on Form 10-K for the year ended December 31, 2017, management, under the supervision and participation of the Chief Executive Officer and the Chief Financial Officer, has conducted an evaluation of the effectiveness of the Company's internal control over financial reporting as of December 31, 2017 using criteria established in Internal Control — Integrated Framework (2013) issued by the COSO and, based on this evaluation, concluded that the Company’s internal control over financial reporting was not effective as of December 31, 2017 as a result of the material weakness in its internal control over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatementtime of the Company’s annual or interim financial statements will not be prevented or detectedmeeting of stockholders rather than at the end of each fiscal year and cash retainers, which are paid quarterly, are based on a timely basis.
In connectionthe annual meeting cycle rather than the fiscal year-end cycle.The directors affiliated with ORIX at the change in the Company’s repatriation strategy and the related releasetime of the US income tax valuation allowance in the second quarter of 2017, the Company did not perform an effective risk assessment related to its internal controls over the accounting for income taxes. As a result, the Company identified a deficiency in the design of its internal control over financial reporting related to its accounting for income taxes, which affected the recording of income tax accounts by the Company in its interim and annual consolidated financial statements during 2017, including audit adjustments to the income tax accounts. This deficiency resulted in immaterial adjustments to income tax expense and deferred tax liabilities, but did not result in a material misstatement in its previously issued interim or annual consolidated financial statements nor does it require a restatement of or change in the Company’s consolidated financial statements for any prior interim or annual period. However, this control deficiency could result in a misstatementgrant of the aforementioned balances and disclosures that would result in a material misstatement to the interim or annual consolidated financial statements that would not be prevented or detected. Management has concluded that this deficiency constitutes a material weakness in the Company's internal control over financial reporting. Based upon the Audit Committee's review and discussions with management, the Company's internal auditors and PricewaterhouseCoopers LLP, the Audit Committee approved the inclusion of management's report on its assessmentequity portion of the effectivenessannual board retainers, Messrs. Nikkel and Takahashi, declined the grant of, internal control over financial reporting as of December 31, 2017 and thus were deemed never to have acquired, the report of the independent auditors in the Company's Annual Report on Form 10-KRSUs, which were subsequently cancelled for no value. They also forwent their cash compensation for the year ended December 31, 2017 filed with the SEC.
The Audit Committee also received and reviewed the periodic internal audit reports from the Company's internal auditor. The Audit Committee also reviewed the Internal Audit Plan for fiscal year 2017 and approved its main target subjects. The Audit Committee discussed with the Company's independent registered public accounting firm the overall scope and plans for its audits, and has met with such firm, with and without management present, to discuss the results of its examinations and its evaluations of the Company's internal controls. In addition, the Audit Committee evaluated the performance of the independent registered public accounting firm.
The Audit Committee has reviewed and discussed the Company's audited financial statements as of and for the year ended December 31, 2017 with management and the independent registered public accounting firm. The Audit Committee has discussed with the independent registered public accounting firm the matters required to be discussed under auditing standards generally accepted in the United States, including those matters required to be discussed by Statement on Auditing Standards No. 61 (Communications with Audit Committees), as amended. The independent registered public accounting firm has provided to the Audit Committee the written disclosures and the letter required by applicable requirements of the Public Company Accounting Oversight2023 Board (United States) regarding the independent registered public accounting firm's communications with the Audit Committee concerning independence, as currently in effect, and the Audit Committee has discussed with the auditors their independence from the Company. The Audit Committee has also considered whether the independent registered public accounting firm's provision of tax services to the Company is consistent with maintaining the registered public accounting firm's independence. The Audit Committee has concluded that the independent registered public accounting firm is independent from the Company and its management.
Based on the review and discussions described above, the Audit Committee recommended to the Board that the Company's audited financial statements be included in its Annual Report on Form 10‑K for the year ended December 31, 2017, for filing with the SEC.
Submitted on March 16, 2018 by the Audit Committee of Ormat Technologies, Inc.’s Board of Directors.
| Dan Falk, Chair
Robert F. Clarke
David Granot
Byron G. Wong
|
The foregoing Report of the Audit Committee of the Board of Directors shall not be deemed to be soliciting material or be incorporated by reference by any general statement incorporating by reference this proxy statement into any filing under the Securities Act of 1933, as amended (the "Securities Act"), or under the Exchange Act, except to the extent the Company specifically incorporates this information by reference, and shall not otherwise be deemed to be filed with the SEC under the Securities Act or the Exchange Act.
Term.The following table sets forth the name, agetotal compensation paid to each member of our Board during Fiscal 2023:
| Name | | Fee Earned or
Paid in Cash ($) | | Stock
Awards($)(1) | | Total ($) |
| Isaac Angel | | 135,000 | | 180,000 | | 315,000 |
| Karin Corfee | | 105,000 | | 120,000 | | 225,000 |
| David Granot | | 105,000 | | 120,000 | | 225,000 |
| Michal Marom | | 115,000 | | 120,000 | | 235,000 |
| Mike Nikkel(2) | | — | | — | | — |
| Dafna Sharir | | 105,000 | | 120,000 | | 225,000 |
| Stanley B. Stern | | 105,000 | | 120,000 | | 225,000 |
| Hidetake Takahashi(2) | | — | | — | | — |
| Byron G. Wong | | 95,000 | | 120,000 | | 215,000 |
| (1) | Represents the grant date fair value of RSU awards based on the closing price of our Common Stock on the next day of business following the date of grant, computed in accordance with Topic 718. For a summary of the assumptions made in the valuation of the awards, please see Note 14 to the Consolidated Financial Statements in our Annual Report on Form 10-K for Fiscal 2023. Each RSU represents the right to receive one share of Common Stock upon vesting. |
| (2) | Mr. Nikkel and Mr. Takahashi, who are each affiliated with ORIX, elected to forgo all of their compensation for Fiscal 2023. |
The following table provides the aggregate number as of December 31, 2023 of unexercised options and position(s)SARs and unvested RSUs outstanding for each of eachour non-employee directors who served during Fiscal 2023.
| Name | | Unexercised Options
Outstanding | | Unexercised SARs
Outstanding | | Unvested RSUs
Outstanding |
| Isaac Angel | | — | | — | | 2,170 |
| Karin Corfee | | — | | — | | 1,447 |
| David Granot | | — | | 2,525 | | 1,447 |
| Michal Marom | | — | | — | | 1,447 |
| Mike Nikkel | | — | | — | | — |
| Dafna Sharir | | — | | 4,146 | | 1,447 |
| Stanley B. Stern | | — | | 4,146 | | 1,447 |
| Hidetake Takahashi | | — | | — | | — |
| Byron G. Wong | | 7,500 | | 2,525 | | 1,447 |
ORMAT TECHNOLOGIES, INC. | 2024 PROXY STATEMENT 31
PROPOSAL 2
ADVISORY VOTE ON EXECUTIVE COMPENSATION
Under Section 14A of the Exchange Act and pursuant to SEC rules and regulations, we are required to hold an advisory stockholder vote to approve the compensation of our named executive officers:
officers at least every three years. At our 2023 Annual Meeting of Stockholders, our stockholders voted to hold the non-binding stockholder vote to approve the compensation of our named executive officers every year. Accordingly, the Company currently intends to hold such votes annually. The next such non-binding vote on executive compensation will be held at the Company’s 2025 Annual Meeting of Stockholders.The present vote to approve the compensation of our named executive officers is advisory and therefore not binding on the Company, our Board or our Compensation Committee. However, participating in such vote is an important mechanism by which our stockholders may convey their views about our executive compensation programs and policies. Our Board and Compensation Committee value stockholder input on these matters and will consider the results of this advisory vote, among other factors, in making future decisions about executive compensation for our named executive officers.
This vote relates to the compensation of our named executive officers as disclosed in the following sections of this Proxy Statement:
| • | the information set forth in “Compensation Discussion and Analysis” on pages 33 to 44, which describes our compensation objectives and the various elements of our compensation program and policies applicable to our named executive officers; and |
| • | the accompanying tables, narrative disclosures and other information on pages 45 to 53, which describe how we have compensated our named executive officers. |
As described in detail in “Compensation Discussion and Analysis,” our executive compensation program is designed to attract and retain highly qualified executive officers and to incentivize superior performance. We believe that our executive compensation program directly links executive compensation with our performance and aligns the interests of our executive officers with those of our stockholders.
This vote is not intended to address any specific item of compensation or any specific named executive officer, but rather the overall compensation of all of our named executive officers and the philosophy, policies and practices described in this Proxy Statement. Accordingly, we recommend that our stockholders vote upon the following resolution at the Annual Meeting:
“RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the ‘Compensation Discussion and Analysis’, compensation tables and related narrative discussion, is hereby APPROVED.”
Approval of the compensation of our named executive officers on an advisory basis requires the affirmative vote of the holders of a majority of the voting power of our shares present in person or represented by proxy and entitled to vote on the matter. Abstentions will count as votes “against” and “broker non-votes” will have no effect on the outcome of this proposal.
 | OUR BOARD RECOMMENDS THAT YOU VOTE “FOR” THE APPROVAL, ON A NON-BINDING AND ADVISORY BASIS, OF THE COMPENSATION PAID TO OUR NAMED EXECUTIVE OFFICERS AS DISCLOSED IN THIS PROXY STATEMENT. |
ORMAT TECHNOLOGIES, INC. | 2024 PROXY STATEMENT 32
COMPENSATION DISCUSSION AND ANALYSIS
This Compensation Discussion and Analysis is designed to provide our stockholders with a clear understanding of our compensation philosophy and objectives, compensation-setting process and the Fiscal 2023 compensation of our named executive officers (“NEOs”). For 2023, our NEOs were:
 |  |
Zvi Krieger | 62 |
| OFER BEN YOSEF | JESSICA WOELFEL |
Executive Vice President—Electricity Segment*President | General Counsel, |
Shlomi Argas—Energy Storage and | 53 | Executive Vice President—Operations and Products*
Chief Compliance Officer |
Bob Sullivan | 55 | Executive Vice President—Business Development Sales | and MarketingCorporate Secretary |
ORMAT TECHNOLOGIES, INC. | 2024 PROXY STATEMENT 33
EXECUTIVE SUMMARY
2023 Highlights
During Fiscal 2023, we successfully executed our strategic plan by expanding our portfolio and improving our operational performance.
We believe that the Fiscal 2023 compensation of our NEOs appropriately reflects and rewards their significant contributions to the Company’s strong performance during a year that presented unique and unprecedented challenges for our executive team to manage.
ORMAT TECHNOLOGIES, INC. | 2024 PROXY STATEMENT 34
| Back to Contents | | *Performs the functions described in the table, but is employed solely by Ormat Systems Ltd., a subsidiary of the Company ("Ormat Systems"). |
Isaac Angel. Isaac Angel began serving as an officer of the Company on April 1, 2014 and has served as our CEO since July 1, 2014. From 1999 to 2006, he served in various positions at Lipman Electronic Engineering Ltd., including as its President and CEO. After the acquisition of Lipman by VeriFone in 2006, Mr. Angel served as Executive Vice President, Global Operations of VeriFone from 2006 to 2008. From 2008 to 2009, Mr. Angel served as Executive Chairman of LeadCom Integrated Solutions Ltd. Mr. Angel served as a director of Retalix Ltd. from 2012 until 2013 and has served as a director of Frutarom Ltd. since 2008 until 2016.
Doron Blachar. Doron Blachar has served as our CFO since April 2, 2013. From 2009 to 2013, Mr. Blachar was the CFO of Shikun & Binui Ltd. From 2011 to 2013, Mr. Blachar served as a director of A.D.O. Group Ltd., a TASE-listed company. From 2005 to 2009, Mr. Blachar served as Vice President – Finance of Teva Pharmaceutical Industries Ltd. From 1998 to 2005, Mr. Blachar served in a number of positions at Amdocs Limited, including as Vice President – Finance from 2002 to 2005. Mr. Blachar earned a BA in Accounting and Economics and an MBA from Tel Aviv University. He is also a Certified Public Accountant in Israel.
Zvi Krieger.Zvi Krieger has served as our Executive Vice President—Electricity Segment since July 9, 2014. Mr. Krieger served as our Executive Vice President of Geothermal Resource from November 2009 to June 2014, as our Senior Vice President of Geothermal Engineering from 2007 to 2009 and as our Vice President of Geothermal Engineering from 2004 to 2007. From 2001 to 2004, Mr. Krieger served as Vice President of Geothermal Engineering at Ormat Industries Ltd. Mr. Krieger has served in a number of roles for Ormat Industries Ltd. with increasing responsibility since 1981, including as Application Engineer, Manager of System Engineering, Director of New Technologies Business Development and Vice President of Geothermal Engineering. Mr. Krieger earned a BS in Mechanical Engineering from the Technion – Israel Institute of Technology in 1980.
Shlomi Argas. Shlomi Argas has served as our Executive Vice President—Operations and Products since January 1, 2018. From July 9, 2014 to December 31, 2017, Mr. Argas served as our Executive Vice President—Projects and was responsible for management of Geodrill, our drilling company. From 2009 until June 2014, Mr. Argas served as our Vice President responsible for management of geothermal projects and Recovered Energy Generation (REG) projects. From 2006 to 2009, Mr. Argas served as Manager of the REG Projects Department, responsible for the design and installation of REG power plants. From 1994 to 2006, Mr. Argas served in our Product Engineering Department as a Product Engineer. Mr. Argas earned a BS in Mechanical Engineering from Ben-Gurion University in 1992 and a Certificate from the Technology Institute of Management, Executive Management Program.
Bob Sullivan. Bob Sullivan has served as our Executive Vice President—Business Development, Sales and Marketing since January 1, 2015. From 2009 to 2015, Mr. Sullivan served as our Vice President and then Senior Vice President of Business Development, responsible for policy, marketing, sales and project development in North America. From 2007 to 2009, Mr. Sullivan served as Project Manager. From 2006 until 2007, Mr. Sullivan served as our Operations Director, North America. Mr. Sullivan joined the Company in 2003, then serving as a Plant Manager. He is a graduate of the U.S. Navy’s Nuclear Power School and earned a BS in Business from Capella University.
On February 15, 2018, Hezi Kattan was appointed to serve as our Chief Compliance Officer and General Counsel in accordance with the Governance Agreement. Effective February 15, 2018, Mr. Kattan will be a member of the Company’s management team, responsible for managing compliance risks and controls throughout the Company. Mr. Kattan will report to our CEO, generally, and directly to the Audit Committee with respect to his compliance function.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENTThe following table shows information with respect to the beneficial ownership of our Common Stock as of March 16, 2018 for:
● each person, or group of affiliated persons, known to us to own beneficially 5% or more of our outstanding Common Stock;
● each of our directors;
● each of our NEOs; and
● all of our directors and executive officers as a group.
Percentage ownership is based on 50,609,051 shares of Common Stock outstanding as of March 16, 2018. Except as indicated by footnote and subject to community property laws where applicable, to our knowledge, the persons named in the table below have sole voting and investment power with respect to all shares of Common Stock shown as beneficially owned by them.
| | | Shares of
Common Stock
Beneficially Owned | |
| Principal Stockholder | | Number | | | Percent | |
| ORIX Corporation | | | 10,988,577 | (1) | | | 21.71 | % |
| Migdal Insurance & Financial Holdings Ltd. | | | 4,115,782 | (2) | | | 8.13 | % |
| The Vanguard Group | | | 3,180,154 | (3) | | | 6.28 | % |
| Clal Insurance Enterprises Holdings Ltd. | | | 2,551,430 | (4) | | | 5.04 | % |
| Directors and NEOs | | | | | | | | |
Ravit Barniv†† | | | 15,000 | (5) | | | * | |
Robert F. Clarke†† | | | 9,500 | (6) | | | * | |
Dan Falk†† | | | 15,000 | (7) | | | * | |
Todd C. Freeland†† | | | 0 | | | | * | |
David Granot†† | | | 15,000 | (8) | | | * | |
Stan H. Koyanagi†† | | | 0 | | | | * | |
Yuichi Nishigori†† | | | 0 | | | | * | |
Stanley B. Stern†† | | | 15,000 | (9) | | | * | |
Byron G. Wong†† | | | 0 | | | | * | |
Isaac Angel† | | | 50,000 | (10) | | | * | |
Doron Blachar† | | | 42,500 | (11) | | | * | |
Zvi Krieger† | | | 0 | | | | * | |
Shlomi Argas† | | | 0 | | | | * | |
Bob Sullivan†† | | | 44,957 | (12) | | | * | |
| Directors and NEOs as a group | | | 254,957 | (13) | | | 0.5 | % |
__________
† c/o Ormat Systems Ltd., Industrial Area, P.O. Box 68 Yavne 81100, Israel
†† c/o Ormat Technologies, Inc., 6225 Neil Road, Reno, Nevada 89511
* Represents beneficial ownership of less than 1% of the outstanding shares of Common Stock.
(1) | Based on Schedule 13D filed with the SEC on August 3, 2017 by ORIX. ORIX's address is Hamamatsucho Building, 1-1-1 Shibaura, Minato-ku, Tokyo 105-0023, Japan. |
(2) | Based on Schedule 13G filed with the SEC on January 22, 2018 by Migdal Insurance & Financial Holdings Ltd. ("Migdal"). Includes, as of December 31, 2017, (i) 3,932,944 shares held for members of the public through, among others, provident funds, mutual funds, pension funds and insurance policies, which are managed by subsidiaries of Migdal, according to the following segmentation: 2,166,673 shares are held by profit participating life assurance accounts, 1,579,667 shares are held by provident funds and companies that manage provident funds and 186,604 shares are held by companies for the management of funds for joint investments in trusteeship, each of which subsidiaries operates under independent management and makes independent voting and investment decisions, and (ii) 182,838 shares beneficially held for Migdal's account (Nostro account). Migdal's address is 4 Efal Street; P.O. Box 3063; Petach Tikva 49512, Israel.
|
(3) | Based on Schedule 13G/A (Amendment No. 2) filed with the SEC on February 9, 2018 by The Vanguard Group ("Vanguard"). Includes, as of December 31, 2017, 3,180,654 shares beneficially owned, consisting of 58,533 shares as to which Vanguard has sole voting power, 10,634 as to which Vanguard has shared voting power, 3,114,053 shares as to which Vanguard has sole dispositive power and 66,601 shares as to which Vanguard has shared dispositive power. Vanguard's address is 100 Vanguard Blvd., Malvern, PA 19355. |
(4) | Based on Schedule 13G filed with the SEC on January 17, 2018 by Clal Insurance Enterprises Holdings Ltd. ("Clal") and IDB Development Corporation Ltd. Includes, as of January 7, 2018, (i) 2,463,771 shares held for members of the public through, among others, provident funds and/or pension funds and/or insurance policies, which are managed by subsidiaries of Clal, which subsidiaries operate under independent management and make independent voting and investment decisions and (ii) 87,659 shares beneficially held for Clal's account. Clal's address is 36 Raul Walenberg St., Tel Aviv 66180, Israel. |
(5) | Includes 15,000 shares of Common Stock issuable to Ms. Barniv upon the exercise of options that are exercisable within 60 days of March 16, 2018. The options granted to Ms. Barniv have exercise prices that range between $35.15 and $47.46 per share of Common Stock and expire on different dates between January 6, 2023 and November 3, 2023. |
(6) | Includes (a) 2,000 shares of Common Stock purchased in the open market and (b) 7,500 shares of Common Stock issuable to Mr. Clarke upon the exercise of options that are exercisable within 60 days of March 16, 2018. The options granted to Mr. Clarke have an exercise price of $47.46 per share of Common Stock and expire on November 8, 2023. |
(7) | Includes 15,000 shares of Common Stock issuable to Mr. Falk upon the exercise of options that are exercisable within 60 days of March 16, 2018. The options granted to Mr. Falk have exercise prices that range between $38.24 and $47.46 per share of Common Stock and expire on different dates between November 3, 2022 and November 8, 2023. |
(8) | Includes 15,000 shares of Common Stock issuable to Mr. Granot upon the exercise of options that are exercisable within 60 days of March 16, 2018. The options granted to Mr. Granot have exercise prices that range between $38.24 and $47.46 per share of Common Stock and expire on different dates between November 3, 2022 and November 8, 2023. |
(9) | Includes 15,000 shares of Common Stock issuable to Mr. Stern upon the exercise of options that are exercisable within 60 days of March 16, 2018. The options granted to Mr. Stern have exercise prices that range between $35.15 and $47.46 per share of Common Stock and expire on different dates between January 6, 2023 and November 8, 2023. |
(10) | Includes 50,000 stock appreciation rights ("SARs") to purchase shares of Common Stock issuable to Mr. Angel upon the exercise of options that are exercisable the within 60 days of March 16, 2018. The vesting period of these options was accelerated in connection with the ORIX Transaction and is subject to the Lockup Agreement that was entered into between the Company and Mr. Angel on May 4, 2017. The options granted to Mr. Angel have an exercise price of $42.87 per share of Common Stock and expire on June 14, 2022. |
(11) | Includes 42,500 SARs to purchase shares of Common Stock issuable to Mr. Blachar upon the exercise of options that are exercisable within 60 days of March 16, 2018. The vesting period of these options was accelerated in connection with the ORIX Transaction and is subject to the Undertaking that was entered into between the Company and Mr. Blachar on May 4, 2017. The options granted to Mr. Blachar have an exercise price of $42.87 per share of Common Stock and expire on June 14, 2022. |
(12) | Includes (a) 4,957 shares of Common Stock previously issued to Mr. Sullivan following exercise of options and (b) 40,000 SARs to purchase shares of Common Stock issuable to Mr. Sullivan upon the exercise of options that are exercisable within 60 days of March 16, 2018. The options granted to Mr. Sullivan have an exercise price of $23.34 per share of Common Stock and expire on June 4, 2019. |
(13) | Includes (i) 4957 shares of Common Stock and (ii) options (including SARs) to purchase 280,000 shares of Common Stock exercisable within 60 days of March 16, 2018 held by all of our directors and NEOs as a group. The options have exercise prices that range between $23.34 and $47.46 per share of Common Stock and expire on different dates between June 4, 2019 and November 8, 2023. |
COMPENSATION DISCUSSION AND ANALYSISCompensation Objectives and Design
The overall objective of our executive compensation program is to offer short-term, medium-term and long-term compensation componentselements that enable us to attract, motivate and retain talented executives who contribute to our continued success. Equally important to us is to align the interests of our executivesNEOs with those of our stockholders by designing our executive compensation program to "pay“pay for performance", includingperformance” and to incentivize the creation of stockholder value. As described below, the short-term component of our executive compensation packages consists of annual salary, the medium-term component consists of an annual bonus, and the long-term component consists of equity awards.
We aim to design executive compensation packages that like our general compensation policies, meet or exceed competitive compensation averages for executivesNEOs with similar responsibilities at companies with similar financial operating and industryoperating characteristics in similar locations. In most cases,2023 we dodid not benchmark to a particular industry or companies, but we informally considerconsidered published data, such as labor indices and compensation surveys, in formulating our executive compensation packages.packages and consulted with compensation consultants in both the United States and Israel.
The key features of our executive compensation program are summarized below.
| What We Do | | What We Don’t Do |
 | Design key elements of our compensation program to pay based on our financial and operating performance. | |  | Use financial or operational metrics that promote excessive risk-taking. |
| Use metrics important to our business in our incentive compensation plans and set challenging performance targets. | | | Provide preferential payments or above-market returns on any deferred compensation plan. |
| Use a variety of equity award structures, including PSUs and RSUs (as well as SARs and options historically), to tailor our compensation to our performance. | | | Provide excessive perquisites to our executive officers. |
| Regularly evaluate risk in light of our compensation programs. | | | Allow our executive officers, employees or directors to hedge or pledge our stock. |
| Cap the amount of our annual incentive pay at reasonable levels. | | | Re-price underwater options. |
| Promote long-term focus through multi-year vesting of our equity awards. | | | Pay tax gross-ups. |
| Grant PSU awards with a three-year performance period, and a four-year service period, based on challenging relative total shareholder return and Megawatts goals. | | | Pay out dividends or dividend equivalents on equity awards prior to vesting. |
| Maintain a formal claw-back policy applicable to our current and former executive officers. | | | Pay guaranteed bonuses. |
| Engage an independent compensation consultant. | | | Provide automatic salary increases. |
ORMAT TECHNOLOGIES, INC. | 2024 PROXY STATEMENT 35
Our executive compensation program consists of three elements, namely, annual salary, annual bonus and equity awards:
awards, with an emphasis on at-risk and/or long-term compensation| Element | 1. | Purpose | | Key Features |
| SHORT-TERM FIXED COMPENSATION |
Annual salary, which is paid monthly, is intended to provideSalary | | • Monthly cash compensation
• Provides a predictable annual income at a level consistent with the individualindividual’s contributions of our executive officers.officers | | See page 38 for more details |
| MEDIUM-TERM VARIABLE COMPENSATION |
| Management Plan | 2. | • Annual bonuses, which are paid annually tobonus opportunity based on challenging, pre-set performance metrics or other incentive- based compensation • Links our executive officers, are intended to link our executive officers'officers’ compensation to the Company'sCompany’s overall annual performance, as well as, in most cases, their individual achievements.achievement | | 2023 Metrics: • Company Performance Metrics (Revenue, Adjusted EBITDA)
• Quantitative individual performance criteria
• Qualitative CEO goals
|
| 3. | Equity | | No bonus paid unless net income is positive See pages 42-43 for more details |
| LONG-TERM EQUITY AWARDS: |
Mix of equity awards, are designedtypically granted each year, to promote long-term leadership and align the interests of our executive officers with those of our stockholders while their vesting schedule assists us |
| Performance Stock Units (PSUs) | | • Focuses executives on the achievement of specific long-term financial performance goals directly aligned with our operating and strategic plans
• Increased weight of PSUs (to approximately 60%) | | Vesting: 3-year performance period (4-year service period)
Performance Metrics:
• 50% relative TSR
• 50% Megawatts capacity targets
|
| | | | TSR Payout capped at 100% if absolute TSR is negative See pages 42-43 for more details |
| Restricted Stock Units (RSUs) | | • Assists in retaining our executive officers. Equity awards typically vest 25% on each of the one, two, three and four year anniversaries of the date of grant. All employees and consultants of the Company are eligibleexecutives to receive equity awards pursuant to our Amended and Restated 2012 Incentive Compensation Plan (the "2012 ICP"), effective as of and approved by the Company's stockholders on May 8, 2012. The termensure execution of our equity awards typically ranges from six to tenlong-term strategies | | Vesting: 4 years from the date of grant with respect to grants to our current executive officers. Except for equity awards granted to two of our current NEOs, there is no provision that provides for accelerated vesting upon a change in control and there is no holding period for vested options. |
EachWe determine each element is determined individually based on the relevant criteria described in this discussion.
In addition to these main compensation components, executivesour NEOs who are residents of Israel receive, as a function of their salary payments, the standard social benefits (i.e.,(namely, severance pay, defined contribution plan, and disability) paid to all of our employees who are based in Israel. These social benefits are fixed as a percentage of the employee'sNEO’s salary and are not subject to discretionary adjustments. ExecutivesNEOs who are residents of the U.S.United States participate in a defined contribution plan (401(k) plan) and receive health insurance benefits, in addition to social security.Social Security. We do not cover any tax payments or otherwise "gross-up" “gross-up” any part of the compensation packages of our executive officers regardless of their location.
ORMAT TECHNOLOGIES, INC. | 2024 PROXY STATEMENT 36
Views of our Stockholders
The Compensation Consultant
In September 2017,Committee is committed to regularly reviewing, assessing and, when appropriate, adjusting the Company’s compensation programs based on feedback from our stockholders, best practices and compensation trends. At our 2023 Annual Meeting of Stockholders, we received substantial support for our executive compensation program, with approximately 95% of the vote (excluding “broker non-votes”) for the approval of our annual “say-on-pay” proposal. We have ongoing discussions with many of our stockholders regarding our executive compensation program, and the Compensation Committee
engaged Moshe Zviran Ltd., a leading Israel-basedconsiders these discussions when reviewing our executive compensation
consulting firm ("Zviran"),program and will continue to
conduct a benchmark surveyconsider stockholder feedback and the results of
senior“say-on-pay” votes when making future decisions. The Compensation Committee believes the results of the fiscal 2023 “say-on-pay” vote convey positive stockholder support for its decisions on annual executive compensation
arrangements at comparable mid-cap and
energy sector companies, focusing onillustrate that the
following four elements: (i) base salary (or base management fees), (ii) other fixedCompany’s executive compensation
elements (suchprogram is aligned with our stated compensation philosophy and objectives and thus determined that significant changes to our executive compensation program were not warranted as
a result of the
valueoutcome of
usethe 2023 “say-on-pay” vote.COMPENSATION GOVERNANCE
Roles and Responsibilities
Role of a company car), (iii)the Compensation Committee
The Compensation Committee, which consists entirely of independent directors, oversees our executive compensation programs and met throughout Fiscal 2023. The Compensation Committee administers our annual cash bonus or other supplemental annual payments, and (iv)long-term equity incentive plans and reviews performance levels relevant to compensation. ZviranIt also decides the compensation of all named executive officers other than our CEO, seeks to ensure that all executive compensation is fair and aligned with our compensation policy, and makes recommendations to our Board of Directors with respect to the compensation of the CEO and our compensation practices generally. The CEO recuses himself from all Board discussions and decisions on his own compensation.
The Compensation Committee reviews all information presented and discusses the recommendations with the CEO and with our compensation consultant. In making decisions regarding pay levels and practices for our named executive officers, the Compensation Committee considers a reportvariety of factors, including:
| • | absolute corporate performance relative to our objectives; |
| • | creation of long-term value for our stockholders and stockholder views on compensation; and |
| • | feedback from stockholders and proxy advisers as part of outreach efforts. |
The duties and responsibilities of the Compensation Committee are laid out in its charter, which can be found on our website, and described above under “How our Board is Organized—Board Committees.”
Role of the Independent Compensation Consultant
As outlined in its charter, the Compensation Committee has the right to retain compensation consultants (and other outside consultants) to provide independent advice to the Compensation Committee. In Fiscal 2023, the Compensation Committee appointed F.W. Cook & Co. (“F.W. Cook”) as an independent outside compensation consultant. During Fiscal 2023, F.W. Cook provided general market data on compensation levels for the Company’s named executive officers, emerging trends in incentive metrics in executive compensation programs, and trends related to the executive clawback policies. As part of its annual independence assessment during Fiscal 2023 (cited under “—Annual Process” below), the Compensation Committee considered the six factors specified by the SEC in Rule 10C-1 under the Exchange Act and by Section 303A.05 of the NYSE Listed Company Manual to monitor the independence of its compensation consultant, and determined that F.W. Cook’s provision of services to the Company did not raise a conflict of interest.
Role of Management
Each year, the CEO provides an assessment of the performance of each named executive officer, other than himself, during the prior year and recommends to the Compensation Committee the compensation to be awarded to each such named executive officer, which is then determined by the Compensation Committee. The CEO’s recommendations are based on numerous factors including:
| • | corporate and individual performance; |
| • | leadership competencies; and |
| • | market competitiveness. |
The CEO also provides a self-assessment of his achievements for the prior year, which the Compensation Committee reviews and considers when making a recommendation for an appropriate level of compensation for the CEO to the Board for approval. The CEO does not participate in any deliberations regarding his own compensation.
Management of Compensation-Related Risk
In 2023, in consultation with our CEO and F.W. Cook, our Compensation Committee assessed our compensation plans, policies and practices for the named executive officers and other employees and concluded that they do not create risks that are reasonably likely to have a material adverse effect on our Company. This risk assessment included, among other things, a review of our cash and equity incentive compensation plans to ensure that they are aligned with our Company performance goals and overall target total direct compensation to ensure an analysisappropriate balance between fixed and variable pay components. Our Compensation Committee conducts this assessment annually.
ORMAT TECHNOLOGIES, INC. | 2024 PROXY STATEMENT 37
Other Compensation-Related Policies
Claw-back Policy: We maintain a claw-back policy as required by the rules of the seniorNYSE. Our claw-back policy covers each of our current and former executive officers. The policy provides that, subject to the limited exemptions provided by the NYSE rules, if the Company is required to restate its financial results due to material noncompliance with financial reporting requirements under the securities laws, the Compensation Committee must reasonably and promptly seek recovery of any cash- or equity-based incentive compensation levels at(including vested and unvested equity) paid or awarded to the comparable companies andexecutive officer, to the percentile position ofextent that the compensation levels of the Company's senior executives relative to such comparable companies. The Zviran report(i) was based on erroneous financial data and (ii) exceeded what would have been paid to the executive officer under the restatement. Recovery applies to any such excess cash- or equity-based bonus/other incentive compensation practicesreceived by any covered executive officer, while he/she was an executive officer, on or after October 2, 2023 during the three completed fiscal years immediately preceding the date on which the Company determines an accounting restatement is required. For more information, see the full text of our claw-back policy, which is filed as an exhibit to our Annual Report on Form 10-K.
Anti-Hedging and information derivedAnti-Pledging Policies: Our insider trading policy prohibits, without exception, our executive officers, employees and directors from a proprietary databaseengaging in speculative transactions designed to decrease the risks of holding Company securities, such as short sales of Company securities and transactions in puts, calls, publicly-traded options and other derivative securities with respect to Company securities. The policy also forbids all of our executive compensation informationofficers, employees and directors from entering into hedging or monetization transactions, such as zero-cost collars and forward sale contracts, which allow such individuals to continue to own Company securities without the full risks and rewards of ownership. In addition, our executive officers, employees and directors are prohibited, without exception, from pledging Company securities as collateral for the Israel market maintained by Zviran, as well as supplemental executive compensation information for the U.S. Market that Zviran obtained from Mercer, the U.S.-based executive compensation firm. Theloans and may not hold Company paid Zviran and Mercer an aggregate fee of $37,432 for their services and the Zviran report.
Prior to engaging Zviran, the Compensation Committee conducted an independence assessment and considered the independence factors set forthsecurities in SEC rules and regulations and the NYSE listing standards. Following such assessment, the Compensation Committee concluded that Zviran is independent from the Company’s management and their engagement, including the scope of work to be performed, would not raise any conflict of interest.
Determination of Amounts and Formulas for Compensationmargin accounts.2023 COMPENSATION DETERMINATIONS
Annual Salary
Consistent with our objectives with respect to our executive officers, the Compensation Committee provides guidance in setting base salaries for the Company'sCompany’s executive officers annually at levels that reflect the Compensation Committee'sCommittee’s interpretation of competitive compensation averages for individuals with similar responsibilities at companies with similar financial, operating and industry characteristics, in similar locations. TheFrom time to time, the Compensation Committee typically does notwill undertake or commission a formal study or survey to benchmark compensation to a particular industry or to particular companies and thecompanies. The members of the Compensation Committee also evaluate executive compensation using their accumulated individual knowledge and industry experience, as well as publicly available compensation information with respect to companies that have a similar market capitalization or similar annual revenues, and that operate under a business structure similar to ours (although not necessarily in the same industry segment)industry).
In addition, the Compensation Committee takes into consideration the performance of the Company, individual performance of each executive officer, and the individual executive officer'sofficer’s scope of responsibility in relation to other officers and key executives within the Company. Annual salariesSalaries also reflect current practices within an NEO'sthe specific geographic region and among executives holding similar positions. In addition to these factors, the annual salary for an NEOexecutive officer depends on a number of more subjective factors, including our evaluation of the executive'sexecutive’s leadership role, professional contribution, experience and sustained performance.
Following publication of the prior year'sfiscal year’s audited financial statements, the CEO determinesrecommends to the Compensation Committee whether and to whatthe degree to awardwhich salary increases should be awarded to any of the NEOs. Factors that are considered includeexecutive officers. The CEO and the Compensation Committee will consider factors such as, but not limited to, the net income of the Company during the prior year, the need for a salary adjustment to remain competitive with compensation averages for executives in similar positions, and the particular NEO'sindividual executive officer’s effectiveness in supporting the Company'sCompany’s long-term goals. We also consider the executive's department's contribution to our success of the department of which the executive officer was in charge, as well as our general achievements made within that department and by the executive officer during the precedingprior fiscal year. All salary increases are awarded retroactive to January 1. Salaries are paid on a monthly basis, except for Mr. Sullivan’s salary and the portion of Mr. Angel’s salary that is based in the U.S., each of which is paid bi-weekly, and with two exceptions, each of our current NEOs has a standard employment agreement that is based on a form used company-wide.
On November 7, 2017, in connection with certain changes to our executive compensation program,In 2023, the Compensation Committee
increased our NEOs’ base salaries in amounts ranging from less than 1% to 13%, based on market data, job performance and
each NEO’s responsibilities for Fiscal 2023. For Fiscal 2023, the
Board approved increases to the annual base salaries of
our CEO and CFO. Effective December 1, 2017, Mr. Angel, our CEO, will receive an annual base salary of approximately $609,000, representing an increase in annual base salary of approximately 31%, andthe NEOs were as follows: for Mr. Blachar,
our CFO, will receive an annual base salary of approximately $381,250, representing an increase in annual base salary of approximately 4%.$565,000; for Mr. Ginzburg, $425,000; for Mr. Hatzir, $368,000; for Mr. Ben Yosef, $332,000; for Ms. Woelfel, $360,000.ORMAT TECHNOLOGIES, INC. | 2024 PROXY STATEMENT 38
Annual Bonus
Management Plan
Each year, following publication of our financial statements for the precedingprior fiscal year, the Compensation Committee determines the basket of bonuses that may be awarded on a Company-wide basis for the prior year. The Compensation Committee determines and approves the amount of any annual bonus payable to our CEO and, based upon the recommendations of our CEO, reviews and approves the annual bonus payable to our other NEOs.
Our CEO's annual bonus is payable in accordance with the terms of his employment agreement with the Company and Ormat Systems, which are described under "EXECUTIVE COMPENSATION—Employment Agreements" below. Under the terms of our CEO's employment agreement, our CEO is eligible for an annual bonus in an amount of up to .75% of our annual profits up to $50 million (inclusive) and 1% of the portion of our annual profits, if any, above $50 million. The maximum annual bonus payable to our CEO pursuant to his employment agreement was $750,000. However, on November 7, 2017, the Compensation Committee and the Board approved a maximum annual bonus payable to our CEO of $900,000, calculated as follows: 75% of the annual cash bonus will be based on achievement of specific performance metrics that measure the financial performance of the Company and 25% of the annual cash bonus will be determined at the discretion of the Compensation Committee based on the achievement of other goals, such as diversity, social and environmental responsibility and merger and acquisition activities. The increase is effective as of December 1, 2017.
executive officers.Annual bonuses for our other NEOsexecutive officers are payable in accordance with the Company’s Annual Management IncentivePlan. Mr. Blachar’s eligibility for an annual cash bonus under the Management Plan is also governed by additional terms provided in his employment agreement (the "Management Plan"“Blachar Employment Agreement”), which was approved by the Board and theare described under “Executive Compensation Committee on February 23, 2016. Tables—Employment Agreements” below.
The Management Plan provides for annual cash incentive awardsbonuses for participating employees based uponon the achievement of certain performance measures established by the Compensation Committee, based on the recommendations of our CEO.metrics. At the beginning of each fiscal year, our CEO reviews withand the Compensation Committee review the Company'sCompany’s objectives under the Company’s strategic plan the Company’sand annual budget, the compensation practices of our peers, and other market data, and the CEO recommends performance metrics, which are measurable financial and/orand operational goals, for the upcoming fiscal year.year for all executive officers other than himself. These measurable financial and/orand operational goals may be with respect to the performance of the Company on a consolidated basis, the performance of the Company in a particular country or region, and/or the performance of a business unit or operating segment of the Company, including a geographically basedgeographically-based business unit.
Based uponPerformance Metrics
After taking into account the CEO'sCEO’s recommendations, the Compensation Committee establishes (i) Company Performance Metrics (as defined in the Management Plan), applicable to all executive officers, (ii) other quantitative individual performance criteria for each executive officer (the “Individual Performance Metrics”) and varying(iii) qualitative “CEO Goals” for each executive officer. The “CEO Goals” include certain operational objectives for each executive officer, thus enabling the Compensation Committee to evaluate achievement based on both the executive officer’s individual performance and our overall Company performance during the covered fiscal year. Collectively, the metrics focus on financial and operational performance, our execution of our business plan, the individual performance of the executive officer, certain subjective assessments of the executive leadership and other contributions to and impacts by the executive officer on the Company.
The Compensation Committee sets target levels of achievement under each of such Company Performance Metrics, Individual Performance Metrics and CEO Goals, and assigns a weight to each of these three elements reflecting the contribution of achievement to the total payout. The Compensation Committee has the ability to adjust the targets once they are set for extraordinary events. The Management Plan provides that, result in the payment of minimum and maximum cash incentive awards, specifiedunless otherwise determined by the Compensation Committee, asfor executive officers (other than Mr. Blachar) the Company Performance Metrics may not have a percentagecollective weight of the Management Plan participant's base salary, for each Management Plan participant for each fiscal year.less than 50%. The Compensation Committee also assignsdetermined that the Company Performance Metrics should have a weight toof 40% in 2023 for these NEOs. For Mr. Blachar, as dictated by the Blachar Employment Agreement, the Company Performance Metrics and individual performance criteria that reflects the contributionIndividual Performance Metrics must have a collective weight of achievement75%, and the CEO Goals must have a weight of each25%.
ORMAT TECHNOLOGIES, INC. | 2024 PROXY STATEMENT 39
The chart below indicates the rationale for the Company Performance Metric, the Individual Performance Metrics (as a group) and the individualCEO Goals (as a group), and the weighting of each component for the CEO and other NEOs for Fiscal 2023.
| | | | | | Weighting |
| Category | | Rationale | | Components | | | | |
| | | | | | CEO | | Other NEOs |
| Company Performance Metric | | Financial metrics, based against targets set by the Board, that support commitment to provide solid returns to our shareholders and support our dividend | | Revenue Adjusted EBITDA(1) | | 
| | 
|
| Individual Performance Metrics | | Other quantitative financial and operational metrics that focus on our core business drivers and growth targets | | Specific to each NEO’s role at the Company, including items such as: • Income before income taxes • Net income • Electricity and Product segment revenue • Electricity and Energy Storage segment EBITDA • Product segment gross margin • Product backlog • Energy Storage segment growth • Targeted operational goals • Reporting compliance • Capital expenditure | | | | CCO:
Others: 
|
| CEO Goals | | Qualitative metrics that encourage the efficient management of the Company and its culture | | Measuring the CEO’s effectiveness at, among other things: • Managing and operating the Company • Human capital management • Impact on social and environmental responsibility initiatives • M&A activity | | 
| | CCO:
Others: 
|
| (1) | Adjusted EBITDA, as reported on our financial results, is defined as net income before interest, taxes, depreciation, amortization, and accretion, adjusted for (i) mark-to-market gains or losses from accounting for derivatives not designated as hedging instruments; (ii) stock-based compensation; (iii) merger and acquisition transaction costs; (iv) gain or loss from extinguishment of liabilities; (v) cost related to a settlement agreement;, (vi) non-cash impairment charges; (vii) write-off of unsuccessful exploration activities; and (viii) other unusual or non-recurring items. |
Finally, in addition to determining pre-set performance criteria to ametrics and weights for each such metric, the Compensation Committee establishes threshold and maximum bonus opportunities for each executive officer, based on base salary. For all NEOs other than Mr. Blachar, the Compensation Committee set threshold and maximum bonus opportunities for Fiscal 2023 under the Management Plan participant's incentive award. The Company Performance Metricsat approximately 10% and individual performance criteria against which performance75%, respectively, of the NEOs’ base salaries. There is measuredno target bonus opportunity for the NEOs other than Mr. Blachar. For Mr. Blachar, the Compensation Committee set his threshold, target and maximum bonus opportunities for Fiscal 2023 at 100%, 100% and approximately 117% (i.e., two months extra of base salary), respectively, of his base salary. For more information on threshold, target and maximum bonus opportunities, see “Executive Compensation Tables—Grants of Plan-Based Awards in 2023.”
Bonus payouts are determined based on the level of actual achievement for each goal under the Management Plan participant in a given fiscal year may include: consolidated revenue, consolidated adjusted EBITDA, net income, Electricity segment revenue, Electricity segment gross profits, generation (GWh), Product segment sales, Product segment gross margin, next year bookings, project costs asPlan. Achievement is assessed stringently but holistically. For the CEO’s bonus, if the actual results exceed the target of project completion and/or manufacturing costs as of project completion. Inone metric, it can offset the eventother metrics. If the level of achievement of a Company Performance Metric falls between the levels corresponding to a minimumthreshold and maximum incentive award, the Management Plan participant's incentive award will bebonus, bonus payout is based on a linear interpolation between the minimumthreshold and maximum incentive awardbonus amounts. LevelsMr. Blachar’s maximum bonus opportunity is achievable only if the net income metric set for him (under the Individual Performance Goals) exceeds its target. Regardless of achievement for each Management Plan participant for each fiscal year are measured by the CEO (or the Compensation Committee, in the case of an incentive award to the CEO) based on the reported Company Performance Metrics in the Company's audited financial statements, Annual Report on Form 10-K for such fiscal year and/or internal budgets, within 45 days after approval of the Company's annual financial statements by our Board. The Management Plan also requires that (i) at least 50% of any performance-based award be based on achievement of the established Company Performance Metrics and/or individualother performance, criteria and (ii) no performance-based award bebonus is paid under the Management Plan for any fiscal year, unless the Company's consolidated annualCompany’s net income for such fiscal year is positive. Under the Management Plan, the Compensation Committee has the authority to make incentive awards to any one or more Management Plan participants during any fiscal year as the Compensation Committee determines in its discretion is appropriate and in the best interests of the Company, regardless of the level of achievement of established Company Performance Metrics for such fiscal year. Such discretionary awards may be based upon the Management Plan participant's individual performance or achievement of individual goals and certain subjective assessments of the Management Plan participant's leadership and other contributions to the Company, as well as expected future contributions to the Company.
ORMAT TECHNOLOGIES, INC. | 2024 PROXY STATEMENT 40
On November 7, 2017, in connection with certain changes to our executive compensation program, the Compensation Committee and the Board approved a maximum annual cash bonus to our CFO of $297,000.
Awards under the Plan are generally payable as soon as practicable after the amount of such award is determined in accordance with the Plan, and in any event within the calendar year following the calendar year in which the bonus is earned.
For fiscal year 2017, incentive awards to each of our NEOs (other than our CEO) under the Management Plan were based upon (i) for all NEOs (other than our CEO), achievement of revenue and Adjusted EBITDA targets of $699 million and $348 million, respectively and (ii) for each NEO (other than our CEO), achievement of individual performance criteria specific to each NEO's role at the Company, including net income, Electricity and Product segment revenue, Electricity and Product segment gross margin, Product segment new sales (i.e., sales made in fiscal year 2017 for which the Company expects to recognize revenue after the end of fiscal year 2017) and electricity generation, compared to the Company's goals. The Company Performance Metrics applicable to all NEOs and the individual performance criteria specific to each NEO are based upon the Company's fiscal year 2017 corporate strategic initiatives, the Company's annual budget and individual performance. The chart below indicates the weight assigned toactual achievements under each Company Performance Metric andelement of the individual performance criteriaManagement Plan for each NEO for fiscal year 2017:
| NEO | Revenue | Adjusted EBITDA | Individual Performance Criteria | Discretionary Bonus |
| Doron Blachar, Chief Financial Officer | 13% | 12% | 54% | 21% |
| Zvi Krieger, Executive Vice President, Electricity Segment | 5% | 5% | 28% | 62% |
| Shlomi Argas, Executive Vice President, Product Segment and Operations | 14% | 13% | 29% | 44% |
| Bob Sullivan, Executive Vice President, Business Development Sales and Marketing | 11% | 10% | 54% | 25% |
The chart below indicatesin Fiscal 2023, based on our Company’s and the
target and actual level ofNEOs’ individual performance
achieved with respect to each ofas described in more depth following the chart.| | | Company Performance Metrics | | Individual
Performance Metrics | | |
| NEO | | Revenue | | Adjusted EBITDA | | | CEO Goals |
| Doron Blachar, Chief Executive Officer | | 72% | | 89% | | 113% | | 100% |
| Assaf Ginzburg, Chief Financial Officer | | 83% | | 76% | | 97% | | 100% |
| Shimon Hatzir, Executive Vice President, Electricity Segment | | 83% | | 76% | | 67% | | 100% |
| Ofer Ben Yosef, Executive Vice President, Business Development and Sales | | 83% | | 76% | | 44% | | 100% |
| Jessica Woelfel, General Counsel, CCO, and Corporate Secretary | | 83% | | 76% | | 100% | | 100% |
Company Performance Metrics Results
For the Company Performance Metrics applicable to all NEOs, (other than our CEO), as determined bythe Compensation Committee considered the following financial results for Fiscal 2023:
| Company Performance Metric | Target | Actual |
| Revenue | $853 million | $829.4 million |
| Adjusted EBITDA | $487 million | $481.7 million |
Assessment of Individual and CEO Goals
In assessing the level of achievement on the Individual Performance Goals and the CEO (all dollar amounts are in millions) and approved byGoals under the Management Plan for Fiscal 2023, the Compensation Committee:
| Company Performance Metric | Target | Actual |
| Revenue | $699 | $693 |
| Adjusted EBITDA | $348 | $344 |
TheCommittee reviewed a number of factors. For Mr. Blachar, whose targets within the Individual Performance Goals included net income of $102.7 million and income before income taxes of $137 million, the Compensation Committee
set minimumconsidered actual adjusted net income above target of $122 million and
maximum incentive award amounts for fiscal year 2017 at approximately 8.33%actual adjusted income before income taxes of $139.1 million. For the other NEOs, the Compensation Committee considered, among other things, net income, individual segment revenue and
75%gross margin, and electricity generation results as compared to the targets. With respect to the CEO Goals, the Compensation Committee determined that each of the
NEOs' annual base salaries, or approximately one month's base salary and nine months' base salary, respectively. NEOs should receive 100% of the qualitative CEO Goals component of his bonus in light of the Company’s achievements with respect to, among other things:| • | the Company met and exceeded financial guidance despite operational, supply chain, geopolitical and labor challenges; |
| • | the Company experienced meaningful growth in the electricity and projects segments; |
| • | the Company signed the accretive acquisition of Enel North America’s geothermal and solar assets in the United States; |
| • | the Company signed four long-term power purchase agreements; |
| • | the Company signed multiple agreements to build power plants for third parties; |
| • | the Company’s successful employment retention programs and enhanced focus on leadership development; |
| • | ESG-related metrics, including the publication of new ESG policies, reduced carbon footprint with respect to Scope 1 and 2 emissions, and increased disclosure and transparency of Scope 3 emissions; and |
| • | diversity, equity and inclusion, including increased diversity in senior management, such that three of the eight global executive management members as of Fiscal 2023 were women, and strong representation of local communities among senior management at our plants, such that all senior management at our power plants were hired from local communities. |
ORMAT TECHNOLOGIES, INC. | 2024 PROXY STATEMENT 41
Management Plan Payouts
The chart below indicates, for each of our NEOs, (other than the CEO), after linear interpolation, the amount of the incentive awardbonus earned and paid out to him or her, expressed as a percentage of the maximum incentive award amount:
NEO | % of Award Earned Paid Out |
Doron Blachar, Chief Financial Officer | 74% |
Zvi Krieger, Executive Vice President, Electricity Segment | 100% |
Shlomi Argas, Executive Vice President, Product Segment and Operations | 70% |
Bob Sullivan, Executive Vice President, Business Development Sales and Marketing | 44% |
Accordingly, Messrs. Blachar, Krieger, Argasbonus amount, and Sullivan received incentive awards of approximately 56%, 75%, 52% and 33% of their annual base salaries, respectively, under the Management Planbonus payouts in respect of the level of performance achieved with respect to the Company Performance Metrics, Individual Performance Metrics and individual performance criteria,CEO Goals, as described above.
| NEO | % of Award Paid Out | Bonus Payout |
| Doron Blachar, Chief Executive Officer | 94% | $594,000 |
| Assaf Ginzburg, Chief Financial Officer | 90% | $274,000 |
| Shimon Hatzir, Executive Vice President, Electricity Segment | 83% | $223,000 |
| Ofer Ben Yosef, Executive Vice President, Business Development and Sales | 68% | $165,000 |
| Jessica Woelfel, General Counsel, Chief Compliance Officer, and Corporate Secretary | 81% | $220,000 |
Equity Awards
We are committed to long-term incentive programs for our executive officers that promote the long-term growth of the Company and align the interests of our executive officers with those of our stockholders. The determination of the overall baskettotal amount of annual equity awards that may be awarded to our employees in a particular year is determined in a similar manner to our annual incentive bonuses. If we are tobonuses under the Management Plan. We make equity awards to our executive officers and employees on an annual basis in a particular year, then,line with market norms, and in order to reinforce our pay for performance culture.
We make equity awards following the publication of our financial results for the preceding year and our Compensation Committee determines the total amount of annual basket of equity awards that may be made to all of our employees. This basket is typically calculated as up to 1.5% of the outstanding shares of the Company per year.
Within one month after the Compensation Committee determines the total amount of annual basket of equity awards that may be made to all of our employees, including our NEOs,executive officers, our CEO recommends to the Compensation Committee the particular amount of equity awards to be made to each of the NEOsexecutive officers after consideration of a variety of factors, including the Company'sCompany’s performance and relative stockholder return, the expected contribution of the NEOexecutive officers to the Company'sCompany’s growth and success, awards granted to the NEOsexecutive officers in past years and certain survey and other market data regarding the compensation practices of our peers' compensation practices.peers. These factors are not assigned any particular weight, nor doesand the Compensation Committee does not use a formula to apply these factors in order to determinedetermining the number of equity awards to be made to each of our NEOs.executive officers. Instead, the Compensation Committee uses its judgment and experience in considering these factors to determine the appropriate number of equity awards to be granted to each of our NEOsexecutive officers for each fiscal year to ensure there is a strong link between our NEOs'executive officers’ compensation and performance and alignment of our NEOs'their interests with those of our stockholders. Additionally, the Compensation Committee benchmarks against the average value of long-term equity incentive awards granted to NEOs with similar responsibilities at peer companies based on information provided to the Compensation Committee by AON Hewitt and Zviran (Israel), with the goal of offering competitive equity compensation that allows us to retain and incentivize our NEOs, while remaining within appropriate ranges established by our peers and the broader market. In general, the equity awards we grant to our NEOs are subject to the same pricing, vesting and exercise terms that govern the grant of equity awards to all of our employees. All equity awards are made pursuant to the 2012 ICP.
Historically, we granted our executive officers stock optionsCompany’s 2018 Incentive Compensation Plan, as the long-term component of their compensation. In 2012 and 2013, the Compensation Committee decided to grant our executives SARs instead of stock options because the Compensation Committee determined that SARs provide comparable long-term incentives while utilizing fewer shares of our Common Stock. In 2014, the Compensation Committee granted stock option awards to Mr. Angel, our CEO, and Mr. Blachar, our CFO. In addition, we may grant stock options to newly hired executives upon their commencement of employment.
On November 7, 2017, the Compensation Committee and our Board approved certain changes to the equity component of the compensation of each ofamended (the “2018 ICP”).| Awards granted to NEOs include two distinct components: Performance Stock Units (PSUs) and Restricted Stock Units (RSUs). Each executive’s target grant value is based on his or her role. |  |
During 2023, our NEOs including our CEO and CFO. The Compensation Committee and our Board, which previously approved the grant by the Company of solely stock options and SARs to all NEOs pursuant to the 2012 ICP as thereceived equity component of our NEOs' annual incentive compensation replaced a portion of the stock options and SARs with restricted stock units ("RSUs") so that from November 7, 2017, the Company will grant to our NEOs and certain other executive officers equity compensationweighted towards performance-based awards, with a target valueallocation mix of two-thirds SARs60% PSUs and one-third40% RSUs. The RSUsPSUs are calculated based on percentage of total grant date fair value for all grants (assuming a payout at the probable outcome level for PSUs) and SARsbased on capacity growth based on Megawatts (“MW”), such that 50% of granted PSUs are time-vested and vest accordingtied to TSR performance relative to the following schedule: RSUsS&P 500, and SARs50% of granted PSUs are tied to our CEO willtargeted MW growth. The Fiscal 2023 PSU and RSU awards vest 22%, 22%, 28% and 28%, respectively,over four years, with 25% vesting on the one, two, three and four year anniversarieseach anniversary of the date of grant and RSUs granted to the other NEOs, including the CFO, will vest 25% on each of the one, two, three and four year anniversaries of the date of grant.date. Each RSU represents the right to receive one share of Common Stock upon vesting and is valued on the date of grant based on the closing price of our Common Stock on the next business day following the date of grant. SARs
PSUs tied to TSR are paid out based on the Company’s achievement of three-year relative total shareholder return (“relative TSR”) compared to companies in the S&P 500 index. The Compensation Committee chose relative TSR as the performance metric due to its prevalent use in compensation design and its focus on driving stockholder value within a broad-market investment portfolio. The performance metrics are as follows:
ORMAT TECHNOLOGIES, INC. | 2024 PROXY STATEMENT 42
| Three-year relative TSR | PSUs earned* |
| 75th percentile and above | 150% (maximum) |
| 55th percentile | 100% (target) |
| 35th percentile | 50% (threshold) |
| Below 35th percentile | 0% |
| * | Subject to linear interpolation. |
Additionally, where three-year relative TSR is negative, regardless of performance relative to our peers, the TSR PSU payout will continuebe capped at 100% of target.
PSUs tied to vest accordingMW targets are paid out based on the Company’s achievement of defined three-year MW growth targets established by the Compensation Committee at the time of grant and the Compensation Committee does not have discretion to vary the MW targets after the grant date. The number of PSUs that may be earned ranges from 0% to 200% of target. The Compensation Committee chose MW targets as the performance metric to align with the Company's multiyear capacity expansion targets that further strengthens our earnings generation capabilities. At least 50% of the MW growth must be via organic growth. The MW target performance metrics are challenging, but attainable goals that motivate exceptional performance against our operating plan. The targets are set at levels we believe require significant effort on the part of our executives, yet also represent a reasonable expectation of operational results based on prior-year performance, existing business conditions, the markets in which we participate and our outlook. While we believe in transparency and disclose as much information to stockholders as is necessary to understand how our executive compensation program works, we believe that disclosing these metrics on a prospective basis would provide our competitors with insight regarding confidential business growth strategies, and would thereby result in competitive harm to the following schedule: SARs grantedCompany. We will disclose the targets and actual performance on a retrospective basis for the MW PSUs that vest after completion of the three-year performance period.
PSUs tied to all NEOs, except our CEO,each of the relative TSR and MW targets are also subject to service-based vesting and will vest 25%ratably over four years (25% on each of the one, two, three and four year anniversaries of the date of grant). However, no PSUs will actually be earned or paid until completion of the three-year performance period from the date of the grant, and are valuedthe ability to receive the PSUs will not begin to occur until after year three.
2020-2023 PERFORMANCE STOCK UNITS PROGRAM RESULT
The PSUs granted to our executive officers in 2020 were paid out based on the closing priceCompany’s achievement of our Common Stock on the next business day following the date of grant. Upon exercise, all SARs will be paid in shares of our Common Stock with a value equalthree-year relative total stockholder return (“relative TSR”) compared to (a) the number of shares underlying the SARs that are being exercised, multiplied by (b) the excess (if any) of (i) the market price of a share of Common Stock on the date the SAR is exercised, over (ii) the exercise price specifiedcompanies in the SAR. RSUsS&P 500 index. For the 2020-2023 performance cycle, our 3-year relative TSR was in the 39th percentile with respect to the PSUs granted to Mr. Blachar in July 2020, the 41st percentile with respect to the PSUs granted to Mr. Ginzburg and SARsMr. Ben Yosef in May 2020, and the 20th percentile with respect to the PSUs granted to Mr. Hatzir (prior to becoming an executive officer), resulting in 60%, 64% and 0% respectively of such PSUs being earned compared to the target amounts. Ms. Woelfel did not receive any PSUs in 2020.
OTHER COMPENSATION ELEMENTS
We generally provide to our CEO and CFOother executive officers the same benefits that we provide to all employees, including certain retirement benefits, health and welfare benefits, and other benefits. In addition, our executive officers are provided with certain additional benefits that are intended to be competitive with the practices of similar companies in our industry and the regions in which we operate. Benefit plans and perquisites are intended to supplement cash compensation and often involve non-monetary rewards, coverage of certain business-related expenses, insurance, pension and savings plans and other deferred monetary savings. These benefits and perquisites may vary depending on geographic location and other circumstances. Global, regional and local units may develop their own benefit plans and procedures, consistent with our principles and guidelines and subject to clawbackany required Company approvals. Benefits and perquisites may include, in addition to benefits that are mandated by applicable law and/or generally provided to other employees (including related costs and expenses): car, transportation and accommodations; telecommunication devices; media and computer equipment and expenses; medical insurance; travel and relocation (including family-related expenses, such as tuition and commuting); and life and medical insurance and benefits (including for executive officers’ families). Each of our named executive officers is also party to an employment agreement with Ormat Systems, one of the Company’s subsidiaries organized in Israel, that sets forth their respective terms of employment, which terms are generally applicable to all of Ormat Systems’ employees under Israeli law, covering matters such as vacation, health and other benefits. For more information, see, in “Executive Compensation Tables.”
ORMAT TECHNOLOGIES, INC. | 2024 PROXY STATEMENT 43
Retirement and Other Local Benefits
ISRAEL
Israeli law generally requires severance pay equal to one month’s salary for each year of employment upon the termination of an employee’s employment due to retirement, death, termination without cause (and other circumstances as defined under Israeli law). We make monthly contributions on behalf of our Israel-based executive officers to a pension plan, known as a management insurance plan, or to a pension fund. These funds provide a combination of pension allowance and/or insurance and severance pay benefits to the executive officers. We contribute 7.5% of the monthly salary to the pension component (including disability insurance) and 8.33% of the monthly salary to the severance component and the employee contributes an amount between 6% and 7% of salary to the pension component. Our CEO is entitled to similar contributions on behalf of the Company as pension contribution and on account of severance. Accordingly, a substantial part of our statutory severance obligation is covered by these monthly contributions. Generally, in addition, our Israel-based NEOs are entitled to participate in an education fund plan (the “Education Fund”), pursuant to which each executive officer who participates in the plan contributes an amount equal to 2.5% of their monthly salary to the Education Fund and the Company 7.5% of their monthly salary to the Education Fund up to a certain circumstances.
On December 5, 2017,sum. For more information, see the “All Other Compensation” column in the “Summary Compensation Table”, in “Executive Compensation Tables.”THE UNITED STATES
In the United States we provide various defined contribution plans for the benefit of our U.S.-based executive officers, including a 401(k) plan with a Company match. Under these plans, contributions are based on specified percentages of pay.
Details regarding benefits and perquisites specific to each NEO can be found in the footnotes to the “All Other Compensation” column in the “Summary Compensation Table” in “Executive Compensation Tables”.
Other Bonuses
The Compensation Committee also has the authority to make discretionary bonuses during any fiscal year, as the Compensation Committee determines in its discretion is appropriate and our Board rescinded and voidedin the grant of 243,300 SARs and 34,500 RSUs, comprising allbest interests of the equity incentive awards grantedCompany. These discretionary bonuses are made outside of, and not based on November 7, 2017 to our CEO pursuantpre-set goals or formulas in, the Management Plan, and are instead sized based on various factors determined at the Compensation Committee’s discretion, such as individual performance, individual goals, other contributions to the 2012 ICP. This was done becauseCompany and expected future contributions to the Company. For Fiscal 2023, the Compensation Committee did not grant any discretionary bonuses to any Management Plan participants.
FISCAL 2024 COMPENSATION
In the first quarter of Fiscal 2024, the Compensation Committee conducted its annual executive compensation review and approved the awards exceededcompensation of our NEOs for the annual limit for 2017 under the terms of the 2012 ICP.year. The Compensation Committee considered, among other factors, our strategic plans for growth and expansion, our Board intend to make an awardcorporate performance, our NEOs’ individual performance, and market data provided by F.W. Cook.
The Compensation Committee set the Fiscal 2024 target bonuses for Messrs. Ginzburg, Hatzir and Ben Yosef at 83.3% of salary, while leaving the target bonus percentages for Mr. Blachar and Ms. Woelfel unchanged. The Compensation Committee also increased the value of equity awards granted to our CEO to equitably replace the award that was rescinded.
IfNEOs for Fiscal 2024 under the 2018 ICP (Proposal 3) is approvedin amounts ranging from 7% to 38%, and adopted at the 2018 Annual Meeting of Stockholders, we will no longer makedid not increase any grants under the 2012 ICP. However, the 2012 ICP will remain in effect with respect to outstanding equity awards previously made under the 2012 ICP.
Our Compensation Committee considers the potential impact of Section 162(m)NEO’s base salary, based on
compensation. Section 162(m) disallows a tax deductionmarket data, job performance and each NEO’s responsibilities for
any publicly held corporation for individual compensation exceeding $1.0 million in any taxable year for our CEO and our other NEOs (except our CFO) other than compensation that is performance-based under a plan that is approved by the stockholders of the corporation and that meets certain other technical requirements. Based on these requirements, since none of the NEOs who are employed by the Company received compensation in excess of $1.0 million,Fiscal 2023.In addition, the Compensation Committee has determined that Section 162(m)recommended, and the Board approved, a change under our compensation program whereby the PSUs and RSUs of all employees will not prevent us from receivingnow time vest over a tax deduction for anythree-year period instead of the compensation paida four-year period (with PSUs continuing to our executive officers for fiscal year 2017.
performance vest based on a three-year performance period).COMPENSATION COMMITTEE REPORT
The Compensation Committee has reviewed and discussed the Compensation“Compensation Discussion and AnalysisAnalysis” with management and based on the review and discussions, it has recommended to the Board that the Compensation“Compensation Discussion and AnalysisAnalysis” be included in the Company'sthis Proxy Statement relating to our 2024 Annual Report on Form 10-K for the fiscal year ended December 31, 2017 and Proxy Statement.
Meeting of Stockholders.Submitted on March 16, 2018 by the members of the Compensation Committee of the Board of Directors of Ormat Technologies, Inc.
Company’s Board.Dafna Sharir, Chair
Michal Marom
Mike Nikkel
ORMAT TECHNOLOGIES, INC. | 2024 PROXY STATEMENT 44
The foregoing Compensation Committee Report on Executive Compensation and compensation-related disclosures set forth in the Proxy Statement shall not be deemed to be soliciting material or be incorporated by reference by any general statement incorporating by reference this proxy statement into any filing under the Securities Act or under the Exchange Act except to the extent the Company specifically incorporates this information by reference, and shall not otherwise be deemed filed under the Securities Act or the Exchange Act.
Summary Compensation Table TABLESSUMMARY COMPENSATION TABLE
The following table sets forth, for the periods required to be disclosed under SEC rules, the total compensation earned by (1)of our (i) CEO, (2) our(ii) CFO and (3) our(iii) three most highly compensated executive officers, other than our CEO and CFO, who were serving as executive officers as of December 31, 2017, during the years ended December 31, 2017, 2016, and 2015 for such periods that such individual was serving as an NEO:
| Name and Principal Position | Year | Salary ($) | Bonus ($)(1) | Stock Awards ($)(2) | Option Awards ($)(3) | Non-Equity Incentive Plan Compensation ($)(4) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) | All Other Compensation ($) | Total ($) |
| Isaac Angel, Chief Executive Officer | 2017 | 469,030 | None | None | None | 762,500 | 69,629 | 55,276(5) | 1,356,435 |
| | 2016 | 426,294 | None | None | 1,198,000 | 750,000 | 61,661 | 50,127 | 2,486,082 |
| | 2015 | 426,122 | None | None | None | 750,000 | 60,251 | 49,037 | 1,285,410 |
| Doron Blachar, Chief Financial Officer | 2017 | 361,907 | None | 606,372 | 1,173,934 | 215,000 | 56,914 | 43,070(6) | 2,457,197 |
| | 2016 | 336,391 | None | None | 509,150 | 215,345 | 50,223 | 40,038 | 1,151,147 |
| | 2015 | 331,581 | None | None | None | 185,853 | 49,275 | 39,822 | 606,531 |
Zvi Krieger, Executive Vice President, Electricity Segment | 2017 | 265,633 | None | 83,830 | 162,334 | 210,000 | 39,616 | 46,603(7) | 808,016 |
| | 2016 | 228,731 | None | None | 509,150 | 142,783 | 33,437 | 40,808 | 954,909 |
| | 2015 | 223,020 | None | None | None | 75,141 | 32,111 | 38,509 | 368,781 |
| Shlomi Argas, Executive Vice President, Product Segment and Operations | 2017 | 227,346 | None | 83,830 | 162,334 | 154,000 | 47,357 | 32,520(8) | 707,387 |
| Bob Sullivan, Executive Vice President, Business Development, Sales and Marketing | 2017 | 225,000 | None | 83,830 | 162,334 | 75,000 | None | 64,839(9) | 689,226 |
| | 2016 | 225,172 | None | None | 509,150 | 121,196 | None | 55,754 | 911,272 |
| | 2015 | 231,800 | None | None | None | 86,500 | None | 30,172 | 348,472 |
2023:Name and
Principal Position | | Year | | Salary
($) | | | Bonus
($) | | Stock
Awards
($)(1) | | Option
Awards
($) | | Non-Equity
Incentive Plan
Compensation
($)(2) | | All Other
Compensation
($)(3) | | | Total
($) | |
Doron Blachar
Chief Executive Officer | | 2023 | | 528,300 | | | — | | 1,800,000 | | — | | 594,000 | | 136,276 | (4) | | 3,058,576 | |
| | 2022 | | 506,910 | | | — | | 675,000 | | 225,000 | | 510,000 | | 140,249 | | | 2,057,159 | |
| | 2021 | | 506,886 | | | 70,000 | | — | | — | | 365,000 | | 132,801 | | | 1,074,687 | |
Assaf Ginzburg
Chief Financial Officer | | 2023 | | 393,940 | | | — | | 850,000 | | — | | 274,000 | | 85,499 | (5) | | 1,603,439 | |
| | 2022 | | 375,748 | | | — | | 445,000 | | 125,000 | | 249,600 | | 87,441 | | | 1,282,789 | |
| | 2021 | | 355,759 | | | 29,000 | | — | | — | | 145,000 | | 88,659 | | | 618,418 | |
Shimon Hatzir
Executive Vice President, Electricity Segment | | 2023 | | 353,458 | | | — | | 700,000 | | — | | 223,000 | | 93,195 | (6) | | 1,369,653 | |
| | 2022 | | 364,965 | | | — | | 400,000 | | 100,000 | | 211,100 | | 98,431 | | | 1,174,496 | |
| | 2021 | | 324,392 | | | — | | — | | — | | 126,000 | | 113,357 | | | 563,749 | |
Ofer Ben Yosef
Executive Vice President, Energy Storage and Business Development | | 2023 | | 318,111 | | | | | 500,000 | | — | | 165,000 | | 77,260 | (7) | | 1,060,371 | |
| | 2022 | | 328,466 | | | — | | 300,000 | | 100,000 | | 211,000 | | 83,049 | | | 1,022,515 | |
| | 2021 | | 318,079 | | | 11,000 | | — | | — | | 119,000 | | 85,161 | | | 533,240 | |
Jessica Woelfel
General Counsel, Chief Compliance Officer, and Corporate Secretary | | 2023 | | 333,231 | | | — | | 450,000 | | — | | 220,000 | | 14,954 | (8) | | 1,018,185 | |
| (1) | ThisThe “Stock Awards” column reflects the amount of any discretionary bonus (cash or non-cash) earned fordollar amounts that represent the fiscal year. All other performance-based bonus awards, including those awarded pursuant to the Management Plan, are included in the ‘Non-Equity Incentive Plan Compensation’ column. |
(2) | Represents theaggregate grant date fair value of all stockthe applicable equity awards computed in accordance with FASB ASC Topic 718 (“Topic 718”). For a summary of the assumptions made in the valuation of the awards, please see Note 14 to the Consolidated Financial Statements in our Annual Report on Form 10-K for Fiscal 2023. $720,000, $340,000, $280,000, $200,000 and $180,000 represent the grant date fair values of all RSU awards to each of Messrs. Blachar, Ginzburg, Hatzir, Ben Yosef and Woelfel, respectively, which are calculated in accordance with the accounting guidancestandards for share-based compensation using Ormat’s closing stock compensation. Awards reflected are RSUs.price on the next day of business following the date of grant. Each RSU represents the right to receive one share of Common Stock upon vesting. The “Stock Awards” column above also reflects the $540,000, $255,000, $210,000, $150,000 and $135,000 grant date fair values of the target number of TSR PSUs and $540,000, $255,000, $210,000, $150,000 and $135,000 grant date fair values of the target number of MW PSUs, in each case, for each of Messrs. Blachar, Ginzburg, Hatzir, Ben Yosef and Woelfel, respectively, that were eligible to vest based on our relative TSR performance goals and MW goals, respectively, which for accounting purposes is based on the probable outcome (determined as of the grant date) of the performance-based condition applicable to the grant. Assuming the maximum level of performance achievement for the TSR PSUs, which is 150% of target, and 200% of target for the MW PSUs, the aggregate values of TSR PSUs for our NEOs in 2023 are $810,000, $382,500, $315,000, $225,000 and $202,500, and the aggregate values of the MW PSUs for each of our NEOs in 2023 are $1,080,000, $510,000, $420,000, $300,000 and $270,000, in each case, for each of Messrs. Blachar, Ginzburg, Hatzir, Ben Yosef and Woelfel, respectively. |
| (2) | The “Non-Equity Incentive Plan Compensation” column reflects the amount of any cash awards granted under the Management Plan to the NEOs. These amounts reflect cash awards earned for 2023 performance, which were paid in 2024. For more information, see “Compensation Discussion and Analysis—2023 Compensation Determinations—Management Plan” above. |
| (3) | Car-related expenses included in this column include also gas, maintenance and insurance, which are perquisites customary in Israel and are provided by the Company in amounts that are customary and prevalent among Israeli companies in comparable industries. |
| (4) | Includes severance and pension contributions as required by Israeli law in the amount of $97,895; payments of car-related expenses in the amount of $38,310; and payments for Israel National Insurance, health insurance, convalescence pay, Education Fund and other perquisites. |
| (5) | Includes severance and pension contributions as required by Israeli law in the amount of $75,524; payments of car-related expenses in the amount of $9,904; and payments for Israel National Insurance, convalescence pay, Education Fund and other perquisites. |
| (6) | Includes severance and pension contributions as required by Israeli law in the amount of $68,397; payments of car-related expenses in the amount of $24,727; and payments for Israel National Insurance, health insurance, convalescence pay, Education Fund and other perquisites. |
| (7) | Includes severance and pension contributions as required by Israeli law in the amount of $64,249; payments of car-related expenses in the amount of $12,940; and payments for Israel National Insurance, convalescence pay, Education Fund and other perquisites. |
| (8) | Reflects the value of cash we contributed to the named executive officer’s account in our 401(k) plan. |
ORMAT TECHNOLOGIES, INC. | 2024 PROXY STATEMENT 45
GRANTS OF PLAN-BASED AWARDS IN 2023
The following table sets forth grants of plan-based awards to each NEO during the year ended December 31, 2023:
| | | | | | Estimated Future Payouts
Under Non-Equity
Incentive Plan
Compensation(1) | | Estimated
Future Payouts
Under
Equity
Incentive Plan
Compensation | | All
Other
Stock
Awards:
Number
of Shares
of Stock
or Units
(#) | | All Other
Awards:
Number of
Securities
Underlying
Options
(#) | | Exercise
or Base
Price of
Option
Awards
($/Sh) | | Grant
Date
Fair
Value of
Stock
and
Option
Awards(2) | |
| Name | | Grant
Date | | Type of
Award | | Threshold
($) | | Target
($) | | Maximum
($) | | Threshold
(#) | | Target
(#) | | Maximum
(#) | | | | | |
| Doron Blachar | | | | Annual Cash Bonus: Management Plan | | 538,790 | | 538,790 | | 630,384 | | | | | | | | | | | | | | | | |
| | | 3/21/23(3) | | PSUs | | | | | | | | 3,397 | | 6,793 | | 10,190 | | | | | | | | $ | 540,000 | |
| | | 3/21/23(4) | | PSUs | | | | | | | | 3,393 | | 6,786 | | 13,572 | | | | | | | | $ | 540,000 | |
| | | 3/21/23(5) | | RSUs | | | | | | | | | | | | | | 9,009 | | | | | | $ | 720,000 | |
| Assaf Ginzburg | | | | Annual Cash Bonus: Management Plan | | 40,495 | | — | | 304,340 | | | | | | | | | | | | | | | | |
| | | 3/21/23(3) | | PSUs | | | | | | | | 1,604 | | 3,208 | | 4,812 | | | | | | | | $ | 255,000 | |
| | | 3/21/23(4) | | PSUs | | | | | | | | 1,603 | | 3,205 | | 6,410 | | | | | | | | $ | 255,000 | |
| | | 3/21/23(5) | | RSUs | | | | | | | | | | | | | | 4,254 | | | | | | $ | 340,000 | |
| Shimon Hatzir | | | | Annual Cash Bonus: Management Plan | | 35,565 | | — | | 267,288 | | | | | | | | | | | | | | | | |
| | | 3/21/23(3) | | PSUs | | | | | | | | 1,321 | | 2,642 | | 3,963 | | | | | | | | $ | 210,000 | |
| | | 3/21/23(4) | | PSUs | | | | | | | | 1,320 | | 2,639 | | 5,278 | | | | | | | | $ | 210,000 | |
| | | 3/21/23(5) | | RSUs | | | | | | | | | | | | | | 3,504 | | | | | | $ | 280,000 | |
| Ofer Ben Yosef | | | | Annual Cash Bonus: Management Plan | | 32,009 | | — | | 240,558 | | | | | | | | | | | | | | | | |
| | | 3/21/23(3) | | PSUs | | | | | | | | 944 | | 1,887 | | 2,831 | | | | | | | | $ | 150,000 | |
| | | 3/21/23(4) | | PSUs | | | | | | | | 943 | | 1,885 | | 3,770 | | | | | | | | $ | 150,000 | |
| | | 3/21/23(5) | | RSUs | | | | | | | | | | | | | | 2,502 | | | | | | $ | 200,000 | |
| Jessica Woelfel | | | | Annual Cash Bonus: Management Plan | | 35,926 | | — | | 270,000 | | | | | | | | | | | | | | | | |
| | | 3/21/23(3) | | PSUs | | | | | | | | 849 | | 1,698 | | 2,547 | | | | | | | | $ | 135,000 | |
| | | 3/21/23(4) | | PSUs | | | | | | | | 847 | | 1,694 | | 3,388 | | | | | | | | $ | 135,000 | |
| | | 3/21/23(5) | | RSUs | | | | | | | | | | | | | | 2,252 | | | | | | $ | 180,000 | |
| (1) | Represents the threshold, target (if applicable) and maximum cash payout opportunities for Fiscal 2021 under the Management Plan. Other than for Mr. Blachar, there is no target for cash payout opportunities for our NEOs. For a further discussion of the payout opportunities, see “Compensation Discussion and Analysis—2023 Compensation Determinations—Management Plan.” |
| (2) | Represents the aggregate grant date fair value of all option awardscomputed in accordance with accounting guidanceTopic 718. For a summary of the assumptions made in the valuation of the awards, please see Note 14 to the Consolidated Financial Statements in our Annual Report on Form 10-K for stock compensation. Awards reflected are SARs.Fiscal 2023. |
| (3) | Represents the shares of Common Stock underlying 3-year relative TSR PSUs granted to our NEOs under our 2018 ICP in 2023. We discuss these awards under the heading “Compensation Discussion and Analysis – 2023 Compensation Determinations– Equity Awards”. The amounts disclosed in the “Estimated Future Payouts Under Equity Incentive Plan Awards” columns represent the number of shares of Common Stock issuable assuming achievement of the specific threshold, target or maximum levels of performance established by the Compensation Committee for these PSUs over the performance period. |
ORMAT TECHNOLOGIES, INC. | 2024 PROXY STATEMENT 46
| (4) | Represents the shares of Common Stock underlying 3-year MW PSUs granted to our NEOs under our 2018 ICP in 2023. The amounts disclosed in the “Estimated Future Payouts Under Equity Incentive Plan Awards” columns represent the number of shares of Common Stock issuable assuming achievement of the specific threshold, target or maximum levels of performance established by the Compensation Committee for these PSUs over the performance period. |
| (5) | Represents shares of our Common Stock underlying RSUs granted under our 2018 ICP in 2023. We discuss these awards under the heading “Compensation Discussion and Analysis – 2023 Compensation Determinations– Equity Awards”. |
EMPLOYMENT AGREEMENTS
The following are descriptions of the material terms of the employment agreements of our NEOs, as well as other factors that may help with an understanding of the data disclosed in the Summary Compensation Table and under the heading “Grants of Plan-Based Awards” above.
General
Each of Mr. Blachar, our CEO, Mr. Ginzburg, our CFO, Mr. Hatzir, our Executive Vice President, Electricity Segment, Mr. Ben Yosef, our Executive Vice President, Business Development and Sales, is employed by Ormat Systems, one of the Company’s subsidiaries that is organized in Israel. Ms. Woelfel, our General Counsel, CCO, and Corporate Secretary, is employed by Ormat Technologies.
Each of Mr. Blachar, Mr. Ginzburg, Mr. Hatzir, Mr. Ben Yosef and Ms. Woelfel is party to an employment agreement with their employer that sets forth their respective terms of employment, which terms are generally applicable to all employees under local law, covering matters such as vacation, health, and other benefits.
Doron Blachar
In connection with Mr. Blachar’s appointment as CEO, Mr. Blachar entered into an amended and restated employment agreement with the Company and Ormat Systems, dated July 2, 2020 (the “Blachar Employment Agreement”). Pursuant to the Blachar Employment Agreement, Mr. Blachar is entitled to receive a gross monthly salary of NIS 135,000, which salary is linked to changes in the cost of living index in Israel. He is eligible to receive an annual cash bonus in a target amount equal to 12 monthly salaries, based on criteria established by the Company, and to receive grants of future equity awards, subject to the terms and conditions of the equity incentive plan and the award agreement. The Blachar Employment Agreement also covers matters such as the Company’s management insurance plan or pension fund (to which Ormat Systems is to contribute a percentage of Mr. Blachar’s salary), contributions by the Company to an education fund and use of a Company-leased car.
In the event that within two months prior to, or 12 months following, the occurrence of a “Change of Control” (as defined in the Blachar Employment Agreement), Mr. Blachar’s employment is terminated by the Company other than for “Cause” or he resigns for “Good Reason” (each as defined in the Blachar Employment Agreement), all of his outstanding RSUs and PSUs will immediately vest, with performance-based equity awards vesting based on target level of performance.
Under the Blachar Employment Agreement, either party may terminate the employment relationship upon six months’ prior written notice or, in the event of a termination for Cause, immediately. In the event Mr. Blachar’s employment is terminated by the Company without Cause, or he resigns within two months before, or 12 months following, the consummation of a Change of Control, Mr. Blachar will be entitled to an extension of his notice period from six months to 12 months. The Company may determine not to take advantage of the full notice period and may terminate Mr. Blachar’s employment at any time during such notice period. In the event of such termination, the Company will pay to Mr. Blachar his salary and other related benefits due to him during the notice period. In the event of a termination of employment other than a termination for Cause occurring prior to July 1, 2022, the Company will pay Mr. Blachar an amount equal to six times his monthly salary. In addition, in the event of a termination of Mr. Blachar’s employment other than for “Cause,” he is eligible to receive (i) an amount equal to the difference between (x) the product of his last month’s salary by the term of his employment and (y) the sums accumulated under his pension and/or management insurance on account of his severance pay, including any profits and differentials, and (ii) a pro-rata portion of his annual cash bonus based on the number of months he was actually employed at the Company in such fiscal year. The Blachar Employment Agreement provides that the post-employment restrictive covenants set forth in his initial employment agreement with the Company, dated January 6, 2013, will continue to remain in effect (“Prior Employment Agreement”). Under his Prior Employment Agreement, Mr. Blachar is subject to certain non-competition and non-solicitation provisions for a period of 12 months following his termination of employment.
Assaf Ginzburg
In connection with his appointment as CFO, Mr. Ginzburg entered into an employment agreement with Ormat Systems, dated May 10, 2020 (the “Ginzburg Employment Agreement”). Pursuant to the Ginzburg Employment Agreement, Mr. Ginzburg is entitled to receive a gross monthly salary of NIS 95,000, which salary is linked to changes in the cost of living index in Israel, and is eligible for an annual bonus based on criteria to be established by Ormat Systems and, subject to Board approval, to participate in the Company’s equity incentive plan. The Ginzburg Employment Agreement sets forth other terms of employment, which terms are generally applicable to all of Ormat Systems’ employees, covering matters such as vacation, health and other benefits, including subject to Mr. Ginzburg’s election, coverage by Ormat Systems’ management insurance plan or pension fund, to which Ormat Systems will contribute a percentage of Mr. Ginzburg’s salary, contributions by Ormat Systems to an education fund and use of a company-leased car.
ORMAT TECHNOLOGIES, INC. | 2024 PROXY STATEMENT 47
In addition, under the Ginzburg Employment Agreement, either party may terminate the employment relationship upon four months’ prior written notice or, in the event of termination for “Cause” (as defined in the Ginzburg Employment Agreement), immediately. Ormat Systems may determine not to take advantage of the full notice period and may terminate Mr. Ginzburg’s employment at any time during such notice period. In the event of such termination, Ormat Systems will pay to Mr. Ginzburg his salary and other related benefits due to him during the notice period. In addition, in the event of a termination of employment not for Cause, Mr. Ginzburg will be eligible to receive a pro-rata portion of his annual bonus for the year of termination.
The Ginzburg Employment Agreement contains non-competition and non-solicitation provisions that are designed to restrict Mr. Ginzburg from the following activities for a period of 12 months following his termination of employment: (i) holding an interest (other than a minority interest in a public company) in a competitive business; (ii) engaging in activities competitive with the business; (iii) soliciting any employee of the Subsidiary and its affiliates; and (iv) soliciting any customers (the “Restrictive Covenants”).
Shimon Hatzir
Mr. Hatzir entered into an employment agreement with Ormat Systems on October 1, 2018 (the “Hatzir Employment Agreement”), pursuant to which Mr. Hatzir is entitled to receive a gross monthly salary of NIS 77,000, which salary is linked to changes in the cost of living index, and is eligible for an annual bonus based on criteria to be established by Ormat Systems and, subject to Board approval, to participate in the Company’s equity incentive plan. The Hatzir Employment Agreement sets forth other terms of employment, which terms are generally applicable to all of Ormat Systems’ employees, covering matters such as vacation, health, and other benefits, including subject to Mr. Hatzir’s election, coverage by Ormat Systems’ management insurance plan or pension fund, to which Ormat Systems will contribute a percentage of Mr. Hatzir’s salary, contributions by Ormat Systems to an education fund and use of a company-leased car.
In addition, under the Hatzir Employment Agreement, either party may terminate the employment relationship upon two months’ prior written notice or, in the event of termination for “Cause” (as defined in the Hatzir Employment Agreement), immediately. Ormat Systems may determine not to take advantage of the full notice period and may terminate Mr. Hatzir’s employment at any time during such notice period. In the event of such termination, Ormat Systems will pay to Mr. Hatzir his salary and other related benefits due to him during the notice period. Following the notice period, subject to his release of any claims against Ormat Systems, Mr. Hatzir will be entitled to receive his salary and all social benefits for an additional four months. The Hatzir Employment Agreement contains the Restrictive Covenants.
Ofer Ben Yosef
Mr. Ben Yosef entered into an employment agreement with Ormat Systems in April 2020 (the “Ben Yosef Employment Agreement”), pursuant to which Mr. Ben Yosef is entitled to receive a gross monthly salary of NIS 85,000, which salary is linked to changes in the cost of living index, and is eligible for an annual bonus based on criteria to be established by Ormat Systems and, subject to Board approval, to participate in the Company’s equity incentive plan. The Ben Yosef Employment Agreement sets forth other terms of employment, which terms are generally applicable to all of Ormat Systems’ employees, covering matters such as vacation, health, and other benefits, including subject to Mr. Ben Yosef’s election, coverage by Ormat Systems’ management insurance plan or pension fund, to which Ormat Systems is to contribute a percentage of Mr. Ben Yosef’s salary, contributions by Ormat Systems to an education fund and use of a company-leased car.
In addition, under the Ben Yosef Employment Agreement, either party may terminate the employment relationship upon four months’ prior written notice or, in the event of termination for “Cause” (as defined in the Ben Yosef Employment Agreement), immediately. Ormat Systems may determine not to take advantage of the full notice period and may terminate Mr. Ben Yosef’s employment at any time during such notice period. In the event of such termination, Ormat Systems will pay to Mr. Ben Yosef his salary and other related benefits due to him during the notice period. The Ben Yosef Employment Agreement contains the Restrictive Covenants.
Jessica Woelfel
Ms. Woelfel entered into an employment agreement with the Company on February 1, 2023, pursuant to which Ms. Woelfel would be entitled to receive, in the event the Company terminates her employment without “Cause” (as defined in her employment agreement) and subject to the execution of a release and compliance with her restrictive covenants, four months of continued base salary, any earned but unpaid annual bonus, a prorated target annual bonus for the year of termination and eligibility for reimbursements of COBRA premiums for four months. Ms. Woelfel’s employment agreement includes 12 month post-termination non-competition and employee and customer non-solicit restrictions, as well as perpetual confidentiality and non-disparagement provisions.
ORMAT TECHNOLOGIES, INC. | 2024 PROXY STATEMENT 48
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END
The following table sets forth the outstanding equity awards of our NEOs as of December 31, 2023:
| | | | | Option Awards | | Stock Awards |
| Name | | Grant
Date | | Number of
Securities
Underlying
Unexer-
cised
Options (#)
Exercisable | | Number of
Securities
Underlying
Unexercised
Options (#)
Unexercis-
able | | Option
Exercise
Price
($) | | Option
Expiration
Date | | Number of
Shares or
Units of
Stock
That
Have Not
Vested
(#) | | Market
Value of
Shares or
Units of
Stock
That
Have Not
Vested
($)(11) | | Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares
That
Have Not
Vested
(#) | | Equity
Incentive
Plan
Awards:
Market
Value of
Unearned
Shares
That
Have Not
Vested
($)(11) |
| Doron Blachar | | July 1, 2020 | | 34,023 | | 11,341 | (1) | 63.40 | | July 1, 2026 | | — | | — | | — | | — |
| | | July 1, 2020 | | — | | — | | — | | — | | 1,505 | (2) | 114,064 | | | | |
| | | July 1, 2020 | | — | | — | | — | | — | | 981 | (3) | 74,350 | | | | |
| | | March 1, 2022 | | 2,476 | | 7,427 | (4) | 71.15 | | March 1, 2028 | | — | | — | | — | | — |
| | | March 1, 2022 | | — | | — | | — | | March 1, 2028 | | 2,414 | (5) | 182,957 | | — | | — |
| | | March 1, 2022 | | — | | — | | — | | March 1, 2028 | | — | | — | | 2,987 | (6) | 226,384 |
| | | March 21, 2023 | | — | | — | | — | | — | | 9,009 | (7) | 682,792 | | | | |
| | | March 21, 2023 | | — | | — | | — | | — | | | | | | 3,397 | (8) | 257,459 |
| | | March 21, 2023 | | — | | — | | — | | — | | | | | | 6,786 | (9) | 514,311 |
| Assaf Ginzburg | | May 12, 2020 | | 19,143 | | 6,381 | (1) | 68.34 | | May 12, 2026 | | — | | — | | — | | — |
| | | May 12, 2020 | | — | | — | | — | | — | | 838 | (2) | 63,513 | | — | | — |
| | | May 12, 2020 | | — | | — | | — | | — | | 492 | (3) | 37,289 | | | | — |
| | | March 1, 2022 | | 1,376 | | 4,126 | (4) | 71.15 | | March 1, 2028 | | — | | — | | — | | — |
| | | March 1, 2022 | | — | | — | | — | | — | | 1,342 | (5) | 101,710 | | — | | — |
| | | March 1, 2022 | | — | | — | | — | | — | | 1,000 | (10) | 75,790 | | — | | — |
| | | March 1, 2022 | | — | | — | | — | | — | | — | | — | | 1,660 | (6) | 125,812 |
| | | March 21, 2023 | | — | | — | | — | | — | | 4,254 | (7) | 322,411 | | — | | — |
| | | March 21, 2023 | | — | | — | | — | | — | | — | | — | | 1,604 | (8) | 121,568 |
| | | March 21, 2023 | | — | | — | | — | | — | | — | | — | | 3,205 | (9) | 242,907 |
| Shimon Hatzir | | June 15,2020 | | 15,000 | | 5,000 | (1) | 69.14 | | June 15, 2026 | | — | | — | | — | | — |
| | | December 31, 2020 | | 430 | | 143 | (1) | 90.28 | | December 31, 2026 | | — | | — | | — | | — |
| | | December 31, 2020 | | — | | — | | — | | — | | 526 | (2) | 39,866 | | — | | — |
| | | March 1, 2022 | | 1,101 | | 3,300 | (4) | 71.15 | | March 1, 2028 | | — | | — | | — | | — |
| | | March 1, 2022 | | — | | — | | — | | March 1, 2028 | | 1,072 | (5) | 81,342 | | — | | — |
| | | March 1, 2022 | | — | | — | | — | | March 1, 2028 | | 1,500 | (10) | 113,685 | | — | | — |
| | | March 1, 2022 | | — | | — | | — | | March 1, 2028 | | — | | — | | 1,328 | (6) | 100,650 |
| | | March 21, 2023 | | — | | — | | — | | — | | 3,504 | (7) | 265,568 | | | | |
| | | March 21, 2023 | | — | | — | | — | | — | | — | | — | | 1,321 | (8) | 100,119 |
| | | March 21, 2023 | | — | | — | | — | | — | | — | | — | | 2,639 | (9) | 200,010 |
ORMAT TECHNOLOGIES, INC. | 2024 PROXY STATEMENT 49
| | | | | Option Awards | | Stock Awards |
| Name | | Grant
Date | | Number of
Securities
Underlying
Unexer-
cised
Options (#)
Exercisable | | Number of
Securities
Underlying
Unexercised
Options (#)
Unexercis-
able | | Option
Exercise
Price
($) | | Option
Expiration
Date | | Number of
Shares or
Units of
Stock
That
Have Not
Vested
(#) | | Market
Value of
Shares or
Units of
Stock
That
Have Not
Vested
($)(11) | | Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares
That
Have Not
Vested
(#) | | Equity
Incentive
Plan
Awards:
Market
Value of
Unearned
Shares
That
Have Not
Vested
($)(11) |
| Ofer Ben Yosef | | May 12, 2020 | | 15,954 | | 5,317 | (1) | 68.34 | | May 12, 2026 | | | | | | | | |
| | | May 12, 2020 | | — | | — | | — | | — | | 698 | (2) | 52,902 | | — | | — |
| | | May 12, 2020 | | — | | — | | — | | — | | 410 | (3) | 31,074 | | | | |
| | | March 1, 2022 | | 1,101 | | 3,300 | (4) | 71.15 | | March 1, 2028 | | — | | — | | — | | — |
| | | March 1, 2022 | | — | | — | | — | | March 1, 2028 | | 1,073 | (5) | 81,323 | | — | | — |
| | | March 1, 2022 | | — | | — | | — | | March 1, 2028 | | | | — | | 1,328 | (6) | 100,650 |
| | | March 21, 2023 | | — | | — | | — | | — | | 2,502 | (7) | 189,627 | | | | |
| | | March 21, 2023 | | — | | — | | — | | — | | — | | | | 944 | (8) | 71,546 |
| | | March 21, 2023 | | — | | — | | | | — | | — | | | | 1,885 | (9) | 142,864 |
Jessica Woelfel | | August 8, 2019 | | 4,000 | (1) | — | | 71.71 | | August 8, 2025 | | | | | | | | |
| | June 15, 2020 | | 7,500 | | 2,500 | (1) | 69.14 | | June 15, 2026 | | | | | | | | |
| | March 31, 2021 | | 3,201 | | 3,200 | (1) | 78.53 | | March 31, 2027 | | | | | | | | |
| | | March 1, 2022 | | — | | 3,851 | (1) | 71.15 | | March 1, 2028 | | — | | — | | — | | — |
| | | March 1, 2022 | | — | | — | | — | | — | | 939 | (10) | 71,167 | | — | | — |
| | | March 1, 2022 | | — | | — | | — | | — | | — | | — | | 1,162 | (6) | 88,068 |
| | | March 21, 2023 | | — | | — | | — | | — | | 2,252 | (7) | 170,679 | | | | |
| | | March 21, 2023 | | — | | — | | — | | — | | | | | | 849 | (8) | 64,346 |
| | | March 21, 2023 | | — | | — | | — | | — | | | | | | 1,697 | (9) | 128,616 |
| (1) | Represents SARs which vest and become exercisable 50% on the second anniversary of the grant date and 25% on each of the third and fourth anniversaries of the grant date. Each SAR represents the right to receive shares of Common Stock with a value equal to the amount by which the market value of the shares in respect of which the SAR is exercised exceeds the grant price set forth in the SAR, multiplied by the number of shares in respect of which the SAR is exercised. Prior to 2016, the Company used the Black-Scholes formula to evaluate the fair value of the stock based compensation. Starting in 2016, the fair value of each grant of stock-based awards on the date of grant is estimated using the Exercise Multiple-Based Lattice SAR-Pricing Model and the assumptions noted in the following table. |
| | | Year Ended December 31, | |
| | | 2017 | | | 2016 | | | 2015 | |
Risk-free interest rates | | | 1.9 | % | | | 1.3 | % | | | 1.4 | % |
Expected lives (in years) | | | 3.1 | | | | 4.5 | | | | 4.0 | |
Dividend yield | | | 0.62 | % | | | 1.1 | % | | | 0.7 | % |
Expected volatility | | | 25.1 | % | | | 30.7 | % | | | 29.2 | % |
Forfeiture rate | | | 0.0 | % | | | 8.4 | % | | | 0.0 | % |
The expected lives represents the period that our stock-based awards are expected to be outstanding. In the absence of enough historical information, the expected lives were determined using the simplified method giving consideration to the contractual term and vesting schedule. The dividend yield forecast is expected to be 20% of our annual net profits, which is equivalent to a 0.7% annual weighted average dividend rate in the year ended December 31, 2017. The risk-free interest rate was based on the yield from U.S. constant treasury maturities bonds with an equivalent term. The forfeiture rate is based on trends in actual stock-based awards forfeitures.
(4) | This column reflects the amount of any cash awards granted under the Management Plan, including the discretionary component of any such cash award. Consistent with the terms of the Management Plan, these amounts reflect cash awards earned under the Management Plan for 2017 which are paid in 2018. |
(5) | Includes payments of car-related expenses in the amount of $26,259; Israel National Insurance in the amount of $10,101; U.S. Social Security in the amount of $9,181; health insurance in the amount of $245; convalescence pay in the amount of $1,771; Education Fund in the amount of $3,957 and perquisites amounting to $3,763. |
(6) | Includes payments of car-related expenses in the amount of $22,632; Israel National Insurance in the amount of $10,101; health insurance in the amount of $67; convalescence pay in the amount of $1,771; Education Fund in the amount of $3,957; and perquisites amounting to $4,542. |
(7) | Includes payments of car-related expenses in the amount of $13,935; Israel National Insurance in the amount of $10,101; health insurance in the amount of $67; convalescence pay in the amount of $1,771; Education Fund in the amount of $3,957; vacation redemption in the amount of $13,315 and perquisites amounting to $3,457. |
(8) | Includes payments of car-related expenses in the amount of $13,230; Israel National Insurance in the amount of $10,101; health insurance in the amount of $67; convalescence pay in the amount of $1,771; Education Fund in the amount of $3,957; and perquisites amounting to $3,394. |
(9) | Includes payments of social security in the amount of $28,128; health insurance in the amount of $22,879 and 401(k) plan contributions amounting to $13,832. |
The following table sets forth grants of plan-based awards to each NEO during the year ended December 31, 2017:
Name | Grant Date | Non-Equity Incentive Plan Compensation ($)(3)
| All Other Option Awards: Number of Securities Underlying Options(2)
| Exercise Price of Option Awards ($/Share) | Grant Date Fair Value of Option Awards ($)
(1)
|
Isaac Angel(4)
(2) | | 762,500 | | | |
Doron Blachar | November 7, 2017
| 215,000 | 9,671
68,252
| —
63.35
| Represents RSUs 62.70 SARs 17.20
|
Zvi Krieger | November 7, 2017
| 210,000 | 1,337
9,438
| —
63.35
| RSUs 62.70
SARs 17.20
|
Shlomi Argas | November 7, 2017 | 154,000 | 1,337
9,438
| —
63.35
| RSUs 62.70
SARs 17.20
|
Bob Sullivan | November 7, 2017
| 75,000 | 1,337
9,438
| —
63.35
| RSUs 62.70
SARs 17.20
|
| (1) | These amounts are the grant date fair value of each award, computed in accordance with accounting guidance for stock compensation using the binomial valuation model. |
| (2) | Includes SARs and RSUs. |
| (3) | These amounts reflect cash awards earned under the Management Plan for 2017 which are paid in 2018, consistent with the terms of the Management Plan. These amounts include all cash awards granted under the Management Plan, including the discretionary component of any such cash award. |
| (4) | On December 5, 2017, the Compensation Committee and our Board rescinded and voided the grant of 243,300 SARs and 34,500 RSUs, comprising all of the equity incentive awards granted on November 7, 2017 to our CEO pursuant to the 2012 ICP. This was done because the grant and the awards exceeded the annual limit for 2017 under the terms of the 2012 ICP. |
The following are descriptions of the material terms of our NEOs' employment agreements, as well as other factors that may help with an understanding of the data disclosed in the Summary Compensation Table and under the heading "Grants of Plan-Based Awards" above.
General
Each of Mr. Angel, our CEO, Mr. Blachar, our CFO, Mr. Krieger, our Executive Vice President, Electricity Segment, and Mr. Argas, our Executive Vice President, Operations and Products, is employed by Ormat Systems, one of the Company's subsidiaries. Mr. Sullivan, our Executive Vice President, Business Development, Sales and Marketing is employed by the Company.
Each of Mr. Angel, Mr. Blachar, Mr. Krieger and Mr. Argas is party to an employment agreement with Ormat Systems (and, in the case of Mr. Angel, with the Company as well) that sets forth their respective terms of employment, which terms are generally applicable to all of Ormat Systems' employees, covering matters such as vacation, health, and other benefits. Mr. Sullivan has not entered into any such employment agreement with either Ormat Systems or the Company.
Under the employment agreements of Mr. Krieger, Mr. Argas and Mr. Blachar, either Ormat Systems or the applicable employee may terminate the employment relationship upon between 30 and 120 days' prior written notice, while Mr. Angel's employment agreement permits termination by the Company or Mr. Angel upon at least six months' prior written notice. However, termination for cause does not require any prior notice and an employee who is terminated for cause is not entitled to any subsequent payments.
The actual salary and other compensation arrangements of Mr. Angel, Mr. Blachar, Mr. Krieger, Mr. Argas and Mr. Sullivan are agreed upon separately with each employee. Except for Mr. Sullivan, each of these individuals is also covered by Ormat Systems' management insurance plan, to which Ormat Systems contributes a percentage of such individual's salary, and which covers any compensation that such individual may be entitled to receive upon termination, such as severance pay pursuant to Israeli law for Israel-based employees. In addition, each of the employees has the benefit of the use of a company-leased car.
The employment agreements of Mr. Angel, Mr. Blachar, Mr. Krieger and Mr. Argas also contain provisions that are designed to restrict them from engaging in activities competitive with the business of the Company for a period ranging from 12 to 36 months following termination of employment and, in the case of the employment agreements of Mr. Angel and Mr. Blachar, from soliciting any employee, customer or supplier of the Company for a period ranging from 12 to 24 months following termination of employment.
Isaac Angel
Pursuant to Mr. Angel's employment agreement, Mr. Angel is entitled to the following:
| · | Salary: Annual gross salary of NIS 2,141,040 (equal to approximately $619,335 based on the representative exchange rate set by the Bank of Israel on December 31, 2017), which is linked to the Israeli consumer price index.
|
| · | Annual Performance Bonus: If the Company's annual consolidated net income is above $20 million, an annual bonus equal to (a) 0.75% of the Company's annual consolidated net income up to $50 million (inclusive) and (b) 1.00% of the portion of Company's annual consolidated net income that is above $50 million, if any; provided that the annual bonus shall not exceed $750,000. On November 7, 2017, the Compensation Committee and the Board approved an increase in the maximum annual bonus payable to our CEO from $750,000 to $900,000. The bonus calculation will be as follows: 75% of the annual cash bonus will be based on achievement of specific performance metrics that measure the financial performance of the Company and 25% of the annual cash bonus will be determined at the discretion of the Compensation Committee based on the achievement of other goals, such as diversity, social and environmental responsibility and merger and acquisition activities. The increase is effective as of December 1, 2017.
|
| · | Initial Option Grant: Stock options granted on April 1, 2014 to purchase 100,000 shares of Common Stock at an exercise price of $29.52 per share, the closing price of our Common Stock on the date of grant, under the 2012 ICP. The stock options vest in one installment on the seven year anniversary of the date of grant and expire seven and a half years following the date of grant.
|
| · | Second Option Grant: Stock options granted on April 1, 2014 to purchase 300,000 shares of Common Stock at an exercise price equal to $29.52 per share, the closing price of our Common Stock on the date of grant, under the 2012 ICP. The stock options vest 25% on each of the two, three, four and five year anniversaries of the date of grant and expire six years following the date of grant.
|
In connection with the ORIX Transaction, the remaining vesting period applicable to unvested stock options to purchase 350,000 shares of Common Stock awarded to our CEO under the two grants described above was accelerated and, upon exercise of such options, such shares were sold to ORIX as part of the ORIX Transaction.
| · | Third Option Grant: 100,000 SARs granted on June 14, 2016 with an exercise price equal to $42.87 per share of Common Stock underlying the SARs, the closing price of our Common Stock on the date of grant, under the 2012 ICP. The SARs vest in 3 equal installments on the two, three and four year anniversaries of the date of grant and expire seven years following the date of grant. The vesting period for these SARs was accelerated in connection with the ORIX Transaction. The Common Stock acquired through the exercise of these accelerated SARs that was not sold in connection with the ORIX Transaction is subject to a Lockup Agreement. Please see Note (1) to the “Outstanding Equity Awards at Fiscal Year-End” table below.
|
| · | Termination: Each of the Company and Mr. Angel may terminate the employment agreement, for any reason, by providing six months' prior notice of such termination (the "Notice Period"). Other than in the case of termination of employment by the Company for "Cause" (as defined in the employment agreement), Mr. Angel will be entitled to continue to receive his compensation during the Notice Period.
|
| · | Termination in connection with a Change of Control: In the event that Mr. Angel's employment is terminated by the Company without "Cause", or he resigns for a "Good Reason" (as defined in the employment agreement) within two (2) months before, or twelve months following, the consummation of a "Change of Control" (as defined in the Employment Agreement), Mr. Angel is entitled to the following: (i) the Notice Period (and consequently, the period during which compensation is payable to Mr. Angel) will be extended from six months to twelve months; and (ii) all the stock options and SARs described above will be accelerated and will become fully vested and exercisable.
|
See also under "Potential Payments upon Termination or Change in Control" below.
Outstanding Equity Awards at Fiscal Year-EndThe following table sets forth the outstanding equity awards of our NEOs as of December 31, 2017:
Option and Stock Awards |
Name | Number of Securities
Underlying Unexercised Options (#) Exercisable
| Number of Securities
Underlying Unexercised Options (#) Unexercisable
| Option
Exercise Price ($)
| Option Expiration Date |
Isaac Angel | 100,000(1)
| | 42.87 | June 14, 2022 |
| | | | |
Doron Blachar | 42,500(2)
| | 42.87 | June 14, 2022 |
| | 68,252(4)
| 63.35 | November 7, 2023 |
| | 9,671(5)
| — | — |
| | | | |
Zvi Krieger | | 42,500(3)
| 42.87 | June 14, 2022 |
| | 9,438(4)
| 63.35 | November 7, 2023 |
| | 1,337(5)
| — | — |
| | | | |
| | | | |
Shlomi Argas | | 42,500(3)
| 42.87 | June 14, 2022 |
| | 9,438(4)
| 63.35 | November 7, 2023 |
| | 1,337(5)
| — | — |
| | | | |
Bob Sullivan | 40,000(6)
| | 23.34 | June 4, 2019 |
| | 42,500(3)
| 42.87 | June 14, 2022 |
| | 9,438(4)
| 63.35 | November 7, 2023 |
| | 1,337(5)
| — | — |
| (1) | The vesting period for these SARs was accelerated in connection with the ORIX Transaction (the “Accelerated Stock Options”) and are subject to a Lockup Agreement entered into between Mr. Angel and the Company on May 4, 2017. For a period of one year following the date of the Lockup Agreement (i.e. May 4, 2018), shares of Common Stock acquired through the exercise of the portion of the Accelerated Stock Options granted to Mr. Angel on June 14, 2016 may not be sold, transferred or otherwise disposed of. For a period of 180 days following the foregoing initial lockup period, no more than 50,000 shares of Common Stock acquired through the exercise of the portion of the Accelerated Stock Options granted to him on June 14, 2016 may be sold, transferred or otherwise disposed of. |
| (2) | These are Accelerated Stock Options subject to an Undertaking entered into between Mr. Blachar and the Company on May 4, 2017. Until June 30, 2018, shares of Common Stock acquired through the exercise of the portion of the Accelerated Stock Options granted to Mr. Blachar on June 14, 2016 may not be sold, transferred or otherwise disposed of, unless Mr. Blachar resigns or is terminated from his position with the Company for any reason prior to June 30, 2018. |
| (3) | These are SARs which begin to vest two years after the June 2016 grant date, with 50% of the SARs vesting on the second anniversary of the grant date and 25% of the SARs vesting on each of the third and fourth anniversaries of the grant date. Each RSU represents the right to receive one share of Common Stock upon vesting. |
| (3) | Represents the number of RSUs that are eligible to vest, based on the number of PSUs that vested based on our relative TSR on the third anniversary of the grant date. The PSUs vested 50% on the second anniversary of the grant date, 25% on the third anniversary of the grant date, and the remaining 25% of the PSUs converted into RSUs and will vest on the fourth anniversary of the grant date (with the total amount that vested reflecting relative TSR performance as of the third anniversary of the grant date). Each RSU represents the right to receive one share of Common Stock upon vesting. |
| (4) | Represents SARs willwhich vest and become fully exercisable in June 2022.25% on each of the first, second, third and fourth anniversaries of the grant date. Each SAR represents the right to receive shares of Common Stock with a value equal to the amount by which the market value of the shares in respect of which the SAR is exercised exceeds the grant price set forth in the SAR, multiplied by the number of shares in respect of which the SAR is exercised. |
| (5) | (4) | These are SARsRepresents RSUs which will vest 25% on each of the one, two, threefirst, second, third and four yearfourth anniversaries of the November 2017 grant date. The SARs will become exercisable in November 2021. Each SAR represents the right to receive shares of Common Stock with a value equal to the amount by which the market value of the shares in respect of which the SAR is exercised exceeds the grant price set forth in the SAR, multiplied by the number of shares in respect of which the SAR is exercised. |
| (5) | These are RSU which will vest 25% on each of the one, two, three and four year anniversaries of the November 2017 grant date. Each RSU represents the right to receive one share of Common Stock upon vesting. |
| (6) | (6) | TheseRepresents the number of PSUs that are SARs which beganeligible to vest, two years afterbased on our relative TSR from the June 2013 grant date until the third anniversary thereof. In accordance with 25%SEC rules and based on the relative TSR from the grant date through the end of Fiscal 2023, this table shows the SARs vestingnumber of shares underlying the outstanding PSU award assuming a payout at the threshold level. The PSUs vest 25% on each of the first, second, third and thirdfourth anniversaries of the grant date (with the total amount ultimately vested reflecting relative TSR performance as of the third anniversary of the grant date). Each PSU represents the right to receive one share of Common Stock upon vesting. |
| (7) | Represents RSUs which vest 25% on each of the first, second, third and fourth anniversaries of the remaining 50%grant date. Each RSU represents the right to receive one share of Common Stock upon vesting. |
| (8) | Represents the number of TSR PSUs that are eligible to vest, based on our relative TSR from the grant date until the third anniversary thereof. In accordance with SEC rules and based on the relative TSR from the grant date through the end of Fiscal 2023, this table shows the number of shares underlying the outstanding TSR PSU award assuming a payout at the threshold level. The PSUs vest 25% on each of the first, second, third and fourth anniversaries of the grant date (with the total amount ultimately vested reflecting relative TSR performance as of the third anniversary of the grant date). Each TSR PSU represents the right to receive one share of Common Stock upon vesting. |
ORMAT TECHNOLOGIES, INC. | 2024 PROXY STATEMENT 50
| (9) | Represents the number of MW PSUs that are eligible to vest, based on our MW targets from the grant date until the third anniversary thereof. In accordance with SEC rules and based on the commercial operations date MW progress through the end of Fiscal 2023, this table shows the number of shares underlying the outstanding MW PSU award assuming a payout at the target level. The MW PSUs vest 25% on each of the first, second, third and fourth anniversaries of the grant date (with the total amount ultimately vested reflecting MW growth performance as of the third anniversary of the grant date). Each MW PSU represents the right to receive one share of Common Stock upon vesting. |
| (10) | Represents RSUs which vest 33% on the second anniversary of the grant date and 67% on the third anniversary of the grant date. The SARs became fully exercisable in June 2017 and will expire on June 2019. Each SARRSU represents the right to receive sharesone share of Common Stock with a value equal to the amount by which theupon vesting. |
| (11) | The market value is based on the closing price of our Common Stock on December 29, 2023, which was the shares in respectlast trading day of which the SAR is exercised exceeds the grant price set forth in the SAR,fiscal 2023, of $75.79, multiplied by the number of underlying shares in respect of which the SAR is exercised.Common Stock. All amounts shown for PSUs are shown at threshold level of achievement representing a 50 percent payout. |
OurOPTION EXERCISES AND STOCK VESTED IN 2023
The following table provides information regarding the exercise of SARs and vesting of RSUs held by our NEOs exercised options to purchase 528,775 shares of our Common Stock during the year ended December 31, 2017.2023.
| | | Option Awards | | Stock Awards |
| Name | | Number of Shares
Acquired on Exercise
(#)(1) | | Value Realized on
Exercise
($)(2) | | Number of Shares
Acquired on Vesting
(#) | | Value Realized on
Vesting
($)(3) |
| Doron Blachar | | 68,252 | | 851,754 | | 5,253 | | 426,905 |
| Assaf Ginzburg | | — | | — | | 2,761 | | 232,153 |
| Shimon Hatzir | | — | | — | | 884 | | 71,064 |
| Ofer Ben Yosef | | — | | — | | 2,286 | | 192,142 |
| Jessica Woelfel | | — | | — | | 313 | | 27,312 |
| (1) | Represents the gross number of shares of Common Stock underlying exercised SARs. The net number of shares of Common Stock acquired by Mr. Blachar in connection with the exercised SARs was 11,315. |
| (2) | The value realized on exercise of Mr. Blachar’s SARs awards is based on the gross number of shares exercised multiplied by the difference between the closing market price of our Common Stock on the date of exercise of the SARs award and the exercise price of the SARs. |
| (3) | Value realized on vesting is based on the fair market value of closing market price of our Common Stock at the time of vesting and includes the value of payments in lieu of fractional shares. |
PENSION PLANS
We did not maintain a pension plan requiring disclosure under SEC rules for any of our NEOs in Fiscal 2023.
NON-QUALIFIED DEFERRED COMPENSATION
We did not maintain a non-qualified deferred compensation plan requiring disclosure under SEC rules for any of our NEOs in Fiscal 2023.
ORMAT TECHNOLOGIES, INC. | 2024 PROXY STATEMENT 51
Name | Number of Options/ SARs Exercised (#) | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) |
| Isaac Angel | 400,000 | 400,000 | $10,591,990 |
| Doron Blachar | 62,500 | 62,500 | $2,178,887.87 |
| Zvi Krieger | 25,000 | 15,267 | $911,746.59 |
| Shlomi Argas | 55,000 | 33,967 | $2,056,112.08 |
| Bob Sullivan | 27,500 | 17,041 | $1,047,422.91 |
Potential PaymentsPOTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
For 2023, our named executive officers were entitled to certain benefits upon Termination a termination and/or change in control pursuant to their employment agreements and equity award agreements. Pursuant to the Change in Control
The employment agreements of our executives contain the following terms regarding post-termination and change Severance Plan (the “Severance Plan”), in control payments:
Isaac Angel. Pursuant to the terms of Mr. Angel's employment agreement, if the Company or Mr. Angel terminates his employment agreement for any reason other than for "Cause", Mr. Angel will be entitled to his salary, bonus and other benefits for the applicable Notice Period. The Notice Period in Mr. Angel's employment agreement is six months. In the event of termination other than for "Cause"that certain management employees’, Mr. Angel will also be entitled to an assignment of his "executive manager’s insurance policy" and funds accumulated under such policy based on deductions from his base salary, and a payment ofincluding the difference, if any, between the sums accumulated under such policy on account of his severance pay, and the amount of severance pay to which he is entitled based on his monthly base salary at the time of termination multiplied by the number of years he has been employed by the Company or Ormat Systems.
Mr. Angel is entitled to change of control payments if within two months prior to or twelve months following the occurrence of a "Change of Control"NEOs (the “Eligible Participants”), his employment is terminated by the Company without Cause within three months prior to and 24 months following a Change in Control, other than for "Cause"due to death or if heDisability, or an Eligible Participant resigns for "Good Reason". In either of these events, Mr. Angel's Notice Period will be twelve months instead of six months, and all options and SARs granted to Mr. Angel will be accelerated and will become fully vested and exercisable (or payable) as of the date of the "Change of Control" (in the event the termination or resignation occurred prior to or at the date of the "Change of Control") or as of the termination date (in the event the termination or resignation occurred after the date of "Change of Control"). We will also be required to pay him any compensation to which he is entitled during the extended Notice Period.
On November 7. 2017 the Compensation Committee and our Board approved certain changes to "Change of Control"Good Reason (all as defined in Mr. Angel's employment agreementthe Severance Plan) and subject to the effectiveness of a release and continued compliance with restrictive covenants, the Eligible Participant is entitled to the following: (i) cash severance payable in a lump sum equal to 200% or 150% (depending on if the Eligible Participant is designated as of Decembertier 1 2017 “Change of Control” applicable for Mr. Angel and Mr. Blachar is defined as the consummation of anyor 2, respectively) of the following events, in a single transaction or in a seriessum of related transactions: (i) the acquisition of the Company by another person(s) or entity by meanshis/her base salary and target bonus; (ii) payment of a merger, reorganization, consolidation, or similar event in which such person(s) will hold, immediately after such acquisition, more than 50% of the outstanding voting power of the Company, the acquiring, resulting or surviving corporation; or (ii) the sale of all or substantially all of the assets of us (on a consolidated basis) to another entity (except an entity that is one of the Company's subsidiaries or affiliates or affiliated with any of the Company's then-current principal stockholders). The term "Change of Control" excludes any transaction or series of related transactions that are part of an internal voluntary reorganization and/or restructuring of the Company and/or its subsidiaries and affiliates that does not involve the acquisition of control by a third party not affiliated with the Company, its subsidiaries and affiliates, such as a change in the state of incorporation of the Company and/or acquisition by the Company of its own shares from any person.
"Good Reason" is defined in Mr. Angel's employment agreement as (i) a reduction in salary or diminution of Mr. Angel's annual bonus opportunity; (ii) diminution in authority, responsibilities or duties; (iii) diminution in the budget over which Mr. Angel has authority; (iv) an adverse change in reporting responsibilities; (v) relocation of Mr. Angel's main office; and (vi) any other breach of the employment agreement.
"Cause" is defined in Mr. Angel's employment agreement as (i) any of the reasons mentioned in Sections 16-17 of the Israel Severance Pay Law, 1963; (ii) conviction for any felony involving moral turpitude or affecting the Company or its affiliates (including a plea of guilty or no contest); (iii) conviction for the embezzlement of the Company's or its affiliates funds or an attempt to do so; (iv) conduct by Mr. Angel that constitutes gross misconduct or gross neglect of his duties to the Company or its affiliates, as well as any breach of Mr. Angel's fiduciary duties to the Company or its affiliates; and (v) breach of any material term of the employment agreement; provided that such breach was not cured (if capable of being cured) by Mr. Angel within 14 days following written notice thereof.
Doron Blachar. In the event of a "change in control" as defined above, all options, SARs and RSU granted to Mr. Blachar will be accelerated and will become fully vested and immediately exercisable (or payable). If Mr. Blachar’s employment is terminated for any reason, he will be entitled to receive any unpaid annualprorated target bonus in respect of the year of termination payable in a lump sum; (iii) for U.S. participants, eligibility for monthly reimbursements of COBRA premiums for 18 months; and (iv) accelerated vesting of all equity awards that were outstanding as of the Change in Control, with any completed fiscal year that has ended on or priorperformance-vesting awards to be deemed vested at actual level of performance determined at the time of such termination (or target level if actual performance cannot reasonably be determined). The Severance Plan supersedes the severance provisions in connection with a Change in Control previously applicable to the termination date. Additionally, subjectNEOs described above who have chosen to achievementparticipate. The above severance benefits are in lieu of any applicable performance conditions, Mr. Blachar willother severance benefits to which the participant may be entitled to receive the annual bonus that would otherwise have been earned in respectconnection with a Change in Control, except for certain statutory severance entitlements under Israeli law. As a condition of the fiscal year inparticipation, Eligible Participants must execute and comply with restrictive covenants, which termination occurs, prorated to the termination date. The Company is required to make such payments on the days on which they would have otherwise been made had no termination occurredgenerally provide for post-termination non-competition and in no event later than twoemployee and a halfcustomer non-solicit restrictions for periods of 12 or 18 months after the last day of the fiscal year in which termination occurred.
We believe that the change in control provisions in the employment agreements for our executives are appropriate to help ensure that, if a change in control occurs, our executives can act in the best interest of all our stockholders without concern for the uncertaintytiers 1 and without the distraction that would result from the effects a change in control could have on our executives' personal interests. We believe the purpose of these change in control provisions is to protect our NEOs from termination of employment that frequently occurs upon a change in control, rather than to provide a payment when the change in control occurs even though the NEO's employment is continued. We also believe that the level of post-termination payments for our NEOs is competitive2 respectively, as well as perpetual confidentiality and appropriate.
Except as set forth above, our executives do not have specific change in control payment provisions in their employment agreements (however, see above with respect to acceleration of vesting of equity-based awards).non-disparagement provisions. All of our
executivesNEOs are
entitleddesignated as Tier 2, and elected to
salary and payment ofparticipate in the Severance Plan, other
compensation duringthan Mr. Blachar.You should refer to the relevant notice period.
Certain of our executive officers are based in IsraelSeverance Plan, filed as an exhibit to the Company’s Annual Report on
a full-time or part-time basis, and thus are also entitled to lump sum severance pay amounting to their last monthly salary multiplied by the number of years of their serviceForm 10-K for Fiscal 2023, for the
Company under Israeli law. Our executive officers are also entitled to payments under our defined contribution plan. The employment agreementsactual definitions.ORMAT TECHNOLOGIES, INC. | 2024 PROXY STATEMENT 52
Required Tabular Disclosure for Potential Payments as of our current executive officers do not include non-compete or non-solicitation provisions, withDecember 31, 2023
As required by SEC rules, this section reflects the exception of the employment agreements of Mr. Angel and Mr. Blachar.
Estimated Payments and Benefits upon TerminationThe amount of compensation
and benefitsthat would have been payable to each of our NEOs in the event of termination
without cause orof such executive’s employment, assuming the termination occurred effective as
a consequence of
a change in control has been estimatedDecember 31, 2023.The following table presents potential payouts to our NEOs at year-end upon termination of employment in the table below.circumstances indicated pursuant to the terms of applicable plans and agreements. The Company does not provide excise tax gross-ups for change in control payments. There is no distinction inpayouts set forth below assume the calculation of the termination payments due to our executives in thetriggering event of termination without cause or termination upon a change in control, except in the case of our CEO, whose payments and benefits upon termination are described under "Potential Payments upon Termination or Change in Control" above. The amounts have been calculated based on the assumption that the terminationindicated occurred on December 31, 2017.2023, when the closing price of our Common Stock was $75.79 per share as of December 29, 2023. These payouts are calculated for SEC disclosure purposes and are not necessarily indicative of the actual amounts the named executive would receive. In addition to the amounts reported below, our Israel-based NEOs are entitled to continued health, social and other benefits provided by law in connection with a termination of employment by the Company without cause.
| Name | | Death or
Disability(1)
($) | | Termination of
Employment by
the Company
without Cause(2)
($) | | Voluntary
Termination of
Employment by
Employee(3)
($) | | Termination
in Connection
with a Change
in Control(4)
($) |
| Doron Blachar | | | | | | | | |
| Accelerated vesting of equity awards | | 2,052,317 | | — | | — | | 2,224,666 |
| Cash Payments | | 594,000 | | 858,150 | | 691,895 | | 2,641,500 |
| Assaf Ginzburg | | | | | | | | |
| Accelerated vesting of equity awards | | 1,091,000 | | — | | — | | 1,156,212 |
| Cash Payments | | 274,000 | | 405,313 | | 349,524 | | 1,275,910 |
| Shimon Hatzir | | | | | | | | |
| Accelerated vesting of equity awards | | 901,240 | | — | | — | | 948,640 |
| Cash Payments | | 223,000 | | 399,729 | | 291,397 | | 1,087,687 |
| Ofer Ben Yosef | | | | | | | | |
| Accelerated vesting of equity awards | | 669,986 | | — | | — | | 723,703 |
| Cash Payments | | 165,000 | | 271,037 | | 227,249 | | 889,667 |
| Jessica Woelfel | | | | | | | | |
| Accelerated vesting of equity awards | | 522,876 | | — | | — | | 556,481 |
| Cash Payments | | 229,804 | | 331,077 | | — | | 1,093,967 |
| (1) | Upon the death of a NEO, such NEO will be entitled to accelerated vesting of certain equity awards, which include the value of all RSUs and PSUs outstanding at December 31, 2023, with target performance assumed for PSUs, in accordance with the terms of the award agreements. The cash payments amounts include the Fiscal 2023 annual bonuses for each of the NEOs made pursuant to the Company’s Management Plan, which provides that if a participant’s employment terminates as a result of death or disability, the participant’s beneficiary will be entitled to receive a pro rata portion of any award he or she would have been entitled to upon the determination of the level of achievement of the performance measures after the approval of the Company’s annual financial statements and for Ms. Woelfel, the estimated value of four months of COBRA reimbursements. |
| (2) | The cash payments include (i) continued monthly salary for each of the NEOs during the notice provision (in the case of Ms. Woelfel, her entitlement to salary continuation) included in their employment agreements in the event of a termination of employment on December 31, 2023, which is six months for Mr. Blachar and Mr. Hatzir (inclusive of his four month adjustment period) and four months for each of Mr. Ginzburg, Mr. Ben Yosef and Ms. Woelfel, (ii) the Fiscal 2023 annual bonuses for each of the NEOs made pursuant to the Company’s Management Plan, which provides that if a participant is terminated without cause, he or she will be entitled to receive a pro rata portion of any award he or she would have been entitled to upon the determination of the level of achievement of the performance measures after the approval of the Company’s annual financial statements. |
| (3) | We have entered into “Section 14 arrangements,” contained in the employment agreements of each of our NEOs based in Israel, pursuant to which we make monthly contributions to fund any severance payments that are required under Israeli law. Without these arrangements, the NEOs would be entitled to receive severance payments only in the event their employment was terminated by the Company. The effect of the Section 14 arrangements is that the NEOs based in Israel will receive the severance payments in the event they terminate their employment with the Company for any reason. The cash payments amounts included in this column represent the severance payments to the NEOs pursuant to the Section 14 arrangements and the Fiscal 2023 annual bonuses for each of the NEOs made pursuant to the Company’s Management Plan, which provides that if a participant’s employment is terminated for any reason, other than by the Company without cause, he or she will be entitled to receive a pro rata portion of any award he or she would have been entitled to upon the determination of the level of achievement of the performance measures after the approval of the Company’s annual financial statements. |
| (4) | Reflects the benefits that would have been to our NEOs pursuant to the Severance Plan described above in the event of a termination on December 31, 2023 as follows: (i) cash severance payable in a lump sum equal to 200% (for Mr. Blachar) and 150% (for the other NEOs) of the sum of the NEO’s base salary and target bonus; (ii) target bonus for fiscal 2023; (iii) for Ms. Woelfel, the estimated value of 18 months of COBRA reimbursements; and (iv) the value of all unvested equity awards outstanding as of December 31, 2023, with any performance-criteria calculated at target level. |
ORMAT TECHNOLOGIES, INC. | 2024 PROXY STATEMENT 53
| Name | Termination without Cause ($) | Change in Control ($) |
| Isaac Angel | 447,861 | 895,722 |
| Doron Blachar | 307,008 | 307,008 |
| Zvi Krieger | 536,541 | 536,541 |
| Shlomi Argas | 668,257 | 668,257 |
| Bob Sullivan | None | None |
PAY RATIO
CEO PAY RATIO
Our CEO, Mr. Isaac Angel,Doron Blachar, had fiscal year 2017Fiscal 2023 total compensation of $1,356,000,$3,058,576, as reflected in the Summary Compensation Table included in this proxy statement.above. We estimate that the median of the annual total compensation of all Ormat employees as of February 13, 2018,for the year ended December 31, 2023, except our CEO, was approximately $77,700.$106,045. As a result, Mr. Isaac Angel’sBlachar’s annual total compensation was approximately 17.629 times that of the median annual total compensation of all employees.
IDENTIFYING THE MEDIAN EMPLOYEE
We identified the median employee using compensation information derived from our payroll records. Our methodology in calculating the annual total compensation for employees other(other than our CEOCEO) included salary, social benefits, health insurance and cash bonus. Accordingly, the calculation included the following compensation components in the following jurisdictions: (a) in the U.S.,United States, annual total compensation included salary, health insurance (employer’s portion) and 401K401(k) plan (employer’s portion); (b) in Israel, annual total compensation included salary, bonus (including discretionary bonus) and social benefits; and (c) in jurisdictions where we have employees other than in the U.S.United States and Israel, annual total compensation included salary, bonus and social benefits. Equity awards that were notexercised or that vested during 2023 were included in the calculation of annual total compensation, because equity awards were only awarded to certain ofas shown in our management team members in 2017payroll and thus would not have affected the median. Our CEO did not receive any equity awards in 2017.
human resource records for 2023.In identifying the median employee and determining total compensation or any elements of total compensation, we did not make any cost-of-living adjustments or any other material assumptions, adjustments or estimates, except as otherwise disclosed herein.
ORMAT TECHNOLOGIES, INC. | 2024 PROXY STATEMENT 54
The following table sets forth the total compensation paid to each member of our Board during the year ended December 31, 2017:
| Name | Fee Earned or Paid in Cash ($) | Options Awards ($)(1) | Total ($) |
| Ravit Barniv | $73,611 | $119,939(2) | $193,550 |
| Robert F. Clarke | $66,111 | $119,939(3) | $186,050 |
| Dan Falk | $99,893 | $119,939(4) | $219,832 |
| Todd C. Freeland | $39,864 | $197,978(5) | $237,842 |
| David Granot | $93,611 | $119,939(6) | $213,550 |
| Stan H. Koyanagi | $0(12) | $138,000(7) | $138,000 |
| Yuichi Nishigori | $0(13) | $138,000(8) | $138,000 |
| Stanley B. Stern | $78,111 | $119,939(9) | $198,050 |
| Byron Wong | $31,864 | $138,000(10) | $169,864 |
Gillon Beck(11) | $36,747 | 0 | $36,747 |
Ami Boehm(11) | $36,747 | 0 | $36,747 |
Robert Joyal(11) | $36,747 | 0 | $36,747 |
PAY VERSUS PERFORMANCE
Pursuant to Item 402(v) of Regulation S-K, we are providing the following information about the relationship between (i) executive “compensation actually paid” to the Company’s chief executive officer and other named executive officers and (ii) certain aspects of the financial performance of the Company.
The Compensation Committee does not in practice use “compensation actually paid” as the basis for making compensation decisions. For further information concerning our compensation philosophy and how we align executive compensation with our performance, see “Compensation Discussion and Analysis.” The below disclosure is provided only to comply with applicable SEC rules.
PAY VERSUS PERFORMANCE TABLE
| | | | | | | | | | | | | | | Value of Initial
Fixed $100
Investment Based
On(4) | | | | |
| Year(1) | | Summary
Compensation
Table Total for
PEO 1(2)
($) | | Summary
Compensation
Table Total for
PEO 2(2)
($) | | Compensation
Actually Paid
to PEO 1(3)
($) | | Compensation
Actually Paid
to PEO 2(3)
($) | | Average
Summary
Compensation
Table Total for
Other NEOs(2)
($) | | Average
Compensation
Actually Paid
to Other
NEOs(3)
($) | | Total
Share-
holder
Return
($) | | Peer Group
Total
Shareholder
Return(5)
($) | | Net
Income
($000) | | Adjusted
EBITDA(6)
($000) |
| (a) | | (b) | | | | (c) | | | | (d) | | (e) | | (f) | | (g) | | (h) | | (i) |
| 2023 | | — | | 3,058,576 | | — | | 2,152,769 | | 1,262,912 | | 932,504 | | 101.7 | | 87.1 | | 133,137 | | 481,741 |
| 2022 | | — | | 2,057,159 | | — | | 2,830,554 | | 1,134,725 | | 1,453,939 | | 116.05 | | 111.98 | | 77,795 | | 435,463 |
| 2021 | | — | | 1,074,687 | | — | | 197,417 | | 563,282 | | 194,105 | | 106.41 | | 208.65 | | 76,077 | | 401,444 |
| 2020 | | 1,842,741 | | 2,405,763 | | 3,388,339 | | 3,986,154 | | 1,294,262 | | 1,725,013 | | 121.15 | | 302.04 | | 101,806 | | 420,159 |
| (1) | RepresentsIsaac Angel served as our Chief Executive Officer, also referred to as our Principal Executive Officer (“PEO”), until July 1, 2020, when he was succeeded by Doron Blachar. Mr. Blachar has served as the grant date fair valuePEO since July 1, 2020 and for the entirety of 2023, 2022, 2021 and 2020. Mr. Angel is labeled as “PEO 1” and Mr. Blachar as “PEO 2.” Our other NEOs for the applicable fiscal years are labeled as “Other NEOs” and are as follows: |
| • | 2023: Assaf Ginzburg, Shimon Hatzir, Ofer Ben Yosef and Jessica Woelfel. |
| • | 2022: Assaf Ginzburg, Shlomi Argas, Shimon Hatzir and Ofer Ben Yosef. |
| • | 2021: Assaf Ginzburg, Shlomi Argas, Shimon Hatzir and Ofer Ben Yosef. |
| • | 2020: Assaf Ginzburg, Shlomi Argas, Zvi Krieger and Hezi Kattan. |
| (2) | Amounts reported in accordance with accounting guidance for stock based compensation. For a discussion ofthese columns represent (i) the assumptions usedtotal compensation reported in reaching this valuation, see footnote 3 to the Summary Compensation Table above. |
| (2) | Includes (i) 1,361 SARs with an exercise price(“SCT”) for the applicable year in the case of $63.35 per share of Common Stock underlying such SARs granted to Ms. Barniv on November 7, 2017Mr. Angel (PEO 1 for 2020) and (iii) 1,526 RSUs granted to Ms. Barniv on November 7, 2017. |
| (3) | Includes (i) 1,361 SARs with an exercise price of $63.35 per share of Common Stock underlying such SARs granted to Mr. Clarke on November 7, 2017Blachar (PEO 2 for 2020, and otherwise the sole PEO for subsequent years), and (ii) 1,526 RSUs grantedthe average of the total compensation reported in the SCT for the applicable year for our Other NEOs. |
| (3) | Amounts reported in these columns represent the amount of “Compensation Actually Paid” (“CAP”) as computed in accordance with Item 402(v) of Regulation S-K. A reconciliation of the adjustments for PEOs and for the average of the Other NEOs is set forth in the following table. The CAP amounts do not reflect the actual amount of compensation earned by or paid to Mr. Clarkethe PEOs or Other NEOs in the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to each applicable executive officer’s total compensation reported in the SCT for each year to determine the CAP: |
| (4) | TSR is cumulative for the measurement periods beginning on November 7, 2017. |
| (4) | Includes (i) 1,361 SARsDecember 31, 2019 and ending on December 31 of each of 2023, 2022, 2021 and 2020, respectively, calculated in accordance with an exercise priceItem 201(e) of $63.35 per shareRegulation S-K. The TSR assumes $100 was invested at the close of Common Stock underlying such SARs granted to Mr. Falkmarket on November 7, 2017 and (ii) 1,526 RSUs granted to Mr. Falk on November 7, 2017. |
| (5) | Includes (i) 7,500 options to purchaseDecember 31, 2019 in our Common Stock, with an exercise priceand assumes the reinvestment of $57.97 per share grantedany dividends. |
| (5) | “Peer Group” represents the PBW - Invesco WilderHill Clean Energy ETF. The Peer Group TSR assumes $100 was invested at the close of market on December 31, 2019 in the stocks of the companies included in the PBW - Invesco WilderHill Clean Energy ETF, and assumes the reinvestment of any dividends. |
| (6) | Adjusted EBITDA is defined as net income before interest, taxes, depreciation and amortization and accretion, adjusted for the following: (i) mark-to-market gains or losses from accounting for derivatives; (ii) stock-based compensation; (iii) merger and acquisition transaction costs; (iv) gain or loss from extinguishment of liabilities; (v) cost related to a settlement agreement; (vi) non-cash impairment charges; (vii) write-off of unsuccessful exploration activities; and (vii) other unusual or non-recurring items. |
| (1) | Isaac Angel served as our Chief Executive Officer, also referred to as our Principal Executive Officer (“PEO”), until July 1, 2020, when he was succeeded by Doron Blachar. Mr. Freeland on August 4, 2017,Blachar has served as the PEO since July 1, 2020 and for the entirety of 2023, 2022, 2021 and 2020. Mr. Angel is labeled as “PEO 1” and Mr. Blachar as “PEO 2.” Our other NEOs for the applicable fiscal years are labeled as “Other NEOs” and are as follows: |
| • | 2023: Assaf Ginzburg, Shimon Hatzir, Ofer Ben Yosef and Jessica Woelfel. |
| • | 2022: Assaf Ginzburg, Shlomi Argas, Shimon Hatzir and Ofer Ben Yosef. |
| • | 2021: Assaf Ginzburg, Shlomi Argas, Shimon Hatzir and Ofer Ben Yosef. |
| • | 2020: Assaf Ginzburg, Shlomi Argas, Zvi Krieger and Hezi Kattan. |
| (2) | Amounts reported in these columns represent (i) the total compensation reported in the Summary Compensation Table (“SCT”) for the applicable year in the case of Mr. Angel (PEO 1 for 2020) and Mr. Blachar (PEO 2 for 2020, and otherwise the sole PEO for subsequent years), and (ii) 681 SARs with an exercise pricethe average of $63.35 per share of Common Stock underlying such SARs granted to Mr. Freeland on November 7, 2017 and (iii) 763 RSUs granted to Mr. Freeland on November 7, 2017.the total compensation reported in the SCT for the applicable year for our Other NEOs. |
ORMAT TECHNOLOGIES, INC. | 2024 PROXY STATEMENT 55
| (3) | Includes (i) 1,361 SARsAmounts reported in these columns represent the amount of “Compensation Actually Paid” (“CAP”) as computed in accordance with an exercise priceItem 402(v) of $63.35 per shareRegulation S-K. A reconciliation of Common Stock underlying such SARs grantedthe adjustments for PEOs and for the average of the Other NEOs is set forth in the following table. The CAP amounts do not reflect the actual amount of compensation earned by or paid to Mr. Granot on November 7, 2017 and (ii) 1,526 RSUs grantedthe PEOs or Other NEOs in the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to Mr. Granot on November 7, 2017.each applicable executive officer’s total compensation reported in the SCT for each year to determine the CAP: |
| | | 2023 | | | 2022 | | | 2021 | | 2020 |
| | | PEO D.
Blachar | | | Average
Other
NEOs | | | PEO D.
Blachar | | | Average
Other
NEOs | | | PEO D.
Blachar | | | Average
Other
NEOs | | | PEO 1
I. Angel | | | PEO 2 D.
Blachar | | | Average
Other
NEOs | |
| Summary Compensation Table Total | | $ | 3,058,576 | | | $ | 1,262,912 | | | $ | 2,057,159 | | | $ | 1,134,725 | | | $ | 1,074,687 | | | $ | 563,282 | | | $ | 1,842,741 | | | $ | 2,405,763 | | | $ | 1,294,262 | |
| Less Fair Value of Stock Awards and Option Awards Reported in SCT for the Covered Year | | | (1,800,000 | ) | | | (625,000 | ) | | | (900,000 | ) | | | (468,750 | ) | | | — | | | | — | | | | — | | | | (1,500,000 | ) | | | (787,500 | ) |
| Plus Year End Fair Value of Equity Awards Granted During the Covered Year that Remain Outstanding and Unvested as of Last Day of the Covered Year | | | 1,542,619 | | | | 535,630 | | | | 1,286,723 | | | | 661,194 | | | | — | | | | — | | | | — | | | | 2,808,248 | | | | 1,149,132 | |
| Plus Year over Year Change in Fair Value as of the Last Day of the Covered Year of Outstanding and Unvested Equity Awards Granted in Prior Years | | | (470,447 | ) | | | (197,457 | ) | | | 319,048 | | | | 136,611 | | | | (658,791 | ) | | | (310,336 | ) | | | 1,379,542 | | | | 281,057 | | | | 198,868 | |
| Plus Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Same Covered Year | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| Plus Year over Year Change in Fair Value as of the Vesting Date of Equity Awards Granted in Prior Years that Vested During the Covered Year | | | (177,979 | ) | | | (43,582 | ) | | | 67,624 | | | | (9,840 | ) | | | (218,479 | ) | | | (58,841 | ) | | | 166,056 | | | | (8,914 | ) | | | (129,749 | ) |
| Less Fair Value at the End of the Prior Year of Equity Awards that Were Forfeited Due to Failure to Meet Vesting Conditions in the Covered Year | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| Plus Value of Dividends or other Earnings Paid on Stock or Option Awards Not Otherwise Reflected in Fair Value or Total Compensation for the Covered Year | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| Compensation Actually Paid | | | 2,152,769 | | | | 932,504 | | | | 2,830,554 | | | | 1,453,939 | | | | 197,417 | | | | 194,105 | | | | 3,388,339 | | | | 3,986,154 | | | | 1,725,013 | |
In the table above, the unvested equity values are computed in accordance with the methodology used for financial reporting purposes, and for unvested awards subject to performance-based vesting conditions, based on the probable outcome of such performance-based vesting conditions as of the last day of the covered year.
| (4) | (7) | Includes 7,500 options to purchaseTSR is cumulative for the measurement periods beginning on December 31, 2019 and ending on December 31 of each of 2023, 2022, 2021 and 2020, respectively, calculated in accordance with Item 201(e) of Regulation S-K. The TSR assumes $100 was invested at the close of market on December 31, 2019 in our Common Stock, with an exercise priceand assumes the reinvestment of $57.97 per share grantedany dividends. |
| (5) | “Peer Group” represents the PBW - Invesco WilderHill Clean Energy ETF. The Peer Group TSR assumes $100 was invested at the close of market on December 31, 2019 in the stocks of the companies included in the PBW - Invesco WilderHill Clean Energy ETF, and assumes the reinvestment of any dividends. |
| (6) | Adjusted EBITDA is defined as net income before interest, taxes, depreciation and amortization and accretion, adjusted for the following: (i) mark-to-market gains or losses from accounting for derivatives; (ii) stock-based compensation; (iii) merger and acquisition transaction costs; (iv) gain or loss from extinguishment of liabilities; (v) cost related to Mr. Koyanagi on August 4, 2017.a settlement agreement; (vi) non-cash impairment charges; (vii) write-off of unsuccessful exploration activities; and (vii) other unusual or non-recurring items. |
ORMAT TECHNOLOGIES, INC. | 2024 PROXY STATEMENT 56
| Back to Contents | | (8)Includes 7,500 options to purchase our Common Stock with an exercise price of $57.97 per share granted to Mr. Nishigori on August 4, 2017. |
| (9) | Includes (i) 1,361 SARs with an exercise price of $63.35 per share of Common Stock underlying such SARs granted to Mr. Stern on November 7, 2017 and (ii) 1,526 RSUs granted to Mr. Stern on November 7, 2017. |
| (10) | Includes 7,500 options to purchase our Common Stock with an exercise price of $57.97 per share granted to Mr. Wong on August 4, 2017. |
| (11) | Resigned from the Board on July 26, 2017 in connection with the ORIX Transaction. |
| (12) | Mr. Koyanagi has elected to forego the cash retainer to which members of our Board are entitled for 2017. |
| (13) | Mr. Nishigori has elected to forego the cash retainer to which members of our Board are entitled for 2017. |
Cash Compensation
PriorTABULAR LIST OF MOST IMPORTANT FINANCIAL PERFORMANCE MEASURES
The following is a list of performance measures, which in our assessment represent the most important performance measures used by the Company to November 7, 2017, cashlink NEO compensation to Company performance. Each performance metric below is used for purposes of determining payouts under either our Management Plan or vesting of our non-employee directors was as follows:
| · | Base annual retainer of $40,000 as fees related to their service on our Board. |
| · | Board meeting fees of $2,500 per day for each in-person meeting attended; $500 per day for each telephonic meeting attended; and $1,000 per day for telephonic participation in an in-person meeting. |
| · | Committee meeting fees of $1,500 per day for each in-person meeting attended and $500 per day for each telephonic meeting attended. |
| · | Any non-employee director who also serves as Chair of the Audit Committee receives an annual retainer of $7,500. Chairs of our other Committees do not receive an annual retainer. |
| · | We promptly reimburse all directors for transportation and lodging expenses actually incurred to attend meetings of our Board or Committees. |
On November 7, 2017, following reviewPSUs. Please see “Compensation Discussion and Analysis” for a further description of
peerthese performance metrics (including, in the case of Adjusted EBITDA, how it is calculated) and
other benchmarking data,how they are used in our executive compensation program. As noted above, we do not in practice use any performance measures to link “compensation actually paid” (as calculated herein) to Company performance. However, we are providing this list in accordance with Item 402(v) of Regulation S-K to provide information on performance measures used by the Compensation Committee
to determine NEO compensation, as more fully described in “Compensation Discussion and
Analysis.”| Most Important Financial Performance Measures |
| Adjusted EBITDA |
| Revenue |
| Relative TSR |
| Megawatt Growth |
RELATIONSHIP BETWEEN CAP AND CERTAIN FINANCIAL MEASURES
Relationship between CAP and GAAP Net Income
As required by SEC rules, the graph below reflects the relationship between (i) the CAP of the PEO and average CAP of the Other NEOs and (ii) our Board approved certain changes to our directors' annual cash compensation. From November 7, 2017, cash compensationGAAP Net Income for each of our non-employee directors is as follows:
Relationship between CAP and GAAP Net Income
ORMAT TECHNOLOGIES, INC. | 2024 PROXY STATEMENT 57
Relationship Between CAP and Adjusted EBITDA (our Company-Selected Measure)
As required by SEC rules, the graph below reflects the relationship between (i) the CAP of the PEO and average CAP of the Other NEOs and (ii) our Adjusted EBITDA for each of the fiscal years covered by the Pay Versus Performance Table.
Relationship between CAP and Adjusted EBITDA
Relationship Between CAP and TSR
As required by SEC rules, the graph below reflects the relationship between (i) the CAP of the PEO and average CAP of the other NEOs, (ii) our TSR, and (iii) our Peer Group TSR for each of the fiscal years covered by the Pay Versus Performance Table.
Relationship between CAP and TSR
ORMAT TECHNOLOGIES, INC. | 2024 PROXY STATEMENT 58
Base annual retainer of $60,000 as fees related to their service on our Board. |
| Back to Contents | | ·Per Board and Committee meeting fees consistent with prior practice (as described above), subject to an aggregate $35,000 cap, regardless of the number of meetings such director attends. |
| · | The Chairs of the Audit Committee, Compensation Committee and Investment Committee receive supplemental annual cash retainers of $15,000, $10,000 and $10,000, respectively, none of which are subject to the $35,000 cap. |
| · | The non-employee Chairman of the Board receives a supplemental annual retainer with an aggregate value of $100,000, consisting of a $40,000 cash retainer and equity compensation with a value of $60,000, as further described below. |
| · | We promptly reimburse all directors for transportation and lodging expenses actually incurred to attend meetings of our Board or Committees. |
Equity Compensation
Each newly appointed non-employee director receives an initial grant of options to purchase 7,500 shares of our Common Stock at an exercise price equal to the NYSE closing price on the datePROPOSAL 3
RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Ratification of the grant. Effective November 7, 2017, following reviewappointment of peer and other benchmarking data,PwC as our independent registered public accounting firm requires the Compensation Committee and our Board approved certain changes to our directors' annual equity compensation. The Compensation Committee and our Board, which previously approved the grant by the Company of solely stock options to our directors, replaced such stock options with RSUs and SARs so that from November 7, 2017, the Company will grant to its non-employee directors equity compensation with a target value mix of 80% RSUs and 20% SARs.
On November 7, 2017, five of our nine directors (excluding Mr. Freeland, Mr. Koyanagi, Mr. Nishigori and Mr. Wong) were granted annual equity incentive compensation with an aggregate value of $120,000 and a target value mix of 80% RSUs and 20% SARs, with the actual number of RSUs and SARs based on the closing price of our Common Stock on the next business day following the date of grant. Mr. Freeland, the Chairman of our Board, was granted the $60,000 equity component of his supplemental annual retainer described above with a target value mix of 80% RSUs and 20% SARs, with the actual number of RSUs and SARs based on the closing price of our Common Stock on the next business day following the date of grant. The Compensation Committee and our Board determined that participation of Mr. Freeland, Mr. Koyanagi, Mr. Nishigori and Mr. Wong, each of whom were granted options to purchase 7,500 shares of our Common Stock in connection with their appointment to our Board in July 2017, in the equity componentaffirmative vote of the director compensation package approved on November 7, 2017 will be deferred until November 2018 to avoid such directors receiving multiple equity grants during their first twelve monthsholders of service.
The Company customarily grants the annual award of equity compensation to its non-employee directors in November of each year. The Company does not have stock ownership guidelines for its directors.
TRANSACTIONS WITH RELATED PERSONSOn May 4, 2017, the Company entered into a commercial cooperation agreement (the "CCA"), a registration rights agreement (the "RRA") and the Governance Agreement (collectively, the "Transaction Agreements") with ORIX in connection with the ORIX Transaction. The Transaction Agreements became effective upon the closing of the ORIX Transaction on July 26, 2017.
Commercial Cooperation Agreement
Pursuant to the Commercial Cooperation Agreement, the Company and its affiliates have an exclusive right of first refusal to own, invest in, develop and operate new geothermal business opportunities outside the State of Japan that are sourced by or presented to ORIX or its affiliates after the effective date of the Commercial Cooperation Agreement, subject to certain limitations. The Company and its affiliates also have the exclusive right to provide certain geological, engineering, procurement, construction, operational and/or management services, and the option to acquire up to 49% ownership of all geothermal projects within the State of Japan that (i) are new geothermal business opportunities sourced by or presented to ORIX or its affiliates after the effective date of the Commercial Cooperation Agreement, (ii) have an expected generating capacity of greater than 15 MW and (iii) that are 100% owned by ORIX or its affiliates, or with respect to which ORIX or its affiliates have the ability to control all relevant decisions without being required to obtain any third party consent. Subject to certain limitations, ORIX and its affiliates must use their commercially reasonable efforts to engage the Company or its affiliates to provide certain geological, engineering, procurement, construction, operational and/or management services to all geothermal projects within the State of Japan that meet the foregoing criteria, but that have an expected generating capacity of 15 MW or less. Furthermore, ORIX must use commercially reasonable efforts to assist the Company and its affiliates in obtaining project financing for geothermal projects from certain providers of debt financing with which ORIX or its affiliates have a commercial relationship at the applicable time.
The Commercial Cooperation Agreement will be suspended during any period in which ORIX and its affiliates cease to own, collectively, at least 13%majority of the voting power of
all of our
outstanding Common Stockshares present in person or
other securitiesrepresented by proxy and entitled to vote
generallyon the matter. Abstentions will count as votes “against” and “broker non-votes” will have no effect on the outcome of this proposal. | OUR BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF KESSELMAN & KESSELMAN, A MEMBER FIRM OF PRICEWATERHOUSECOOPERS INTERNATIONAL LIMITED, AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM. |
APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee is responsible for the election of directors to the Board. During any such period, neither the Company nor ORIX will have any obligations under the Commercial Cooperation Agreement nor will they be liable for any claims under the Commercial Cooperation Agreement that arise during such period. The Commercial Cooperation Agreement may not be terminated except (i) by mutual agreementappointment, compensation, retention and oversight of the Company and ORIX, (ii) onindependent registered public accounting firm retained to audit the effective dateCompany’s financial statements. The Audit Committee has selected Kesselman & Kesselman, a member firm of termination ofPricewaterhouseCoopers International Limited (“PwC”), to serve as our independent registered public accounting firm for 2023.
Stockholder approval is not required to appoint PwC as the Governance Agreement (other than a termination resulting from the breach thereof by ORIX or its affiliates), (iii) in the event of an uncured event of default or (iv) upon certain bankruptcy or insolvency events with respect to any of the parties thereto.
Governance Agreement
The Governance Agreement sets forth the rights and obligations of the Company and ORIX with respect to certain corporate governance matters of the Company, including, but not limited to,independent registered public accounting firm for 2023. Our Board believes, however, that submitting the appointment of directorsPwC to our Board, the composition of Board Committees and voting with respect to matters submitted to a vote of the stockholders for ratification is a matter of good corporate governance. Even if the Company. The Governance Agreement also sets forth limitations onappointment is ratified, our Audit Committee, in its discretion, may direct the abilityappointment of ORIX and its affiliates to acquire our securities in excess of certain thresholds.
Pursuant to the Governance Agreement, the Company (i) appointed the three directors designated by ORIX to our Board to fill the vacancies created by the resignation of three of the Company’s former directors from the Board upon the closing of the ORIX Transaction and (ii) increased the size of the Board to nine directors and appointed the Independent Director to our Board. See "CORPORATE GOVERNANCE—Overview" above for additional information concerning ORIX's and the Company's rights to designate director nominees for election to our Board and appointment to Board Committees pursuant to the Governance Agreement.
Under the Governance Agreement. the Company and our Board must cause each director nominee designated by ORIX and the Independent Director to be included in management's slate of nominees for election as a director at each annual or special meeting of stockholders of the Company at which directors are to be elected. The Company must also use reasonable best efforts to cause the election of each such director nominee and Independent Director and, in the event any such director nominee or Independent Director fails to be elected or, following election, ceases to be a director for any reason, ORIX has the right to designate replacement director nominees or fill the vacancy on our Board, as applicable, subject to approval by the Company. The Governance Agreement also provides that ORIX will vote or cause to be voted all securities beneficially owned by ORIX and its affiliates in favor of the election of all director nominees nominated by the Nominating and Corporate Governance Committee, and ORIX will not take, alone or in concert with others, any action to remove or oppose any director or director nominee nominated by the Nominating and Corporate Governance Committee.
The Governance Agreement also restricts ORIX and its affiliates from taking certain actions during the period that began upon the closing of the ORIX Transaction on July 26, 2017 and ends on the later of the third anniversary of such closing and the date on which ORIX is no longer entitled to nominate any directors to our Board (the "Standstill Period"), including:
| · | beneficially owning, individually or as part of a group, any class or series of voting securities of the Company in excess of 30% of the aggregate amount of the then-outstanding voting securities of such class or series; |
| · | engaging in any "solicitation" of "proxies" (as those terms are defined under Regulation 14A under the Exchange Act) relating to the election of directors with respect to the Company, becoming a “participant” (as such term is defined under Regulation 14A under the Exchange Act) in any solicitation seeking to elect directors not nominated by our Board or otherwise seeking to influence any person or group with respect to the voting of any voting securities of the Company other than with respect to ORIX’s director nominees; |
| · | voting in favor of or otherwise supporting any transaction that would result in a Change of Control (as defined in the Governance Agreement) of the Company, if the transaction is opposed by our Board; |
| · | making any public request or proposal seeking to have the Company waive or make amendments to our organizational documents in a manner that would either impede or facilitate a Change of Control of the Company; and |
| · | making any public request or proposal that the Company effect any material change to its dividend policy. |
Such restrictions will be suspended upon certain events, including, but not limited to, the Company’s entering into a definitive agreement providing for a transaction that would result in a Change of Control.
During the Standstill Period, ORIX is also required to vote or cause to be voted, on any action to be taken by the Company’s stockholders, in proportion to votes cast by all the stockholders of the Company (other than ORIX and its affiliates), all voting securities of the Company representing in excess of 25% of the outstanding voting power of the Company.
The Governance Agreement grants ORIX preemptive rights in the event of certain issuances of securities by the Company, as well as information rights with respect to the Company’s business, operations, finances, personnel and prospects, upon ORIX’s reasonable request, but in no event more than once during any twelve-month period.
The Governance Agreement will terminate or may be terminated as follows:
| · | at the time ORIX and its affiliates collectively hold less than 5% of the voting power of all the outstanding voting securities of the Company; |
| · | upon the mutual written agreement of the Company and ORIX; |
| · | by ORIX, upon a material breach by the Company of the Governance Agreement that has not been cured within ten business days after written notice thereof has been received by the Company; or |
| · | by the Company, upon a material breach by ORIX of the Governance Agreement that has not been cured within ten business days after written notice thereof has been received by ORIX. |
Registration Rights Agreement
The Registration Rights Agreement provides, among other things, that ORIX may,different independent registered public accounting firm at any time request thatduring the Company fileyear if it determines such a registration statement with the SECchange would be in order to permit a public offering and sale of Company securities held by ORIX. ORIX may exercise such demand registration rights twice, provided that ORIX will be entitled to exercise such demand registration rights a third time in the event the Company includes shares for its own account or other selling stockholders in an offering pursuant to either of the first two demand registrations. ORIX may not exercise such demand registration rights less than 120 days following the effective date of a registration statement filed by the Company in respect of such demand registration rights or any other registration of securities held by ORIX. The Registration Rights Agreement also provides that if at any time the Company proposes to file a registration statement with the SEC in connection with any public offering of its common stock, ORIX will be permitted to require the Company to include the securities held by ORIX in such registration. At least 5 business days before the Company files any registration statement registering securities held by ORIX or any related prospectus, or any amendment or supplement thereto, the Company must furnish to ORIX for review copies of all documents proposed to be filed and include in such documents reasonable changes as ORIX and the Company may agree should be included.
Lockup Agreement & Undertaking
In connection with the ORIX Transaction, the Compensation Committee approved the acceleration of the remaining vesting period applicable to unvested stock options to purchase 350,000 shares of our Common Stock and 42,500 shares of our Common Stock previously granted to Mr. Angel, our CEO, and Mr. Blachar, our CFO, respectively, under the 2012 ICP (the "Accelerated Stock Options"). Such approval was subject to the execution of a lockup agreement (the "Lockup Agreement") and undertaking (the "Undertaking") by Mr. Angel and Mr. Blachar, respectively, which were executed on May 4, 2017.
The Lockup Agreement provides that Mr. Angel will not sell, transfer or otherwise dispose of any shares of our Common Stock acquired through the exercise of the portion of the Accelerated Stock Options granted to him on June 14, 2016 for a period of one year following the date of the Lockup Agreement. For a period of 180 days following the foregoing initial lockup period, Mr. Angel will not sell, transfer or otherwise dispose of more than 50,000 shares of our Common Stock acquired through the exercise of the portion of the Accelerated Stock Options granted to him on June 14, 2016. If at the end of either lockup period, Mr. Angel is no longer employed by the Company other than by reason of a termination without "Cause" (as defined in Mr. Angel's employment agreement) or a termination by Mr. Angel for "Good Reason" (as defined in Mr. Angel's employment agreement), Mr. Angel will forfeit all Accelerated Stock Options.
The Undertaking provides that Mr. Blachar will not, for the period beginning on the date of the Undertaking and ending on June 30, 2018, sell, transfer or otherwise dispose of any shares of our Common Stock acquired through the exercise of the portion of the Accelerated Stock Options granted to him on June 14, 2016, as long as he is employed by the Company.
Neither the Lockup Agreement nor the Undertaking will apply to any other stock options or incentive compensation which may be granted to Mr. Angel or Mr. Blachar after the date of the Lockup Agreement and the Undertaking.
REVIEW, APPROVAL OR RATIFICATION OF TRANSACTIONS WITH RELATED PERSONSThe Company recognizes that transactions between the Company and any of our executive officers, directors or beneficial holders of more than 5% of our capital stock or their respective immediate family members, may present potential or actual conflicts of interest or may create the appearance that Company decisions are based on considerations other than the best interests of the Company and
our stockholders.As part of the evaluation of its stockholders. Therefore, asindependent registered public accounting firm, the Audit Committee periodically considers whether there should be a general matter, andregular rotation of the independent registered public accounting firm. In addition, in conformanceconjunction with the Company’s Code of Business Conduct and Ethics and financial reporting policies and procedures, transactions with related persons are consummated only if the requisite approvals are obtained and only if the termsmandated rotation of the transactionindependent registered public accounting firm’s lead audit partner, the Audit Committee and the Audit Committee Chair are determineddirectly involved in the selection of PwC’s lead audit partner. PwC has served as the Company’s independent registered public accounting firm since 2018. The Audit Committee and the Board of Directors believe that the continued retention of PwC to beserve as the Company’s independent registered public accounting firm is in the best interests of the Company and its stockholders.
Pursuant to our Fourth Amended and Restated By-Laws, the Audit Committee shall review and approve related party transactions in excess of certain dollar thresholds set forth in SEC rules and regulations and the NYSE listing standards. To facilitate such review and approval, the Company has adoptedWe expect that a formal written policy which requires the executive officer or director initiating a related party transaction to prepare (i) a memorandum summarizing the terms and conditions of the proposed transaction, including pricing and market conditions, and (ii) a preliminary draft agreement, which memorandum and preliminary draft agreement are then provided to the Company’s Disclosure Committee for review. The Disclosure Committee, comprised of our CFO, Corporate Secretary, VP and Corporate Controller, and VP Corporate Finance and Investor Relations, reviews the business terms of the transaction, materiality, and applicable corporate laws and regulations, and determines whether the transaction is required to be reviewed and approved by the Audit Committee, our Board, and/or the stockholders. In accordance with the determination of the Disclosure Committee, the proposed transaction is then reviewed by the Audit Committee, our Board, and/or the stockholders, as applicable. A related party transaction will only be approved or ratified if the transaction is in the best interests of the Company and its stockholders, as the Audit Committee, our Board, and/or the stockholders determine in good faith. In addition, the fairness of each related party transaction is evaluated to ensure that the terms are consistent with arm's length transactions of a similar nature according to prevailing market terms and conditions, where such comparisons are available and appropriate.
The Board formed a special committee comprised solely of independent and disinterested directors that engaged its own independent financial and legal advisors, to evaluate and approve the transactions contemplated by the ORIX Transaction that involved the Company as described above.
EQUITY COMPENSATION PLAN INFORMATIONThe following table summarizes share and exercise price information about the Company’s equity compensation plans as of December 31, 2017.
| | | 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 | |
| Equity Compensation plans approved by security holders | | | 1,547,600 | * | | $ | 41.35 | | | | 873,437 | † |
| Equity Compensation plans not approved by security holders | | | — | | | | — | | | | — | |
| Total | | | 1,547,600 | * | | $ | 41.35 | | | | 873,437 | † |
___________
* | Stock options were issued pursuant to our 2004 Incentive Compensation Plan, as amended (the "2004 ICP"), and stock options, SARs and RSUs were issued pursuant to the 2012 ICP. Shares of our Common Stock to be issued upon exercise of these equity awards are registered on our Registration Statement on Form S-8 covering 1,250,000 shares filed with the SEC on November 9, 2005, our Registration Statement on Form S-8 covering 2,500,000 shares filed with the SEC on June 4, 2007 and our Registration Statement on Form S-8 covering 4,000,000 shares filed with the SEC on May 18, 2012.
|
† | No further awards will be granted under the 2004 ICP, though there are still unexercised options outstanding under the 2004 ICP. On May 18, 2012, the Company filed a post-effective Amendment No. 1 to Form S-8 whereby the Company removed from registration 51,149 unissued shares that had remained available for grant under the 2004 ICP. If the 2018 ICP is approved and adopted at the 2018 Annual Meeting of Stockholders, no further awards will be granted under the 2012 ICP.
|
PROPOSAL 2 — RATIFICATION OF APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMAppointment of Registered Public Accounting FirmYou are being asked to ratify the appointment by the Audit Committee of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the year ending December 31, 2018. PricewaterhouseCoopers LLP audited Ormat Technologies, Inc.’s annual financial statements for the year ended December 31, 2017. A representative of PricewaterhouseCoopers LLPfrom PwC will be present at the 2018 Annual Meeting, of Stockholders to respond to appropriate questions andwill have the opportunity to make a statement if the representativethey desire to do so desires.
will be available to respond to appropriate questions.AUDIT AND NON-AUDIT FEES
The following table setstables set forth the aggregate fees billed to us for the fiscal years ended December 31, 2017Fiscal 2023 and 2016Fiscal 2022 by PricewaterhouseCoopers LLP:
| | | 2017 | | | 2016 | |
Audit Fees(1) | | $ | 2,460,240 | | | $ | 2,421,793 | |
Audit-Related Fees(2) | | $ | 546,585 | | | $ | 450,645 | |
Tax Fees(3) | | $ | 948,306 | | | $ | 263,410 | |
All Other Fees(4) | | $ | 43,870 | | | $ | 3,870 | |
Total: | | $ | 3,999,001 | | | $ | 3,139,718 | |
PwC member firms:| | | 2023 ($) | | 2022 ($) |
| Audit Fees(1) | | 2,854,032 | | 2,866,809 |
| Audit-Related Fees(2) | | 140,000 | | 200,000 |
| Tax Fees(3) | | 2,322,909 | | 1,005,627 |
| All Other Fees(4) | | 25,000 | | 25,000 |
| Total: | | 5,341,941 | | 4,097,436 |
| (1) | (1) | Audit Fees represent the aggregate fees billed for professional services rendered for the auditsaudit of theour annual financial statements, and the Company’s internal control over financial reporting; for review of theour quarterly financial statements included in the Company’sour Form 10-Q filings; for the auditsfilings and reviews of certain of our subsidiaries; and for services that are normally provided by the independent registered public accounting firm in connection with our statutory and regulatory filings. |
| (2) | (2) | Audit-Related Fees represent the aggregate fees billed for assurance and related services reasonably related to the performance of the audit or review of our financial statements and that are not reported under paragraph (1) above,above. This includes fees for due diligence related to mergers and acquisitions and consulting on financial accounting/reporting standards. |
| (3) | (3) | Tax Fees represent the aggregate fees billed for internationalprofessional services rendered for tax compliance, tax advice, and tax planning services.planning. |
| (4) | (4) | All Other Fees represent annual software license fees. |
ORMAT TECHNOLOGIES, INC. | 2024 PROXY STATEMENT 59
AUDIT COMMITTEE PRE-APPROVAL PROCEDURES FOR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
In accordance with our Audit Committee Pre-Approval Procedurespre-approval policy, all audit and non-audit services performed for Independent Registered Public Accounting Firm
Theus by our independent registered public accounting firm in Fiscal 2023 and Fiscal 2022 were pre-approved by the Audit Committee
has set aof our Board, which concluded that the provision of such services by PwC member firms was compatible with the maintenance of that firm’s independence in the conduct of its auditing functions.The pre-approval procedure,policy provides for pre-approval of audit and thus all auditors’ engagements are handled in accordance withpermissible non-audit services and requires the specific pre-approval by the Audit Committee, prior to engagement, of such procedures,services, other than audit services covered by the annual engagement letter, except as follows:
would be considered de minimis under Exchange Act rules. A limited authority was delegated to the Chair of the Audit Committee to approve audit, audit-related and tax services in an amount of up to $50,000, provided such approval is reported to the Audit Committee at its next meeting.
Non-audit servicesAUDIT COMMITTEE REPORT
The Audit Committee consists solely of independent directors, as required by and in excess of $50,000 may only be approvedcompliance with SEC rules and regulations and the NYSE listing standards. The Audit Committee operates pursuant to a written charter adopted by the full Audit Committee.
All engagements by the Company of the auditors for 2016 and 2017 were pre-approved by the Audit Committee.
Vote Required for RatificationBoard.The Audit Committee is responsible for selecting ourassisting the Board in its oversight responsibilities related to accounting policies, internal controls, financial reporting and legal and regulatory compliance. Management of the Company has the primary responsibility for the Company’s financial reporting processes, principles and internal controls as well as the preparation of its financial statements. The Company’s independent registered public accounting firm is responsible for performing an audit of the year ending December 31, 2018. Accordingly, stockholder approval is not requiredCompany’s financial statements and expressing an opinion as to appoint PricewaterhouseCoopers LLP asthe conformity of such financial statements with accounting principles generally accepted in the United States. In addition, the independent registered public accounting firm is responsible for auditing and expressing an opinion on the Company’s internal control over financial reporting.
The Audit Committee has reviewed and discussed the Company’s audited financial statements as of and for the fiscal year endingended December 31, 2018. Our Board believes, however, that submitting2023 with management and the appointment of PricewaterhouseCoopers LLP to the stockholders for ratification is a matter of good corporate governance. If the stockholders do not ratify the appointment, the Audit Committee will review its future selection of an independent registered public accounting firm.
The
ratification ofAudit Committee has discussed with the
appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm
requires the
affirmative vote of a majoritymatters required to be discussed by applicable standards adopted by the Public Company Accounting Oversight Board, including matters concerning the independence of the
shares present atindependent registered public accounting firm. In addition, the
meetingAudit Committee has received from the independent registered public accounting firm written disclosures and the letter required by applicable requirements of the Public Company Accounting Oversight Board and has discussed these documents with the independent registered public accounting firm, as well as other matters related to the independent registered public accounting firm’s independence from management and the Company (including also considering whether the independent registered public accounting firm’s provision of tax services to the Company is consistent with maintaining the independent registered public accounting firm’s independence). The Audit Committee has concluded that the independent registered public accounting firm is independent from the Company and its management.Based on the review and discussions described above, the Audit Committee recommended to the Board that the Company’s audited financial statements be included in personits Annual Report on Form 10-K for Fiscal 2023, for filing with the SEC.
Submitted by the Audit Committee of the Company’s Board.
Michal Marom, Chair
Karin Corfee
Stanley B. Stern
Byron G. Wong
The foregoing Report of the Audit Committee of the Board of Directors shall not be deemed to be soliciting material or be incorporated by proxyreference by any general statement incorporating by reference this Proxy Statement into any filing under the Securities Act of 1933, as amended (the “Securities Act”), or under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), except to the extent the Company specifically incorporates this information by reference, and entitledshall not otherwise be deemed to vote.
OUR BOARD RECOMMENDS THAT YOU VOTE "FOR" THE RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.
PROPOSAL 3 — APPROVAL OF THE be filed with the SEC under the Securities Act or the Exchange Act.
ORMAT TECHNOLOGIES, INC. 2018 INCENTIVE| 2024 PROXY STATEMENT 60
Our Board has adoptedPROPOSAL 4
APPROVAL OF AMENDMENT TO THE COMPANY’S FOURTH AMENDED AND RESTATED CERTIFICATE OF INCORPORATION TO LIMIT THE LIABILITY OF CERTAIN OFFICERS
The Company is requesting that stockholders vote to approve an amendment to the Company’s Fourth Amended and recommendsRestated Certificate of Incorporation (the “Certificate of Incorporation”) to provide for stockholder approval the Ormat Technologies, Inc. 2018 Incentive Compensation Planelimination of monetary liability of certain officers of the Company in certain limited circumstances (the "2018 ICP" or“Proposed Amendment”). The following is only a summary of the "Plan").
The 2018 ICP will supersedeProposed Amendment, and is qualified in its entirety by reference to the
2012 Incentive Compensation Plan (the "2012 ICP")complete terms of the Certificate of Incorporation reflecting the Proposed Amendment (i.e., the Fifth Amended and Restated COI), which is
attached hereto as Appendix A (which shows deleted from the
only plan under which equity-based compensation may currently be awardedCertificate of Incorporation as stricken and text added to
our executives, non-employeeit as underlined). Stockholders are urged to read the actual text of the Fifth Amended and Restated COI.The Board has unanimously adopted and declared advisable, and resolved to recommend to the Company’s stockholders that they approve and adopt, an amendment to Article Seventh, paragraph five of the Certificate to eliminate monetary liability of certain officers of the Company in certain limited circumstances.
PURPOSE AND EFFECT OF PROPOSED AMENDMENT
Pursuant to and consistent with Section 102(b)(7) of the Delaware General Corporation Law (the “DGCL”), Article Seventh, paragraph five of the Certificate already eliminates the monetary liability of directors and other employees. Awards currently outstanding under the 2012 ICP will remain outstanding under the 2012 Plan in accordance with their terms. The purposethe DGCL. Effective August 1, 2022, Section 102(b)(7) of the 2018 ICPDGCL was amended to permit companies to include in their certificates of incorporation limitations of monetary liability for certain officers. Previously, Section 102(b)(7) of the DGCL provided for exculpation for directors only. Under Amended Section 102(b)(7), the “officers” of a corporation who may be exculpated include a person who (i) is to:
the president, chief executive officer, chief operating officer, chief financial officer, chief legal officer, controller, treasurer or chief accounting officer of the corporation at any time during the course of conduct alleged in the action or proceeding to be wrongful, (ii) is or was identified in the corporation’s public filings with the SEC because such person is or was one of the most highly compensated executive officers of the corporation at any time during the course of conduct alleged in the action or proceeding to be wrongful, or (iii) has consented to service of process in Delaware by written agreement.Consistent with Section 102(b)(7) of the DGCL, the Proposed Amendment would only permit limiting the liability of certain officers for breaches of the fiduciary duty of care for direct claims. Like the provision limiting the liability of directors, the Proposed Amendment does not permit the elimination of liability of certain officers for:
| • | · | Encourage share ownership by our key employees and directors and align compensation with performance results and stockholder interests; |
| · | Provide competitive incentive compensation sufficient to attract, motivate and retain key employees and directors with the Company; and |
| · | Promote decision-making that is consistent with the long-term goalsany breach of the Company and our stockholders.duty of loyalty to the company or its stockholders; |
| • | any acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of the law; or |
| • | any transaction from which the officer derived an improper personal benefit. |
All awards made pursuantIn addition, the Proposed Amendment does not permit the limitation of liability of certain officers in any derivative action. These limitations on exculpation of officers—and the limitations on exculpation of directors under the DGCL—are already incorporated into Article Seventh, paragraph five and will continue to be so incorporated in that section of the Proposed Amendment by specifically providing that “[t]o the fullest extent permitted by the General Corporation Law of the State of Delaware, as the same exists or as may hereafter be amended, no director or officer of the Corporation shall be personally liable to the 2018 ICP are in consideration of services performed or to be performed for the CompanyCorporation or any of its subsidiaries,stockholders for monetary damages for breach of fiduciary duty as a director or any divisionofficer. If the General Corporation Law of the State of Delaware is hereafter amended to authorize corporate action further eliminating or limiting the personal liability of directors or officers, then the liability of a director or officer of the Corporation shall be eliminated or limited to the fullest extent permitted by the General Corporation Law of the State of Delaware as so amended, automatically and without further action, upon the date of such amendment” (emphasis added).
Our Board believes that it is important to extend exculpation protection to officers, to the fullest extent permitted by DGCL, in order to better position the Company to attract and retain qualified and experienced officers. In the absence of such protection, such individuals might be deterred from serving as officers due to exposure to personal liability and the risk of incurring substantial expense in defending lawsuits, regardless of merit. Aligning the protections available to our officers with those available to our directors to the extent such protections are available under the DGCL would empower officers to exercise their business unitjudgment in furtherance of stockholder interests without the potential for distraction posed by the risk of personal liability.
ORMAT TECHNOLOGIES, INC. | 2024 PROXY STATEMENT 61
Taking into account the narrow class and type of claims for which officers would be exculpated, and the benefits our Board believes would accrue to the Company and its stockholders—enhancing our ability to attract and retain talented officers and potentially reducing future litigation costs associated with frivolous lawsuits—our Board determined that the Proposed Amendment is in the best interests of the Company orand its stockholders.
EFFECT OF THE VOTE
The Proposed Amendment will become effective upon the Company filing the Certificate of Amendment with the Delaware Secretary of State, which we anticipate doing as soon as practicable following stockholder approval of the Proposed Amendment. Our Board reserves the right to elect to abandon the Proposed Amendment at any of its subsidiaries.
If the 2018 ICPtime before it becomes effective even if it is approved by
our stockholders, the
Plan will become effective on May 7, 2018 and no further awards will be made under the 2012 ICP.stockholders. If our stockholders do not approve the
Proposed Amendment, Article Seventh, paragraph five will remain unchanged, our officers will not be entitled to exculpation under the DGCL, and a Certificate of Amendment setting forth the Proposed Amendment will not be filed with the Delaware Secretary of State.VOTE REQUIRED
Approval of the Proposed Amendment requires the affirmative vote of the holders of at least a majority of the outstanding Common Stock of the Company entitled to vote thereon. Abstentions and “broker non-votes” will count as votes “against” this proposal.
 | OUR BOARD RECOMMENDS THAT YOU VOTE “FOR” THE APPROVAL OF THE AMENDMENT OF THE CERTIFICATE OF INCORPORATION TO LIMIT THE LIABILITY OF CERTAIN OFFICERS AS PERMITTED BY LAW. |
ORMAT TECHNOLOGIES, INC. | 2024 PROXY STATEMENT 62
PROPOSAL 5
APPROVAL OF THE COMPANY’S SECOND AMENDED AND RESTATED 2018 INCENTIVE COMPENSATION PLAN TO INCREASE THE TOTAL NUMBER OF SHARES RESERVED THEREUNDER.
OVERVIEW
The Company’s 2018 ICP was originally adopted by our Board on May 7, 2018 and approved by our stockholders on May 12, 2018, and an amendment and restatement was adopted by our Board on April 7, 2022 and approved by our stockholders on April 18, 2022 (the “2018 ICP”). We are asking stockholders to approve the 2012 ICP will remain in effect in its current form,Ormat Technologies, Inc. Second Amended and Restated 2018 Incentive Compensation Plan (as amended, the “A&R 2018 ICP”), which was adopted by our Board on March 12, 2024, subject to its expiration date. However, thereapproval by our stockholders at the Annual Meeting.
What Changes Are We Proposing?
If approved by stockholders at the Annual Meeting, the A&R 2018 ICP would increase the number of shares of Common Stock authorized for issuance under the 2018 ICP by an additional 1,400,000 shares; after the proposed increase, approximately 4.1 million shares will be insufficient shares available for new equity award grants under the 2012A&R 2018 ICP after March 1, 2024. In addition, the A&R 2018 ICP would extend the period during which awards are permitted to be made under the A&R 2018 ICP from January 31, 2028 until the fifth anniversary of the date of stockholder approval of the A&R 2018 ICP (i.e., May 8, 2029).
We are not proposing to make annualany other changes to the 2018 ICP.
The A&R 2018 ICP, as amended (which will be identical to the current 2018 ICP, other than with respect to the foregoing changes) will provide incentive compensation through the grant of incentive stock options, non-qualified stock options, restricted stock, SARs, stock units, performance awards, phantom stock, incentive bonuses, other stock-based awards and dividend equivalents. As of March 1, 2024, 2,716,359 shares of Common Stock remained available for future grants of awards under the 2018 ICP. The closing price of a share of Common Stock on the New York Stock Exchange on March 14, 2024 was $69.93.
Why Are We Proposing This Amendment and Restatement?
We believe that an adequate reserve of Common Stock available for issuance under the A&R 2018 ICP is necessary to enable us to attract, motivate and retain directors and key employees, and to provide incentives for such individuals through Common Stock ownership and other rights that promote and recognize the financial success and growth of our Company. The 2018 ICP is a fungible share reserve, under which each appreciation award (i.e., a stock option and stock appreciation right) counts as one (1) share for each share subject to such award, while each full-value award (i.e., restricted stock, restricted stock unit and performance stock unit) counts as 2.15 shares for each share subject to such award. Consistent with general market practice among companies who are similar to us and to thoughtfully manage shareholder dilution, our 2023 long-term incentive grants to new hireswere entirely in the coming years. In this event,form of restricted stock units and performance stock units. If we determine to continue with an entirely (or predominantly) full-value equity program in future years and have an annual equity grant cadence, it will deplete the Compensation Committee would be required to revise its compensation philosophycurrent share reserve much faster because of the 2.15 fungible ratio. Furthermore, we are also mindful that macroeconomic, geopolitical and, devise other programsfor Israeli companies like Ormat, national events such as the current war, can cause unpredictable business cycle and stock price volatility that can create challenges in our ability to attract, retain and compensate its officers, non-employee directors, and key employees. The fair market value of a share of our Common Stock as of March 16, 2018 was $54.22.
Governance Highlights of the 2018 ICP
The 2018 ICP Plan incorporates certain governance best practices, including:
| · | Fungible plan design. The 2018 ICP uses a so-called “fungible share pool” design. Accordingly, for purposes of determining the number of shares of Common Stock available under the 2018 ICP, so-called “full-value” awards (stock-based awards other than stock options and stock appreciation rights) will be counted against the authorized share pool at an accelerated rate differently than stock options and stock appreciation rights. We have adopted this plan design after consultation with Frederic W. Cook & Co., Inc. to determine what structure would best align the interests of the Company and our stockholders. This plan structure offers the Company flexibilitymotivate talent. An increase in determining what types of equity awards are best suited for its needs within the overall authorized share pool. At the same time, this structure recognizes that certain types of awards may be more valuable than others. Under the fungible share pool, each share of our common stock issued pursuant to a stock option or stock appreciation right will reduce the number of shares available out of the authorized share pool by one share and each share issued pursuant to a full value award will reduce the number of shares available out of the authorized share pool by 3 shares. For example, this means that, for every 100 shares of restricted stock issued by us under the 2018 ICP, the number of shares available under the 2018 ICP will be reduced by 300 shares.
|
| · | No “Liberal” Share Recycling on Awards. Shares that are tendered or withheld as payment for the exercise price or for tax withholding obligations will not be available for future issuance under the 2018 ICP.
|
| · | No Dividends or Dividend Equivalents on Unvested Awards. Dividends or dividend equivalents may only be paid, if at all, upon vesting of the underlying award.
|
| · | Prohibition against repricing. Except in connection with an equitable adjustment or a Change in Control (as defined in the 2018 ICP), the 2018 ICP prohibits the repricing of outstanding stock options and stock appreciation rights, whether by amending an existing award or by substituting a new award at a lower price. The 2018 ICP also prohibits the payment of cash or other securities in exchange for out-of-the-money awards.
|
| · | No “Liberal” Change in Control definition. The Change in Control definition in the 2018 ICP is not “liberal” and, for example, would not occur merely upon shareholder approval of a transaction. A change in control must actually occur in order for the Change in Control provisions in the 2018 ICP to be triggered.
|
| · | No Reloads. There is no automatic grant of additional options or stock appreciation rights in connection with exercise.
|
Key Equity Plan Data
Our stock-based compensation, including the participation of employees and directors, results in a “burn rate” or share utilization rate presented in the table below. The table summarizes the number of shares available will provide appropriate flexibility and visibility to plan for future issuances of incentive equity awards grantedthat will enable us to be market competitive (both in terms of grant sizing and expanding the burn rate for eachnumber of eligible participants based on the needs of the last three fiscal years. The “burn rate” is not adjusted for forfeituresbusiness), and expirations, which would reduce the burn rate if taken into account.
| | | 2017 | | | 2016 | | | 2015 | |
| Stock options and stock appreciation rights (SARs) granted (a) | | | 162,000 | | | | 1,155,000 | | | | 45,000 | |
| Restricted stock and restricted stock units granted (b) | | | 23,000 | | | | 0 | | | | 0 | |
Total equity awards (a+b)(1) | | | 231,000 | | | | 1,155,000 | | | | 45,000 | |
| Weighted average common shares outstanding (c) | | | 50,110,000 | | | | 49,469,000 | | | | 48,562,000 | |
| Burn rate (a+b/c) | | | 0.46 | % | | | 2.33 | % | | | 0.09 | % |
(1)Reflects the gross number of shares underlyingwe believe that such awards made to employees during the respective year as disclosed in the stock-based compensation footnoteare a critical component of the 10-Koverall compensation of our executives and adjusted using one share for every stock option grantedkey employees and three shares for every full-value share granted.
The total potential dilution or “overhang” fromalign the
adoptioninterests of award recipients with those of our stockholders.What Is the Anticipated Effect of the Proposed Amendment and Restatement?
Based upon recent equity award requirements, we believe that the addition of 1,400,000 shares to the pool of Common Stock reserved for issuance under the A&R 2018 ICP is shown below. The “overhang” assumes thatwill provide us with enough shares to continue to offer competitive equity compensation for the entire share reserve is granted in stock options.
| | | Shares | |
| New shares requested for approval under the 2018 ICP | | | 5,000,000 | |
| Shares subject to outstanding stock options/SARs under prior plans | | | 1,524,828 | |
| Weighted - average exercise price of outstanding stock options/SAR’s | | $ | 41.35 | |
| Weighted – average remaining term of outstanding stock options/SAR’s | | 4.2 years | |
| Shares subject to outstanding full-value stock awards under prior plans | | | 22,742 | |
| Total available and outstanding stock awards and stock options (a) | | | 6,547,600 | |
| Common shares outstanding at 12/30/17 (b) | | | 50,609,051 | |
| Fully-diluted Overhang (a/a+b) | | | 11.46 | % |
_________
We expect that the share reserve under the 2018 ICP, if this proposal is approved by our stockholders, will be sufficient for awards for approximately three to six years, depending on the mix of stock options and full-value awards that is granted under the Plan.next five years. Expectations regarding future share usage could be impacted by a number of factors such as award type mix; hiring and promotion activity at the executive level; the rate at which shares are returned to the A&R 2018 ICP'sICP’s reserve upon the awards'awards’ expiration, forfeiture or cash settlement; the future performance of our stock price; the consequences of acquiring other companies; and other factors. While we believe that the assumptions we used are reasonable, future share usage may differ from current expectations.
See “—Summary of the
A&R 2018 ICP—Key Equity Plan Data” for more details.ORMAT TECHNOLOGIES, INC. | 2024 PROXY STATEMENT 63
If stockholders do not approve the proposed amendment and restatement, the 2018 ICP
will continue in its current form and we may not be able to continue to offer competitive equity packages to our directors, executives, current employees and new employees, and thus may be less attractive than other companies that offer equity, in future years. We believe that this could impede our long-term growth plans and impair our ability to operate our business, particularly during uncertain times. In addition, if we are unable to grant competitive equity awards, we may be required to offer additional cash-based incentives to replace equity as a means of competing for talent, which we believe could adversely affect our cash flow and ability to reinvest in the business. We also believe that equity grants are a more effective compensation vehicle than cash awards because they better align the financial interests of employees with the interests of stockholders, and promote actions that result in long-term value creation.If this Proposal 5 receives the requisite stockholder approval, the Company intends to register the additional shares of Common Stock available for issuance under the A&R 2018 ICP on a registration statement on Form S-8 under the Securities Act as soon as reasonably practicable following receipt of approval.
Plan Governance Highlights
The A&R 2018 Plan incorporates certain governance best practices, including:
 | No “liberal share recycling” of any awards. |
| Minimum vesting period of one year, except under certain limited circumstances and with permitted exceptions up to 5% of the share reserve. |
| Dividends and dividend equivalent rights, if any, on all awards will be subject to the same vesting requirements as the underlying award and will only be paid at the time those vesting requirements are satisfied. |
| No dividends or dividend equivalents on options or SARs. |
| Minimum 100% fair market value exercise price as of the date of grant for options and SARs. |
| No “liberal” change in control definition. |
| | No repricing of options or stock appreciation rights and no cash buyout of underwater options or stock appreciation rights without stockholder approval, except for certain equitable adjustments in connection with certain corporate transactions. |
| No excise tax gross-ups. |
| No “reloads” of options or SARs. |
SUMMARY OF THE A&R 2018 ICP
While the A&R 2018 ICP does not amend the existing 2018 ICP other than to increase the number of shares of Common Stock available for future grants, we have included a summary of the A&R 2018 ICP (consistent with our prior disclosures on the 2018 ICP) in accordance with SEC rules. The following is a summary (which shows deleted from the 2018 ICP as stricken and text added to it as underlined) of certain material features of the A&R 2018 ICP, which is qualified in its entirety by reference to the full textcomplete terms of the A&R 2018 ICP attached hereto as Appendix A.B. Stockholders are urged to read the actual text of the proposed A&R 2018 ICP. To the extent there is a conflict between this summary and the Plan,A&R 2018 ICP, the terms of the PlanA&R 2018 ICP will govern.
Eligible Participants.
ParticipantsOfficers, directors and employees (including prospective directors or employees) of the Company and its subsidiaries and consultants or others who may provide services to the Company and its subsidiaries are eligible to receive awards under the A&R 2018 ICP. As of the date of this Proxy Statement, the Company has -5January 1, 2024, approximately five executive officers and -9-directorsapproximately 1,600 employees were eligible to participate in the A&R 2018 ICP. Additionally, all of our director nominees, including the eight current directors up for reelection and the Company and its subsidiaries have approximately 1300 employees. Asone nominee up for election upon the departure of the date of this Proxy Statement, the Company has not determined the number ofone current director, will be eligible to participate. No consultants or others who provide services to the Company and its subsidiaries and who may receive awards underother service providers are current participants in the 2018 ICP and such number may vary from time to time.
ICP.Administration of the Plan.
A&R 2018 ICPThe PlanA&R 2018 ICP will be administered by the Compensation Committee or a subcommittee thereof formed by the Compensation Committee (the "Committee").Committee. The Compensation Committee determines the eligible individuals who will be granted awards, the terms of the awards, including the exercise price, the number of shares subject to each award, the exercisability of the awards and the form of consideration payable upon exercise. To the extent not inconsistent with applicable law, the Compensation Committee may (i) delegate to a committee of one or more directors of the Company the authority of the Compensation Committee under the PlanA&R 2018 ICP and (ii) authorize one or more executive officers to take certain actions under the Plan. As of the date of this Proxy Statement, the Company has not decided on any grant of awards under theA&R 2018 ICP but intends to make an award to our CEO to equitably replace the award that was cancelled on December 5, 2017.
ICP.Available Shares.
SharesSubject to adjustment as provided in the A&R 2018 ICP, as of the effective date of the A&R 2018 ICP, a total of 5,000,0008,100,000 shares of Common Stock will be authorized for issuance for awards granted under the A&R 2018 ICP (which includes the aggregate number of shares of Common Stock authorized
| (1) | For reference, the share reserve consists of (x) an aggregate of 6,700,000 shares previously approved by stockholders at the Company's 2018 and 2022 Annual Meetings, of which 2,716,359 shares remained available for grant after March 1, 2024, and (y) a request for 1,400,000 additional shares which is subject to stockholder approval at the Company's 2024 Annual Meeting. Please see “Key Equity Plan Data - Overhang” for additional information. |
ORMAT TECHNOLOGIES, INC. | 2024 PROXY STATEMENT 64
to be granted (whether or not subject to outstanding, or issued in settlement of, awards) under the 2018 ICP)(1), less (i) one share for every one share that was subject to an option or stock appreciation rightSAR granted after December 31, 2017March 1, 2024 under the 20122018 ICP and less three(ii) 2.15 shares of Common Stock for every one share that was subject to an award other than an option or stock appreciation rightSAR granted after December 31, 2017March 1, 2024 under the 20122018 ICP. Any shares of Common Stock that are subject to options or stock appreciation rightsSARs will be counted against this limit as one share of Common Stock for every one share granted, and any shares of Common Stock that are subject to awards other than options or stock appreciation rightsSARs will be counted against this limit as three2.15 shares of Common Stock for every one share granted. After the effective date of the Plan, no further awards may be granted under the 2012 ICP.
If (i) any shares of Common Stock subject to an award are forfeited, an award expires or an award is settled for cash (in whole or in part), or (ii) after December 31, 2017March 1, 2024 any shares of Common Stock subject to an award under the predecessor Amended and Restated 2012 ICPIncentive Compensation Plan (the “2012 ICP”) are forfeited, an award under the 2012 ICP expires or is settled for cash (in whole or in part), then in each case the shares of Common Stock subject to such award under the 2012 ICP will, to the extent of such forfeiture, expiration or cash settlement, be added to the shares of Common Stock available for awards under the Plan,A&R 2018 ICP, with certain exceptions as set forth in the Plan.A&R 2018 ICP. Shares tendered or withheld to pay the exercise price or tax withholding liability will not become available for further grants.
Any shares of Common Stock that again become available for awards under the PlanA&R 2018 ICP will be added back as (i) one share for every one share subject to options or stock appreciations rights granted under the PlanA&R 2018 ICP or the 2012 ICP and (ii) three2.15 shares of Common Stock for every one share subject to awards other than options or stock appreciations rights granted under the PlanA&R 2018 ICP or the 2012 ICP.
Notwithstanding anything to the contrary, shares of Common Stock tendered or withheld to pay the exercise price or tax liability with respect to an award shall not be added to the A&R 2018 ICP.
The maximum number of shares subject to awards granted pursuant to the PlanA&R 2018 ICP during a single fiscal year to any non-employee director, together with any cash fees paid during the fiscal year to the non-employee director in respect of the director’s service as a member of the Board during such year (including service as a member or chair of any committees of the Board), will not exceed $500,000 in total value (calculated based on the grant date fair value of such awards). The independent members of the Board may make exceptions to this limit for a non-executive chair of the Board, provided that the non-employee director receiving such additional compensation does not participate in the decision to award such compensation.
Upon the adoption of the 2018 ICP in 2018, the Company’s Amended and Restated 2012 Incentive Compensation Plan (the "2012 ICP”) expired and no further awards could be granted under it. However, the 2012 ICP remains in effect with respect to outstanding equity awards previously made under it.
Dividends and Dividend Equivalents
In no event shall dividends or dividend equivalents be paid with respect to options or stock appreciation rights.SARs. Notwithstanding any other provision of the PlanA&R 2018 ICP to the contrary, with respect to any Award that provides for or includes a right to dividends or dividend equivalents, if dividends are declared during the period that an equity award is outstanding, such dividends (or dividend equivalents) shall either (i) not be paid or credited with respect to such Award or (ii) be accumulated but remain subject to vesting requirement(s) to the same extent as the applicable Award and shall only be paid at the time or times such vesting requirement(s) are satisfied.
Minimum Vesting
Equity awards under the A&R 2018 ICP will be subject to a minimum one-year vesting period, with certain limited exceptions, including (i) for substitute awards granted in connection with mergers or acquisitions, (ii) shares delivered in lieu of fully vested cash obligations, (iii) awards granted to non-employee directors vesting on the earlier of the one-year anniversary of the date of grant and the next annual meeting of stockholders held at least 50 weeks after the immediately preceding year’s annual meeting, (iv) accelerated exercisability or vesting in cases of employment termination, retirement, a death, disability or change of control, and (v) at the Compensation Committee’s discretion, up to 5% of the shares of Common Stock authorized for issuance under the A&R 2018 ICP.
Awards
The following awards may be made under the A&R 2018 ICP.
Options.OPTIONS
A stock option is the right to purchase shares of our Common Stock at a fixed exercise price for a fixed period of time. The Compensation Committee will determine the exercise price of options granted under the Plan,A&R 2018 ICP, which will be at least equal to the fair market value of our Common Stock on the date of grant. If the aggregate fair market value, determined as of the date the option is granted, of the shares of our Common Stock for which any employee may be granted incentive stock options which are exercisable for the first time in any calendar year exceeds $100,000, the value of the options above this threshold will be treated as Non-Qualified options. Stock options generally may not be exercised after ten years from the date of the grant thereof, unless a shorter period is specified in the grant agreement. At the relevant time of exercise, the option price must be paid in full in cash or, if permitted in the award agreement, in shares of our Common Stock with a fair market value on the date of exercise equal to the option price, by reduction in the number of shares of our Common Stock otherwise deliverable upon exercise of the option with a fair market value equal to the aggregate exercise price at the time of exercise or in a combination of cash and shares of any of the foregoing. After termination of any of our employees, directors or independent contractors, unless the Compensation Committee determines otherwise,
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an unvested option typically will be subject to forfeiture, and a vested option will be exercisable for the period of time stated in the option agreement. If termination is due to death or retirement, the option generally will remain exercisable for one year following such termination. In all other cases, the option generally will remain exercisable for three months. However, an option may never be exercised later than the expiration of its term.
Stock Appreciation Rights.STOCK APPRECIATION RIGHTS
A stock appreciation right, or SAR, is the right to receive the appreciation in the fair market value of our Common Stock between the exercise date and the date of grant for that number of shares of our Common Stock with respect to which the stock appreciation rightSAR is exercised. A stock appreciation rightSAR may be granted in conjunction with an option or alone. We may pay the appreciation in either cash, in shares of our Common Stock with equivalent value, or in some combination, as determined by the Compensation Committee. The Compensation Committee determines the exercise price of stock appreciation rights,SARs, the vesting schedule and other terms and conditions of stock appreciation rights;SARs; however, stock appreciation rightsSARs expire under the same rules that apply to stock options.
Restricted Stock.RESTRICTED STOCK
Restricted stock awards are awards of shares of our Common Stock that vest in accordance with terms and conditions established by the Compensation Committee. The Compensation Committee may impose whatever conditions to vesting it determines to be appropriate. The Compensation Committee will determine the number of shares of restricted stock granted to any employee. Unless the Compensation Committee determines otherwise, shares that do not vest typically will be subject to forfeiture to the extent the vesting schedule and/or specified performance or other criteria have not been satisfied, or upon the termination of the employee, director or independent contractor for any reason, including death or retirement.
Stock Units.STOCK UNITS
Stock units are rights to receive payment of an amount equal to all or a portion of the fair market value of a specified number of shares of our Common Stock at a future date.
Phantom Stock.PHANTOM STOCK
Phantom stock are rights to receive an amount of cash equal to the fair market value of a share of our Common Stock at a specified date. The Compensation Committee determines the terms and conditions of phantom stock.
Incentive Bonuses.INCENTIVE BONUSES
Incentive bonuses are rights to receive cash or shares of our Common Stock. The Compensation Committee determines the terms and conditions of such incentive bonuses.
Performance Awards.PERFORMANCE AWARDS
Performance awards are awards of restricted stock, stock units, phantom stock, and incentive bonus awards that will result in a payment to a key employee only if performance goals established by the Compensation Committee or the Grant Committee (as defined in the A&R 2018 ICP) are achieved. The Compensation Committee or the Grant Committee will establish a performance period, performance goals and performance objectives in its discretion, which, depending on the extent to which they are met, will determine the number and/or the value of performance units and performance shares to be paid out to key employees. The performance goals may be based upon one or more objective or subjective performance criteria selected by the Compensation Committee or the Grant Committee, (as defined in the 2018 ICP), as the case may be, to measure the performance of the Company as a whole, and/or any subsidiary, business unit or individual objectives. Such performance goals and performance objectives also may be based solely on the Company’s performance or based on the relative performance of other companies or other comparisons of any indicators of performance relative to other companies.
OTHER STOCK-BASED AWARDS
Other types of stock-based awards may also be granted, either alone or in tandem with any other award, so long as they are consistent with the purpose of the A&R 2018 ICP. Special terms may apply for awards to participants who are foreign nationals, or who are employed outside of the United States, as the Compensation Committee considers necessary or appropriate to accommodate differences in local law, tax policy or custom.
Dividend Equivalents.
EquivalentsAny award (other than options, stock appreciation rightsSARs and restricted stock) under the PlanA&R 2018 ICP may, in the discretion of the Compensation Committee, earn dividend equivalents.
Transferability of Awards. Notwithstanding any other provision to the contrary, dividend equivalents shall not be paid with respect to any forfeitable awards but may be accumulated and only paid upon payment of the vested and earned award.
Transferability of Awards
No award or portion of an award will be transferable other than by will or by the laws of descent and distribution, except that an option and tandem stock appreciation rightSAR may be transferred pursuant to a domestic relations order or by gift to a family member of the holder to the extent permitted in the applicable award. A tandem stock appreciation rightSAR may never be transferred except to the transferee of the related option. Only the participant may exercise an award during his or her lifetime.
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Adjustments
If there is a merger, consolidation, stock or other non-cash dividend, extraordinary cash dividend, split-up, spin-off, combination or exchange of shares, reorganization or recapitalization or change in capitalization, or any other similar corporate event in respect of the Company, the Compensation Committee will make such equitable adjustments and take such actions as applicable under the circumstances, which will include, as they relate to outstanding awards, maintaining the intrinsic value of each outstanding award. Such adjustments and actions shall include, as applicable, changes in: (i) the number of shares of Common Stock subject to the A&R 2018 ICP or any award or (ii) the number and kind of shares of Common Stock that are subject to any award and any applicable exercise price. The determination by the Compensation Committee as to the terms of any such adjustments will be final, conclusive and binding.
Amendment and Termination of the Plan.
A&R 2018 ICPNo awards will be made under the PlanA&R 2018 ICP after January 31, 2028.May 8, 2029. In addition, our Board has the authority to amend, suspend or terminate the A&R 2018 ICP, provided that such amendment does not adversely affect any award previously granted under the A&R 2018 ICP, unless our Board determines that an amendment is desired or appropriate to comply with the requirements of Section 409A of the Internal Revenue Code.Code of 1986, as amended (the “Code”). Our Board may not, however, except as otherwise provided in the Plan,A&R 2018 ICP, without the approval of stockholders, (i) change the class of eligible individuals who may become participants, (ii) increase the maximum number of shares of Common Stock authorized for the 2018 ICP, (iii) reduce the basis upon which the minimum option price is determined, (iv) extend the period within which awards under the 2018 ICP may be granted, (v) provide for an option or stock appreciation rightSAR that is exercisable more than ten years from the date it is granted unless the participant dies or (vi) amend the provisions of the PlanA&R 2018 ICP relating to repricing.
Repricings Prohibited
Except in connection with an equitable adjustment or a Change in Control (as defined in the A&R 2018 ICP), the A&R 2018 ICP prohibits the repricing of outstanding stock options and SARs, whether by amending an existing award or by substituting a new award at a lower price. The A&R 2018 ICP also prohibits the payment of cash or other securities in exchange for out-of-the-money awards.
Claw-backs
An award agreement may provide that the Compensation Committee may cancel, or that the participant will forfeit and repay any value realized in respect of, an award if the participant engages in activity that is adverse to the interest of the Company. An award agreement may also provide for the participant to repay any amount paid in excess for any reason, including due to a misstatement. Awards will be subject to claw-back or forfeiture if required pursuant to applicable law, including pursuant to our clawback policy. Please see “Compensation Discussion & Analysis— 2023 Compensation Determinations—Other Policies” for a description of our Claw-back Policy.
Tax Matters
The following is a brief summary of the principal United States federal income tax consequences of awards under the A&R 2018 ICP. This summary is not intended to be exhaustive and does not describe state, local or foreign tax laws.
Incentive Stock Options.
OptionsAll of the shares authorized for grant under the PlanA&R 2018 ICP may be granted in the form of incentive stock options. The grant of an incentive stock option will not result in any immediate tax consequences to the Company or the participant. In addition, a participant will not recognize taxable income, and we will not be entitled to any deduction, upon the exercise of an incentive stock option while the participant is an employee or within three months following termination of employment (longer in the case of death). In such event, the excess of the fair market value of the shares acquired over the option price will be includible in the participant’s alternative minimum taxable income for the year of exercise for purposes of the alternative minimum tax. If the participant does not dispose of the shares acquired within one year after their receipt (and within two years after the option was granted), gain or loss recognized on the subsequent disposition of the shares will be treated as long-term capital gain or loss. Capital losses of individuals are deductible only against capital gains and a limited amount of taxable ordinary income. In the event of an earlier disposition, the participant will recognize taxable ordinary income in an amount equal to the lesser of (i) the excess of the fair market value of the shares on the date of exercise over the option price; or (ii) if the disposition is a taxable sale or exchange, the amount of any gain realized. Any additional gain to the participant will be treated as capital gain, long-term or short-term, depending on how long the shares have been held. Upon such a disqualifying disposition, we will be entitled to a deduction in the same amount and at the same time as the participant recognizes such taxable ordinary income, subject to the limitations of Code Section 162(m).
of the Code.Non-Qualified Stock Options.
OptionsThe grant of a non-qualified stock option will not result in any immediate tax consequences to the Company or the participant. Upon the exercise of a non-qualified stock option, the participant will recognize taxable ordinary income, and we will be entitled to a deduction, subject to the limitations of Code Section 162(m), of the Code, equal to the difference between the option price and the fair market value of the shares acquired at the time of exercise. Any gain or loss upon a subsequent sale or exchange of the shares will be capital gain or loss, long-term or short-term, depending on how long the shares have been held.
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Stock Appreciation Rights.
RightsThe grant of either a tandem SAR or a freestanding SAR will not result in any immediate tax consequences to the Company or the grantee. Upon the exercise of either a tandem SAR or a freestanding SAR, any cash received and the fair market value on the exercise date of any shares received will constitute taxable ordinary income to the grantee. We will be entitled to a deduction in the same amount and at the same time, subject to the limitations of Code Section 162(m).
of the Code.Restricted Stock.
StockA participant normally will not recognize taxable income upon an award of restricted stock, and we will not be entitled to a deduction, until the termination of the restrictions. Upon such termination, the participant will recognize taxable ordinary income in an amount equal to the fair market value of the shares at that time, plus the amount of the dividends thereon to which the participant then becomes entitled. However, a participant may elect to recognize taxable ordinary income in the year the restricted stock is awarded in an amount equal to its fair market value at that time, determined without regard to the restrictions. We will be entitled to a deduction in the same amount and at the same time as the participant realizes income, subject to the limitations of Code Section 162(m).
of the Code.Stock Units.
UnitsAny cash and the fair market value of any shares received in connection with the grant of a stock unit under the A&R 2018 ICP will constitute taxable ordinary income to the participant in the year in which paid, and the Company will be entitled to a deduction in the same amount, subject to the limitations of Code Section 162(m).
of the Code.Phantom Stock, Incentive Bonuses and Other Stock-Based Awards.
AwardsThe grant of phantom stock, incentive bonuses and other stock-based awards will generally constitute taxable ordinary income to the participant in the year in which paid, and the Company will generally be entitled to a deduction in the same amount, subject to the limitations of the Code Section 162(m).
of the Code.Dividend Equivalents.
EquivalentsDividend equivalents generally will be taxed at ordinary income rates when paid. In most instances, they will be treated as additional compensation that we will be able to deduct at that time, subject to the limitations of Code Section 162(m).
Withholding. of the Code.Withholding
Applicable taxes required by law will be withheld from all amounts paid in satisfaction of an award.
Section 162(m) of the Internal Revenue Code.
Internal Revenue Code
Section 162(m) of the Code generally limits the deductible amount of annual compensation paid by a public company to a “covered employee” (i.e.i.e., the CEO, the CFO and any of the three other most highly paid executive officers) to no more than $1 million. Under 2017 tax legislation, any individual who is a "covered employee“covered employee” for 2017 or thereafter, remains a "covered employee"“covered employee” for any compensation otherwise deductible for all subsequent years. The 2017 tax legislation also eliminated the Section 162(m) exception to the $1 million deduction cap for "performance-based"“performance-based” compensation.
Section 409A of the Internal Revenue Code.
CodeSection 409A of the Internal Revenue Code affects the timing for recognition of income attributable to certain types of non-qualified deferred compensation. Our Board of Directors believes the A&R 2018 ICP complies with Section 409A of the Code.
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KEY EQUITY PLAN DATA
Burn Rate
Our stock-based compensation, including the participation of employees and directors, results in a “burn rate” or share utilization rate presented in the table below. The table sets forth information regarding award grants, the burn rate for each of the last three years, and the average burn rate over the last three years. The burn rate has been calculated as the quotient of (i) the sum of all options, SARs, restricted stock and RSUs granted in such year, divided by (ii) the weighted average number of shares of Common Stock outstanding at the end of such year. The “burn rate” is not adjusted for forfeitures and expirations, which would reduce the burn rate if taken into account.
| | | Year Ended December 31, | 3-Year | |
| | | 2023 | | 2022 | | 2021 | | Average | |
| Stock options & SARs granted (a) | | — | | 514,384 | | 15,884 | | 176,756 | |
| Time-based restricted stock and RSUs granted (b) | | 189,324 | | 108,502 | | 11,804 | | 103,210 | |
| Performance-based RSUs granted (c) | | 35,081 | | 19,581 | | — | | 18,221 | |
| Total equity awards (a+b+c) | | 224,405 | | 642,467 | | 27,688 | | 298,187 | |
| Weighted average shares of Common Stock outstanding (d) | | 59,423,928 | | 56,062,771 | | 56,004,100 | | 57,163,600 | |
| Burn rate ((a+b+c)/d) | | 0.38 | % | 1.15 | % | 0.05 | % | 0.52 | % |
Overhang
The total potential dilution or “overhang” from the adoption of the A&R 2018 ICP is shown below. The 2018 ICP and the 2012 ICP are the only incentive plans under which equity awards are outstanding. The fully-diluted “overhang” assumes that the entire share reserve is granted in stock options. Other than the shares of common stock outstanding, all information is as of March 1, 2024.
| Shares available for grant under the 2018 ICP (a) | 2,716,359 | * |
| Additional shares requested for approval under the A&R 2018 ICP (b) | 1,400,000 | |
| Shares subject to outstanding stock options/SARs under the existing 2018 ICP and 2012 ICP** | 1,139,169 | |
| Weighted-average exercise price of outstanding stock options/SARs | | $68.49 | |
| Weighted–average remaining term of outstanding stock options/SARs | 3.8 years | |
| Shares subject to outstanding full-value stock awards under the existing 2018 ICP and 2012 ICP** | 601,457 | |
| Total outstanding stock options/SARs and full-value stock awards (c) | 1,740,626 | |
| Shares of common stock outstanding as of the Record Date (d) | 60,381,538 | |
| Fully-diluted Overhang (a+b+c) divided by (a+b+c+d) | 8.84 | % |
| * | Each option/SAR granted after March 1, 2024 counts as one share and each full value award granted after March 1, 2024 will count as 2.15 shares. |
| ** | No further grants may be made under the 2012 ICP. |
New Plan Benefits
As of the date hereof, no awards have been granted using the 1,400,000 shares of Common Stock proposed to be added to the A&R 2018 ICP. Awards under the A&R 2018 ICP using these shares will be granted at the discretion of the Compensation Committee based on a number of factors and, accordingly, are not determinable.
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Awards Granted under the Existing 2018 ICP
The following table sets forth information as of March 1, 2024 with respect to the number of outstanding shares of Common Stock underlying awards (including both exercisable and unexercisable SARs) that have been granted under the 2018 ICP to our named executive officers, director nominees and the specified groups set forth below. The number of PSUs assumes a payout at the maximum level.
| Name | | SARs | | RSUs | | PSUs |
| Named Executive Officers | | | | | | |
| Doron Blachar | | 55,268 | | 27,543 | | 75,189 |
| Assaf Ginzburg | | 31,026 | | 12,514 | | 32,517 |
| Shimon Hatzir | | 4,974 | | 10,375 | | 25,522 |
| Ofer Ben Yosef | | 25,672 | | 3,916 | | 11,198 |
| Jessica Woelfel | | 24,252 | | 6,116 | | 18,034 |
| Director Nominees | | — | | — | | — |
| Isaac Angel | | — | | 2,170 | | — |
| Ravit Barniv | | — | | — | | — |
| Karin Corfee | | — | | 1,447 | | — |
| David Granot | | 2,525 | | 1,447 | | — |
| Michal Marom | | — | | 1,447 | | — |
| Mike Nikkel | | — | | — | | — |
| Dafna Sharir | | 4,146 | | 1,447 | | — |
| Stanley B. Stern | | 4,146 | | 1,447 | | — |
| Byron G. Wong | | 2,525 | | 1,447 | | — |
| All Current Executive Officers as a Group(1) | | 141,192 | | 60,463 | | 162,460 |
| All Current Non-Executive Officer Directors as a Group(2) | | 13,342 | | 10,852 | | — |
| Other Persons | | | | | | |
| Each associate of the current executive officers,non-executive officer directors and director nominees | | — | | — | | — |
| Each other person who received or is to receive 5% of awards under the 2018 ICP | | — | | — | | — |
| All Non-Executive Officer Employees as a Group | | 976,554 | | 402,364 | | 39,789 |
| (1) | Includes all named executive officers. |
| (2) | Includes all of our current directors, namely, Isaac Angel, Karin Corfee, David Granot, Hidetake Takahashi, Michal Marom, Mike Nikkel, Dafna Sharir, Stanley B. Stern, and Byron G. Wong. |
INTEREST OF CERTAIN PERSONS IN THE A&R 2018 ICP
Our executive officers, employees who perform services for or on our behalf, director nominees (including both current directors up for reelection and our two new nominees) and certain of their associates will be eligible to receive awards under the A&R 2018 ICP if the amendment and restatement is approved. Accordingly, such individuals have a substantial interest in the approval of this Proposal 5. For more information, see “—New Plan Benefits—Awards Granted under the Ormat Technologies, Inc.Existing 2018 Incentive Compensation PlanICP” above.
VOTE REQUIRED
Approval of the amendment and restatement to the A&R 2018 ICP requires the affirmative vote of the holders of a majority of the voting power of our shares present in person or represented by proxy and entitled to vote on the matter.
OUR BOARD RECOMMENDS THAT YOU VOTE "FOR" Abstentions will count as votes “against” and “broker non-votes” will have no effect on the outcome of this proposal. | YOUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” THE APPROVAL OF THE A&R 2018 ICP TO INCREASE THE TOTAL NUMBER OF SHARES OF COMMON STOCK UNDERLYING OPTIONS, SARS OR OTHER AWARDS THAT MAY BE GRANTED UNDER SUCH PLAN. |
ORMAT TECHNOLOGIES, INC. 2018 INCENTIVE COMPENSATION PLAN.| 2024 PROXY STATEMENT 70
PROPOSALTRANSACTIONS WITH RELATED PERSONS
The following section discloses all related person transactions which we have been a party since January 1, 2023, as required to be reported under Item 404(a) of Regulation S-K.
TRANSACTIONS WITH ORIX
On May 4, — ADVISORY VOTE ON EXECUTIVE COMPENSATION
Under Section 14A2017, the Company entered into a commercial cooperation agreement (the “CCA”), a registration rights agreement (the “RRA”) and the Governance Agreement (collectively, the “Transaction Agreements”) with ORIX in connection with the ORIX Transaction. The Transaction Agreements became effective upon the closing of the
Exchange ActORIX Transaction on July 26, 2017.Commercial Cooperation Agreement
Pursuant to the Commercial Cooperation Agreement, the Company and its affiliates have an exclusive right of first refusal to own, invest in, develop and operate new geothermal business opportunities outside the State of Japan that are sourced by or presented to ORIX or its affiliates after the effective date of the Commercial Cooperation Agreement, subject to certain limitations. The Company and its affiliates also have the exclusive right to provide certain geological, engineering, procurement, construction, operational and/or management services, and the option to acquire up to 49% ownership of all geothermal projects within the State of Japan that (i) are new geothermal business opportunities sourced by or presented to ORIX or its affiliates after the effective date of the Commercial Cooperation Agreement, (ii) have an expected generating capacity of greater than 15MW and (iii) that are 100% owned by ORIX or its affiliates, or with respect to which ORIX or its affiliates have the ability to control all relevant decisions without being required to obtain any third party consent. Subject to certain limitations, ORIX and its affiliates must use their commercially reasonable efforts to engage the Company or its affiliates to provide certain geological, engineering, procurement, construction, operational and/or management services to all geothermal projects within the State of Japan that meet the foregoing criteria, but that have an expected generating capacity of 15MW or less. Furthermore, ORIX must use commercially reasonable efforts to assist the Company and its affiliates in obtaining project financing for geothermal projects from certain providers of debt financing with which ORIX or its affiliates have a commercial relationship at the applicable time.
The Commercial Cooperation Agreement will be suspended during any period in which ORIX and its affiliates cease to own, collectively, at least 13% of the voting power of all of our outstanding Common Stock or other securities entitled to vote generally for the election of directors to the Board. In November 2022, ORIX sold 4,312,500 shares pursuant to SEC rulesan underwritten secondary offering by the Company, and regulations,following the offering, ORIX and its affiliates collectively owned 11.9% of the voting power of our outstanding voting securities. Therefore, the Commercial Cooperation Agreement is currently suspended. During any such period, neither the Company nor ORIX will have any obligations under the Commercial Cooperation Agreement nor will they be liable for any claims under the Commercial Cooperation Agreement that arise during such period. The Commercial Cooperation Agreement may not be terminated except (i) by mutual agreement of the Company and ORIX, (ii) on the effective date of termination of the Governance Agreement (other than a termination resulting from the breach thereof by ORIX or its affiliates), (iii) in the event of an uncured event of default or (iv) upon certain bankruptcy or insolvency events with respect to any of the parties thereto.
Governance Agreement
The Governance Agreement sets forth the rights and obligations of the Company and ORIX with respect to certain corporate governance matters of the Company, including, but not limited to, the appointment of directors to our Board, the composition of Board committees and voting with respect to matters submitted to a vote of the stockholders of the Company. The Governance Agreement also sets forth limitations on the ability of ORIX and its affiliates to acquire our securities in excess of certain thresholds.
Pursuant to the Governance Agreement, the Company (i) appointed the three directors designated by ORIX to our Board to fill the vacancies created by the resignation of three of the Company’s former directors from the Board upon the closing of the ORIX Transaction and (ii) increased the size of the Board to nine directors and appointed the Independent Director (as defined in the Governance Agreement) to our Board. See “Corporate Governance—Overview” above for additional information concerning ORIX’s and the Company’s rights to designate director nominees for election to our Board and appointment to Board committees pursuant to the Governance Agreement.
Under the Governance Agreement, the Company and our Board must cause each director nominee designated by ORIX and the Independent Director to be included in management’s slate of nominees for election as a director at each annual or special meeting of stockholders of the Company at which directors are to be elected. The Company must also use reasonable best efforts to cause the election of each such director nominee and Independent Director and, in the event any such director nominee or Independent Director fails to be elected or, following election, ceases to be a director for any reason, ORIX has the right to designate replacement director nominees or fill the vacancy on our Board, as applicable, subject to approval by the Company.
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The Governance Agreement also provides that ORIX will vote or cause to be voted all securities beneficially owned by ORIX and its affiliates in favor of the election of all director nominees nominated by the Nominating and Corporate Governance Committee, and ORIX will not take, alone or in concert with others, any action to remove or oppose any director or director nominee nominated by the Nominating and Corporate Governance Committee.
The Governance Agreement also restricts ORIX and its affiliates from taking certain actions during the period that began upon the closing of the ORIX Transaction on July 26, 2017 and ends on the later of the third anniversary of such closing and the date on which ORIX is no longer entitled to nominate any directors to our Board (the “Standstill Period”), including:
| • | beneficially owning, individually or as part of a group, any class or series of voting securities of the Company in excess of 30% of the aggregate amount of the then-outstanding voting securities of such class or series; |
| • | engaging in any “solicitation” of “proxies” (as those terms are defined under Regulation 14A under the Exchange Act) relating to the election of directors with respect to the Company, becoming a “participant” (as such term is defined under Regulation 14A under the Exchange Act) in any solicitation seeking to elect directors not nominated by our Board or otherwise seeking to influence any person or group with respect to the voting of any voting securities of the Company other than with respect to ORIX’s director nominees; |
| • | voting in favor of or otherwise supporting any transaction that would result in a Change of Control (as defined in the Governance Agreement) of the Company, if the transaction is opposed by our Board; |
| • | making any public request or proposal seeking to have the Company waive or make amendments to our organizational documents in a manner that would either impede or facilitate a Change of Control of the Company; and |
| • | making any public request or proposal that the Company effect any material change to its dividend policy. |
Such restrictions will be suspended upon certain events, including, but not limited to, the Company’s entering into a definitive agreement providing for a transaction that would result in a Change of Control.
During the Standstill Period, ORIX is also required to vote or cause to be voted, on any action to be taken by the Company’s stockholders, in proportion to votes cast by all the stockholders of the Company (other than ORIX and its affiliates), all voting securities of the Company representing in excess of 25% of the outstanding voting power of the Company.
The Governance Agreement grants ORIX preemptive rights in the event of certain issuances of securities by the Company, as well as information rights with respect to the Company’s business, operations, finances, personnel and prospects, upon ORIX’s reasonable request, but in no event more than once during any twelve-month period.
The Governance Agreement will terminate or may be terminated as follows:
| • | at the time ORIX and its affiliates collectively hold less than 5% of the voting power of all the outstanding voting securities of the Company; |
| • | upon the mutual written agreement of the Company and ORIX; |
| • | by ORIX, upon a material breach by the Company of the Governance Agreement that has not been cured within ten business days after written notice thereof has been received by the Company; or |
| • | by the Company, upon a material breach by ORIX of the Governance Agreement that has not been cured within ten business days after written notice thereof has been received by ORIX. |
On April 13, 2020, the Company and ORIX entered into an amendment (the “Amendment”) to the Governance Agreement that facilitates the expansion of the Board of Directors in order to allow the addition of Mr. Angel as a director prior to his retirement as CEO of the Company on July 1, 2020. Pursuant to the Amendment:
| • | ORIX agreed to take such action as was necessary to procure that at least a majority of the directors designated by ORIX consent to increase the number of directors on the Board of Directors to a maximum of ten directors, effective on the date of the Company’s 2020 Annual Meeting of Stockholders; subject to any such expansion solely being made solely for the purpose of the Company’s then current CEO, Isaac Angel and no other party, serving on the Board of Directors as an additional director to those then currently serving. |
| • | The Company agreed to take all such steps as were necessary to ensure that only nine or fewer individuals (inclusive of the directors designated by ORIX) were nominated for approval at its 2021 Annual Meeting of Stockholders. |
| • | The Company agreed that in the event that it had not convened and completed its 2021 Annual Meeting of Stockholders on or prior to a date 15 months from the date of the 2020 Annual Meeting of Stockholders and the number of directors exceeded nine (inclusive of the directors designated by ORIX), the Chair of the Board of Directors would at the earliest time practicable convene a special meeting of the Board of Directors to take any and all such action as was necessary to reduce the size of the Board to no more than nine directors (including the directors designated by ORIX) with immediate effect. |
In November 2022, ORIX sold 4,312,500 shares pursuant to an underwritten secondary offering by the Company, and following the offering, ORIX and its affiliates collectively owned 11.9% of the voting power of our outstanding voting securities. Therefore, ORIX now has the right to nominate one director to our Board, but no longer has the right to jointly propose and nominate with the Company the Independent ORIX Director. Pursuant to the Governance Agreement, ORIX was required to use its reasonable best efforts to cause two of the directors nominated by it to tender his or her resignations, unless a majority of the directors other than the directors appointed by ORIX agreed in writing that such directors were not required to resign. A majority of the members of our Board agreed that none of the directors nominated by ORIX were required to resign following the offering and that such directors could continue to serve on our Board at least until the 2023 Annual Meeting of Stockholders. The Board has determined to re-nominate two of the three directors previously nominated by ORIX at this 2024 Annual Meeting of Stockholders even though it is no longer required by the Governance Agreement.
ORMAT TECHNOLOGIES, INC. | 2024 PROXY STATEMENT 72
Registration Rights Agreement
The Registration Rights Agreement, as amended on November 16, 2022, provides, among other things, that we are required to holdfile a shelf registration statement on Form S-3 or Form S-1, or a post-effective amendment or prospectus supplement to any then effective registration statement, to permit a public offering and sale of shares of Common Stock held by ORIX, after the closing of the November 2022 offering. We are required to keep such shelf registration statement available for a period of three years after its initial effectiveness subject to our right to suspend its availability for up to 120 days (and no more than 90 consecutive days) in any calendar year. ORIX may, at any time, request an advisory stockholder voteunderwritten shelf takedown for shares of Common Stock held by it; provided, that the market value of such shares to approvebe sold pursuant to the compensationunderwritten shelf takedown have a market value of our named executive officers at least every three years. On May 8, 2017$100 million at the time of the demand. ORIX may exercise such demand rights twice (with the November 2022 offering accounting for one such demand); provided that ORIX will be entitled to exercise such demand registration rights a third time in the event we include shares for our 2017 Annual Meeting of Stockholders, our stockholders participatedown account in an advisory voteoffering pursuant to recommendeither of the frequency with which we should hold our advisory stockholder vote to approve the compensation of our named executive officers. Our stockholders cast the greatest number of votes to hold our advisory stockholder vote to approve the compensation of our named executive officers every year. Our last such advisory stockholder vote on executive compensation was heldfirst two demands.
The Registration Rights Agreement also provides that if at the 2017 Annual Meeting of Stockholders.
The present vote to approve the compensation of our named executive officers is advisory and therefore not binding onany time the Company
our Board orproposes to file a registration statement with the
Compensation Committee. However, participatingSEC in connection with any public offering of its Common Stock, ORIX will be permitted to require the Company to include the securities held by ORIX in such
vote is an important mechanismregistration. At least 5 business days before the Company files any registration statement registering securities held by
which our stockholdersORIX or any related prospectus, or any amendment or supplement thereto, the Company must furnish to ORIX for review copies of all documents proposed to be filed and include in such documents reasonable changes as ORIX and the Company may
convey their views about our executive compensation programs and policies. agree should be included.REVIEW, APPROVAL OR RATIFICATION OF TRANSACTIONS WITH RELATED PERSONS
Our Board of Directors recognizes the fact that transactions with related persons present a heightened risk of conflicts of interests and/or improper valuation (or the perception thereof) and adopted a written policy on transactions with related persons. Under this policy:
| • | any related person transaction, and any material amendment or modification to a related person transaction, in which the amount involved exceeds $120,000, in each case which are required to be disclosed pursuant to Item 404(a) of Regulation S-K or approved pursuant to NYSE rules, must be reviewed and approved or ratified by the Audit Committee or by the disinterested members of the Board; and |
| • | any employment relationship or transaction involving an executive officer and any related compensation must be approved by the Compensation Committee of the Board of Directors or recommended by the Compensation Committee for its approval. |
In connection with the Compensationreview and approval or ratification of a related person transaction:
| • | management must disclose to the Audit Committee or disinterested directors, as applicable, the name of the related person and the basis on which the person is a related person, the related person’s interest in the transaction, the material terms of the related person transaction, including the approximate dollar value of the amount involved in the transaction or, in the case of indebtedness, the amount of principal, the approximated dollar value of the related person’s interest in the transaction and any other material information regarding the related person or the transaction; |
| • | management must advise the Audit Committee or disinterested directors, as applicable, as to whether the related person transaction complies with the terms of our agreements governing our material outstanding indebtedness that limit or restrict our ability to enter into a related person transaction; |
| • | management must advise the Audit Committee or disinterested directors, as applicable, as to whether the related person transaction will be required to be disclosed in our applicable filings under the Securities Act or the |
ORMAT TECHNOLOGIES, INC. | 2024 PROXY STATEMENT 73
| Exchange Act, and related rules, and, to the extent required to be disclosed, management must ensure that the related person transaction is disclosed in accordance with such Acts and related rules; and |
| • | management must advise the Audit Committee or disinterested directors, as applicable, as to whether the related person transaction constitutes a “personal loan” for purposes of Section 402 of the Sarbanes-Oxley Act of 2002. |
In addition, the related person transaction policy provides that the Audit Committee value stockholder input on these mattersor disinterested directors, as applicable, in connection with any approval or ratification of a related person transaction involving a non-employee director or director nominee, should consider all relevant facts and will consider the results of this advisory vote, among other factors, in making future decisions about executive compensation for our named executive officers.
In consideration of this vote, we encourage you to review our proxy materials,circumstances, including, but not limited to:
to whether such transaction would compromise the director or director nominee’s status as an “independent” or “non-employee” director, as applicable, under the rules and regulations of the SEC and the NYSE.EQUITY COMPENSATION PLAN INFORMATION
The following table summarizes share and exercise price information about the Company’s equity compensation plans as of December 31, 2023:
| | | Number of
Securities to
be Issued Upon
Exercise of
Outstanding
Options, Warrants
and Rights(1) | | | Weighted-Average
Exercise Price
of Outstanding
Options, Warrants
and Rights(2) | | | Number of Securities
Remaining Available
for Future Issuance
Under Equity
Compensation
Plans(3) | |
| Equity Compensation plans approved by security holders | | | 1,516,634 | | | $ | 68.50 | | | | 3,313,670 | |
| Equity Compensation plans not approved by security holders | | | — | | | | — | | | | — | |
| Total | | | 1,516,634 | | | $ | 68.50 | | | | 3,313,670 | |
| (1) | Includes outstanding stock options, SARs, RSUs and PSUs issued pursuant to the 2012 Incentive Compensation Plan (the “2012 ICP”) and the 2018 ICP. Pursuant to SEC guidance, the number of unearned PSUs included is at the maximum payout level. |
| (2) | Since RSU and PSU awards have no exercise price, they are not included in the weighted-average exercise price calculation in this column. |
| (3) | Includes shares available for future grant under the 2018 ICP. Following approval of our 2018 ICP at the 2018 Annual Meeting of Stockholders, no further awards have been, or may be, granted under the 2012 ICP. |
ORMAT TECHNOLOGIES, INC. | 2024 PROXY STATEMENT 74
| Back to Contents | | ·the tables, narrative disclosures and other information set forth in the "Executive Compensation" section of this Proxy Statement, which describes how we have compensated our named executive officers; and |
| · | theSECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENTThe following table shows information set forth in the "Compensation Discussion and Analysis" section of this Proxy Statement, which describes our compensation objectives and the various elements of our compensation program and policies applicable to our named executive officers. |
We believe that our executive compensation program directly links executive compensation with
our performance and alignsrespect to the
interests of our executive officers with those of our stockholders. Our executive officers receive equity awards that are linked to appreciation in the pricebeneficial ownership of our Common Stock as
wellof March 14, 2024 for:| • | each person known to us to own beneficially 5% or more of our outstanding Common Stock; |
| • | each of our directors or director nominees; |
| • | each of our named executive officers; and |
| • | all of our directors, director nominees and executive officers as a group. |
As of March 14, 2024, there were 60,381,538 shares of our Common Stock outstanding. Except as an annual bonus basedindicated by footnote and subject to community property laws where applicable, to our knowledge, the persons named in the table below have sole voting and investment power with respect to all shares of Common Stock shown as beneficially owned by them.
The amounts and percentages of shares beneficially owned are reported on the basis of SEC regulations governing the determination of beneficial ownership of securities. Under SEC rules, a person is deemed to be a “beneficial owner” of a security if that person has or shares voting power or investment power, which includes the power to dispose of or to direct the disposition of such security. A person is also deemed to be a beneficial owner of any securities, including SARs and/or RSUs, of which that person has a right to acquire beneficial ownership (i) within 60 days, or (ii) in the case of directors or executive officers, upon termination of service other than for death, disability or involuntary termination. Securities that can be so acquired are deemed to be outstanding for purposes of computing such person’s ownership percentage, but not for purposes of computing any other person’s percentage. Under these rules, more than one person may be deemed to be a beneficial owner of the same securities and a person may be deemed to be a beneficial owner of securities as to which such person has no economic interest.
| Beneficial Owners of More than 5% | | Amount and Nature
of Beneficial
Ownership | | Percent of Common
Stock Outstanding |
| BLACKROCK, INC. | | | 8,847,797 | (1) | | | 14.7 | % |
| ORIX CORPORATION | | | 6,676,077 | (2) | | | 11.1 | % |
| THE VANGUARD GROUP | | | 5,324,598 | (3) | | | 8.8 | % |
| MIGDAL INSURANCE & FINANCIAL HOLDINGS LTD. | | | 3,566,159 | (4) | | | 5.9 | % |
| DIRECTORS, DIRECTOR NOMINEES AND NAMED EXECUTIVE OFFICERS | | | | | | | | |
| ISAAC ANGEL†† | | | 45,038 | (5) | | | * | |
| RAVIT BARNIV | | | — | | | | | |
| KARIN CORFEE†† | | | 2,908 | (6) | | | — | |
| DAVID GRANOT†† | | | 8,355 | (7) | | | * | |
| MIKE NIKKEL†† | | | — | | | | — | |
| MICHAL MAROM†† | | | 2,908 | (8) | | | — | |
| DAFNA SHARIR†† | | | 8,705 | (9) | | | * | |
| STANLEY B. STERN†† | | | 12,253 | (10) | | | * | |
| HIDETAKE TAKAHASHI†† | | | 1,893 | | | | * | |
| BYRON G. WONG†† | | | 16,362 | (11) | | | * | |
| DORON BLACHAR† | | | 63,282 | (12) | | | * | |
| ASSAF GINZBURG† | | | 49,843 | (13) | | | * | |
| SHIMON HATZIR† | | | 23,599 | (14) | | | * | |
| OFER BEN YOSEF† | | | 24,710 | (15) | | | * | |
| JESSICA WOELFEL†† | | | 20,579 | (16) | | | * | |
| DIRECTORS, DIRECTOR NOMINEES AND EXECUTIVE OFFICERS AS A GROUP (15 PERSONS) | | | 280,435 | (17) | | | * | |
| † | c/o Ormat Systems Ltd., Industrial Area, P.O. Box 68 Yavne 81100, Israel. |
| †† | c/o Ormat Technologies, Inc., 6140 Plumas St., Reno, Nevada 89519. |
| * | Represents beneficial ownership of less than 1% of the outstanding shares of Common Stock. |
| (1) | Based on Schedule 13G/A (Amendment No. 9) filed with the SEC on March 7, 2024 by BlackRock Inc. (“Blackrock”). Includes, as of February 29, 2024, 8,847,797 shares beneficially owned, consisting of 8,730,812 shares as to which BlackRock has sole voting power and 8,884,797 shares to which BlackRock has sole dispositive power. BlackRock’s address is 50 Hudson Yards, New York, NY 10001. |
ORMAT TECHNOLOGIES, INC. | 2024 PROXY STATEMENT 75
| (2) | Based on Schedule 13D/A (Amendment No. 4) filed with the SEC on November 29, 2022 by ORIX. ORIX’s address is World Trade Center Building SOUTH TOWER, 2-4-1 Hamamatsu-cho, Minato-ku, Tokyo, 105-5135, Japan. |
| (3) | Based on Schedule 13G/A (Amendment No. 8) filed with the SEC on February 13, 2024 by The Vanguard Group (“Vanguard”). Includes, as of December 29, 2023, 5,324,598 shares beneficially owned, consisting of 75,927 shares as to which Vanguard has shared voting power, 5,191,221 shares as to which Vanguard has sole dispositive power and 133,377 shares as to which Vanguard has shared dispositive power. Vanguard’s address is 100 Vanguard Blvd., Malvern, PA 19355. |
| (4) | Based on Schedule 13G filed with the SEC on January 31, 2024 by Migdal Insurance & Financial Holdings Ltd. (“Migdal”). Includes, as of December 31, 2023, (i) 3,566,159 shares held for members of the public through, among others, provident funds, mutual funds, pension funds and insurance policies, which are managed by direct and indirect subsidiaries of Reporting Person, each of which subsidiaries operates under independent management and makes independent voting and investment decisions, and (ii) 554,429 shares held by companies for the management of funds for joint investments in trusteeship, each of which operates under independent management and makes independent voting and investment decisions, and (iii) no shares beneficially held for their own account (Nostro account). Migdal’s address is 4 Efal Street, P.O. Box 3063, Petach Tikva 49512, Israel. |
| (5) | Includes 2,170 shares of Common Stock underlying RSUs. |
| (6) | Includes 1,447 shares of Common Stock underlying RSUs. |
| (7) | Includes 2,525 shares of Common Stock underlying SARs and 1,447 shares of Common Stock underlying RSUs. |
| (8) | Includes 1,447 shares of Common Stock underlying RSUs. |
| (9) | Includes 4,146 shares of Common Stock underlying SARs and 1,447 shares of Common Stock underlying RSUs. |
| (10) | Includes 4,146 shares of Common Stock underlying SARs and 1,447 shares of Common Stock underlying RSUs. |
| (11) | Includes 7,500 shares of Common Stock underlying options, 2,525 shares of Common Stock underlying SARs and 1,447 shares of Common Stock underlying RSUs. |
| (12) | Includes 2,252 shares of Common Stock underlying RSUs. |
| (13) | Includes 1,064 shares of Common Stock underlying RSUs. |
| (14) | Includes 876 shares of Common Stock underlying RSUs. |
| (15) | Includes 626 shares of Common Stock underlying RSUs. |
| (16) | Includes 1,601 shares of Common Stock underlying SARs and 563 shares of Common Stock underlying RSUs. |
| (17) | Includes, in the aggregate, 7,500 shares of Common Stock underlying options, 14,943 shares of Common Stock underlying SARs and 16,233 shares of Common Stock underlying RSUs, which are owned by all directors, director nominees and executive officers. |
DELINQUENT SECTION 16(A) REPORTS
Section 16(a) of the Exchange Act requires that our executive officers, directors and certain persons who beneficially own more than 10% of our Common Stock file with the SEC reports of ownership and changes in ownership of our Common Stock and other equity securities.
Based solely on a review of the copies of Forms 3, 4 and 5 filed with the SEC and on written representations from certain reporting persons, we believe that during Fiscal 2023, our directors, executive officers and ten-percent stockholders complied with all applicable Section 16(a) filing requirements on a timely basis, except for one Form 4 for Ms. Sharir filed on May 16, 2023 in order to report a grant of 1,447 RSUs on May 9, 2023.
ORMAT TECHNOLOGIES, INC. | 2024 PROXY STATEMENT 76
QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND VOTING
Why am I being provided with these materials?
We are providing this Proxy Statement to you in connection with the Board’s solicitation of proxies to be voted at our Annual Meeting to be held on May 8, 2024, and at any postponements or adjournments of the Annual Meeting. We have either (1) delivered to you a Notice and made these proxy materials available to you on the Internet or (2) delivered printed versions of these materials, including a proxy card, to you by mail.
How can I attend and vote at the Annual Meeting?
To be admitted to the Annual Meeting, go to https://web.lumiagm.com/251938693. In order to gain access, stockholders of record as of the Record Date of March 14, 2024 should click on “I have a login,” enter the control number found on your proxy card, voting instruction form or notice you previously received and enter the password “ormat2024” (the password is case sensitive).
If your shares are held in “street name” through a broker, bank or other nominee, to be admitted to the Annual Meeting, you may also need to obtain a legal proxy reflecting the number of factors, including specific resultsshares of Common Stock of the Company you held as of the Record Date, along with your name and email address, and a request for registration to American Stock Transfer & Trust Company, LLC: (1) by email to proxy@astfinancial.com; (2) by facsimile to (718)765-8730; or (3) by mail to American Stock Transfer & Trust Company, LLC, Attn: Proxy Tabulation Department, 6201 15th Avenue, Brooklyn, NY 11219. Requests for registration must be labeled as “Legal Proxy” and be received by American Stock Transfer & Trust Company, LLC no later than 5:00 p.m. Eastern Daylight Time on May 1, 2024.
Will I be able to participate in the online Annual Meeting on the same basis I would be able to participate in a live annual meeting?
The online meeting format for the Annual Meeting will enable full and equal participation by all our performance, such as revenue growth, profitability andstockholders from any place in the attainmentworld at little to no cost. We designed the format of specific strategic business goals. This performance-based compensation represents a significant portion of our executive officers' overall compensation.
Accordingly, we recommendthe online Annual Meeting to ensure that our stockholders
who attend our Annual Meeting will be afforded the same rights and opportunities to participate as they would at an in-person meeting and to enhance stockholder access, participation and communication through online tools. We will be providing stockholders with the ability to submit appropriate questions real-time via the meeting website https://web.lumiagm.com/251938693. We are limiting questions to one per stockholder unless time otherwise permits. We will be answering as many questions submitted in accordance with the meeting rules of conduct as possible in the time allotted for the meeting.How do I vote uponmy shares without attending the following resolutionAnnual Meeting?
If you are a stockholder of record, you may vote by granting a proxy. Specifically, you may vote:
| • | By Internet - You may submit your proxy by going to www.voteproxy.com and follow the on-screen instructions or scan the QR code on your Notice or proxy card with your smartphone. You will need the Notice or proxy card in order to vote by Internet. |
| • | By Telephone - You may submit your proxy by using a touch-tone telephone to call toll-free +1 (800) 776-9437 in the United States or +1 (718) 921-8500 from foreign countries and following the instructions. You will need the Notice or proxy card in order to vote by telephone. |
| • | By Mail - You may vote by mail by requesting a proxy card from us, indicating your vote by completing, signing and dating the card where indicated and by mailing or otherwise returning the card in the envelope that will be provided to you. You should sign your name exactly as it appears on the proxy card. If you are signing in a representative capacity, indicate your name and title or capacity. |
If you hold your shares in street name, you may vote by submitting voting instructions to your bank, broker or other nominee. In most instances, you will be able to do this on the Internet, by telephone or by mail as indicated above. Please refer to information from your bank, broker or other nominee on how to submit voting instructions.
Internet and telephone voting facilities will close at 11:59 p.m. (Eastern Daylight Time) on May 7, 2024 for the voting of shares held by stockholders of record or held in street name.
Mailed proxy cards with respect to shares held of record or in street name must be received no later than May 7, 2024.
What am I voting on at the meeting:Annual Meeting?
At the Annual Meeting, there are five proposals scheduled to be voted on:
| • | Proposal 1: elect the nine director nominees listed in this Proxy Statement (the “Nominee Proposal”); |
| • | Proposal 2: ratify the appointment of PwC as our independent registered public accounting firm for 2023 (the “Ratification Proposal”); |
| • | Proposal 3: approve the compensation of our NEOs on an advisory basis (the “Say-on-Pay Proposal”); |
ORMAT TECHNOLOGIES, INC. | 2024 PROXY STATEMENT 77
"RESOLVED,| • | Proposal 4: approve an amendment to the Company’s fourth amended and restated certificate of incorporation to limit the liability of certain officers (the “Charter Amendment Proposal”); and |
| • | Proposal 5: approve the amendment and restatement of the 2018 ICP to increase the total number of shares reserved thereunder (the “2018 ICP Restatement Proposal”). |
Members of our management team and a representative of PwC will be present at the Annual Meeting to respond to appropriate questions from stockholders.
Who is entitled to vote?
Only stockholders of record at the close of business on the Record Date may vote at the Annual Meeting. The only class of stock entitled to vote at the Annual Meeting is Ormat’s Common Stock. Each holder of Common Stock is entitled to one vote for each share of Common Stock held by such holder. On the Record Date, there were 60,381,538 shares of Common Stock outstanding and entitled to vote at the Annual Meeting.
What is the difference between being a “record holder” and holding shares in “street name”?
A record holder holds shares in his, her or its name. Shares held in “street name” are shares that are held in the name of a bank or broker on a person’s or entity’s behalf.
Am I entitled to vote if my shares are held in “street name”?
If your shares are held in street name, the Notice will be forwarded to you by your bank or brokerage firm, along with a voting instruction card. You may vote by directing your bank or brokerage firm how to vote your shares. In most instances, you will be able to do this over the Internet, by telephone, or by mail as indicated below.
Under the rules of the NYSE, if you do not give instructions to your bank or brokerage firm, it may vote on matters that the compensation paidNYSE determines to be “routine”, but will not be permitted to vote your shares with respect to “non-routine” items. Under the Company's named executive officers,NYSE rules, the Ratification Proposal is a routine matter, but the Nominee Proposal, Say-on-Pay Proposal, Charter Amendment Proposal and 2018 ICP Restatement Proposal are not considered to be routine matters, so the broker or bank cannot vote your shares on the Nominee Proposal, Say-on-Pay Proposal, Charter Amendment Proposal and 2018 ICP Restatement Proposal unless you provide voting instructions for each of these matters. If you do not provide voting instructions on a “non-routine” matter, your shares will not be voted on that matter, which is referred to as disclosed pursuanta “broker non-vote.” “Broker non-votes” will have no impact on the outcome of the Nominee Proposal, the Say-on-Pay Proposal or the 2018 ICP Restatement Proposal, but will have the same effect as a vote against the Charter Proposal and will count toward a quorum at the Annual Meeting. For more information, see “—How many shares must be present to Item 402hold the Annual Meeting?”
As a street name holder, you may not vote your shares at the Annual Meeting unless you obtain a proxy form from your broker or bank to use at the Annual Meeting.
How many shares must be present to hold the Annual Meeting?
In order for us to conduct the Annual Meeting, the holders of Regulation S-Ka majority of the shares of Common Stock outstanding on the Record Date represented in person or by proxy shall constitute a quorum at the Annual Meeting. Abstentions and “broker non-votes” are counted as present and entitled to vote for purposes of determining a quorum.
What does it mean if I receive more than one Notice or proxy card at the same time?
It generally means you hold shares in more than one brokerage account. To ensure that all of your shares are voted, please sign and return each proxy card, or, if you vote by Internet or telephone, vote once for each Notice or proxy card you receive.
Can I change my vote after I submit my proxy?
Yes. Whether you have voted by Internet, telephone or mail, if you are a record holder of shares, you may revoke your proxy or change your vote at any time before it is actually voted:
| • | by signing and delivering another proxy with a later date that is received no later than May 7, 2024; |
| • | by voting again by Internet or telephone at a later time before the closing of those voting facilities at 11:59 p.m. (Eastern Daylight Time) on May 7, 2024; |
| • | by sending a written statement to that effect to the Company’s Corporate Secretary, provided that such statement is received no later than May 7, 2024; or |
| • | by voting via the Internet at the Annual Meeting. |
Please note, however, that if you are a beneficial owner of shares and you wish to revoke your proxy or vote at the Annual Meeting, you must follow the instructions provided to you by your bank, broker or other record holder and/or obtain from the record holder a proxy issued in your name. Your attendance via the Internet at the Annual Meeting will not, by itself, revoke your proxy.
What will be the result if I submit my executed proxy card without making specific instructions?
If you are the record holder of shares and properly submit an executed proxy card without making specific instructions, your shares will be voted in the manner recommended by our Board of Directors as follows: “FOR” each of the nine director nominees (the Nominee Proposal); “FOR” the ratification of the appointment of our independent
ORMAT TECHNOLOGIES, INC. | 2024 PROXY STATEMENT 78
registered public accounting firm (the Ratification Proposal); “FOR” the approval of an amendment to our certificate of incorporation (the Charter Proposal); and “FOR” the approval of the amendment and restatement of the 2018 ICP (the 2018 ICP Restatement Proposal). If any other matters not included in this Proxy Statement properly come before the meeting, the shares represented by the proxy will be voted by the holders of the proxies in accordance with their best judgment to the section titled "Executive Compensation", includingextent permitted by Rule 14a-4(c) under the Compensation DiscussionExchange Act. The proxy may be removed at any time prior to exercise by the means discussed above in “—Can I change my vote after I submit my proxy?”
Who will count the votes?
Ormat’s transfer agent, American Stock Transfer & Trust Company, will tabulate and Analysis,certify the compensation tables,votes. A representative of the narrative disclosures andtransfer agent may serve as an inspector of election.
Will any other information set forth in in this section, is hereby APPROVED."
OUR BOARD RECOMMENDS THAT YOU VOTE "FOR" THE APPROVAL, ON AN ADVISORY BASIS, OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS AS DISCLOSED IN THIS PROXY STATEMENT PURSUANT TO ITEM 402 OF REGULATION S-K.
business be conducted at the Annual Meeting?We know of no other business that will be presented at the meeting.Annual Meeting. If any other matter properly comes before the stockholders for a vote at the meeting,Annual Meeting, however, the proxy holders will vote your shares in accordance with their best judgment.
Who will pay for the cost of this proxy solicitation?
We will pay the cost of soliciting proxies. Proxies may be solicited on our behalf by directors, officers or employees (for no additional compensation) in person or by telephone, electronic transmission and facsimile transmission. Brokers and other nominees will be requested to solicit proxies or authorizations from beneficial owners and will be reimbursed for their reasonable expenses. The Company has also retained Morrow Sodali to assist with the solicitation of proxies for a fee of $7,500, plus reimbursement for out-of-pocket expenses.
Is there a list of stockholders entitled to vote at the Annual Meeting?
The list will be available for 10 days prior to the Annual Meeting, between the hours of 9:00 a.m. and 4:30 p.m. (Pacific Time), at our principal executive offices at 6140 Plumas St., Reno, Nevada 89519, by contacting the Corporate Secretary at (775) 356-9029.
What am I voting on, how many votes are required to approve each item, how are votes counted and how does the Board recommend I vote?
The table below summarizes the proposals that will be voted on, the vote required to approve each item, how votes are counted and how the Board recommends you vote:
| Proposal | | Vote Required | | Voting
Options | | Board
Recommendation | | Broker
Discretionary
Voting
Allowed | | Impact of
Abstain Vote |
| Proposal 1 – Nominee Proposal | | Majority of votes cast – “FOR” must exceed “AGAINST” votes | | “FOR”
“AGAINST”
“ABSTAIN” | | “FOR” | | No | | None |
| Proposal 2 – Say-on-Pay Proposal | | Majority of votes present in person or represented by proxy and entitled to vote on this item of business | | “FOR”
“AGAINST”
“ABSTAIN” | | “FOR” | | No | | “AGAINST” |
| Proposal 3 – Ratification Proposal | | Majority of votes present in person or represented by proxy and entitled to vote on this item of business | | “FOR”
“AGAINST”
“ABSTAIN” | | “FOR” | | Yes | | “AGAINST” |
| Proposal 4 – Charter Proposal | | Majority of the outstanding shares of stock entitled to vote on this item of business | | “FOR”
“AGAINST”
“ABSTAIN” | | “FOR” | | No | | “AGAINST” |
| Proposal 5 – Restated 2018 ICP Proposal | | Majority of votes present in person or represented by proxy and entitled to vote on this item of business | | “FOR”
“AGAINST”
“ABSTAIN” | | “FOR” | | No | | “AGAINST” |
ORMAT TECHNOLOGIES, INC. | 2024 PROXY STATEMENT 79
OTHER MATTERS
We know of no other business that will be presented at the Annual Meeting. If any other matter properly comes before the stockholders for a vote at the Annual Meeting, however, the proxy holders will vote your shares in accordance with their best judgment. This discretionary authority is granted by the execution of the form of proxy.
ADDITIONALOTHER INFORMATION
HOUSEHOLDING OF PROXIES
Under rules adopted by the SEC, we are permitted to deliver a single Notice of Internet Availability of Proxy Materials to any household at which two or more stockholders reside if we believe the stockholders are members of the same family. This process, called householding, allows us to reduce the number of copies of these materials we must print and mail. Even if householding is used, each stockholder will continue to be entitled to submit a separate proxy or voting instructions.
The Company is not householding this year for those stockholders who own their shares directly in their own name. If you share the same last name and address with another Company stockholder who also holds his or her shares directly, and you would each like to start householding for the Company'sCompany’s annual reports and proxy materials, please contact us at Ormat Technologies, Inc., 6225 Neil Road,6140 Plumas St., Reno, Nevada 89511,89519, Attention: Corporate Secretary telephoneor (775) 356-9029.
This year, some brokers and nominees who hold Company shares on behalf of stockholders may be participating in the practice of householding proxy statements and annual reports for those stockholders. If your household receives a single Notice of Internet Availability of Proxy Materials for this year, but you would like to receive your own copy, please contact us as stated above, and we will promptly send you a copy. If a broker or nominee holds Company shares on your behalf and you share the same last name and address with another stockholder for whom a broker or nominee holds Company shares, and together both of you would like to receive only a single set of the Company’s disclosure documents, please contact your broker or nominee as described in the voter instruction card or other information you received from your broker or nominee.
If you consent to householding, your election will remain in effect until you revoke it. Should you later revoke your consent, you will be sent separate copies of those documents that are mailed at least 30 days or more after receipt of your revocation.
ADDITIONAL FILINGS
The Company’s reports on Forms 10-K, 10-Q, and 8-K and all amendments to those reports are available without charge through the Company’s website, www.ormat.com,, as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC. Our Code of Business Conduct and Ethics, Code of Ethics Applicable to Senior Executives, Clawback Policy, Audit Committee Charter, Corporate Governance Guidelines, Nominating and Corporate Governance Committee Charter, Compensation Committee Charter, Insider Trading Policy,Investment Committee Charter, and ESG Charter and amendments thereto are also available at our website, as described above. If we make any amendments to our Code of Business Conduct and Ethics or Code of Ethics Applicable to Senior Executives or grant any waiver, including any implicit waiver, from a provision of either code applicable to our CEO, CFO or principal accounting officer requiring disclosure under applicable SEC rules, we intend to disclose the nature of such amendment or waiver on our website. The content of our website, however, is not part of this proxy statement.
You may request a copy of our SEC filings, as well as the foregoing corporate documents, at no cost to you, by writing to the Company address appearing in this proxy statementProxy Statement or by calling us at (775) 356-9029.
Ormat will bear the entire cost of this proxy solicitation. In addition to soliciting proxies, we expect that our directors, officers and management employees may solicit proxies personally or by mail, facsimile, telephone, or other electronic means, for which solicitation they will not receive any additional compensation. We will reimburse brokerage firms, custodians, fiduciaries and other nominees for their out-of-pocket expenses in forwarding solicitation materials to beneficial owners upon our request.
Section 16(a) Beneficial Ownership Reporting Compliance Section 16(a) of the Exchange Act requires our officers and directors, and persons who beneficially own more than 10% of a registered classANNUAL REPORT TO STOCKHOLDERS
Additional copies of our equity securities,Annual Report to file reportsStockholders for the fiscal year ended December 31, 2023 and copies of ownership and changes in ownershipour annual report on Form 10-K for the fiscal year ended December 31, 2023 as filed with the SEC. Officers, directors and greater-than-10% beneficial ownersSEC are required by SEC regulationsavailable to furnish us with copies of all reports they file pursuantstockholders without charge upon written request addressed to Section 16(a).Ormat Technologies, Inc., Attention: Investor Relations, 6140 Plumas St., Reno, Nevada 89519.
ORMAT TECHNOLOGIES, INC. | 2024 PROXY STATEMENT 80
We believe, based upon a review of the forms filed and written confirmation provided by our officers, directors, and greater-than-10% beneficial owners, that during 2017 all of our officers, directors, and greater-than-10% beneficial owners filed on a timely basis the reports required by Section 16(a) of the Exchange Act, except for one report reporting two transactions that was filed late by one of our executive officers as a result of a clerical error.
Stockholder Proposals for 2019 Annual Meeting of StockholdersSTOCKHOLDER PROPOSALS FOR 2025 ANNUAL MEETING OF STOCKHOLDERS
Stockholders of the Company may submit proposals that they believe should be voted upon at the Company’s annual meeting of Stockholdersstockholders or nominate persons for election to the Board. Pursuant to Rule 14a-8 under the Exchange Act, stockholder proposals meeting certain requirements may be eligible for inclusion in the Company'sCompany’s proxy statement for the Company's 2019Company’s 2025 Annual Meeting of Stockholders. To be eligible for inclusion in the Company’s 20192025 proxy statement, any such stockholder proposals must be submitted in writing to the Secretary of the Company and must be received no later than November 28, 2018,27, 2024, in addition to complying with certain rules and regulations promulgated by the SEC. The submission of a stockholder proposal does not guarantee that it will be included in the Company’s proxy statement.
Alternatively, stockholders seeking to present a stockholder proposal or nomination at the Company’s 20192025 Annual Meeting of Stockholders, without having it included in the Company’s proxy statement, must timely submit notice of such proposal or nomination.nomination and provide the information and satisfy the other requirements set forth in the bylaws. To be timely, a stockholder’s notice shall be delivered to the Corporate Secretary at the principal offices of the Company not later than the close of business on the 90th 90th day nor earlier than the close of business on the 120th 120th day prior to the first anniversary of the 20182024 Annual Meeting of Stockholders, unless the date of the 20182025 Annual Meeting of Stockholders is advanced by more than 30 days or delayed (other than as a result of adjournment) by more than 60 days from the anniversary of the 20172024 Annual Meeting of Stockholders. For the Company’s 20192025 Annual Meeting of Stockholders, this means that any such proposal or nomination must be submitteddelivered no earlier than January 7, 20198, 2025 and no later than February 6, 2019.7, 2025. If the date of the 20182025 Annual Meeting of Stockholders is advanced by more than 30 days or delayed (other than as a result of adjournment) by more than 60 days from the anniversary of the 20172024 Annual Meeting of Stockholders, the stockholder must submitdeliver any such proposal or nomination no earlier than the close of business on the 120th 120th day prior to the 20192025 Annual Meeting of Stockholders and not later than the close of business on the later of the 90th 90th day prior to the 20192025 Annual Meeting of Stockholders, or if the first public announcement of the date of the 20192025 Annual Meeting of Stockholders is less than 100 days prior to the date of such annual meeting, the 10th 10th day following the day on which the public announcement of the date of such meeting is first made.
The notice must contain the information required by our bylaws, and the stockholder(s) must comply with the information and other requirements in our bylaws. Additionally, in order for stockholders to give timely notice of nominations for directors for inclusion on a universal proxy card in connection with the 2025 Annual Meeting of Stockholders, notice must be submitted by the same deadline as disclosed above under the advance notice provisions of our Bylaws and must include the information in the notice required by our bylaws and by Rule 14a-19(b) (2) and Rule 14a-19(b)(3) under the Exchange Act (including a statement that the stockholder intends to solicit the holders of shares representing at least 67% of the voting power of shares entitled to vote on the election of directors in support of director nominees other than our nominees).Notices of any proposals or nominations for the Company’s 20182025 Annual Meeting of Stockholders should be sent to Ormat Technologies, Inc., Corporate Secretary, 6225 Neil Road,6140 Plumas St., Reno, Nevada 89511.
Appendix A
89519.ORMAT TECHNOLOGIES, INC.| 2024 PROXY STATEMENT 81
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This proxy statement contains statements relating to current expectations, estimates, forecasts and projections about future events, including ESG-related targets, that are “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, included in this proxy statement that address activities, events or developments that we expect or anticipate will or may occur in the future, including such matters as our projections of annual revenues, expenses and debt service coverage with respect to our debt securities, future capital expenditures, business strategy, competitive strengths, goals, development or operation of generation assets, market and industry developments and the growth of our business and operations, as well as goals related to ESG initiatives, are forward-looking statements. When used in this proxy statement, the words “may”, “will”, “could”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “projects”, “potential”, “target”, “goal”, or “contemplate” or the negative of these terms or other comparable terminology are intended to identify forward-looking statements, although not all forward-looking statements contain such words or expressions. These forward-looking statements generally relate to Ormat’s plans, objectives and expectations for future operations and are based upon its management’s current estimates and projections of future results or trends.
Although we believe that our plans and objectives reflected in or suggested by these forward-looking statements are reasonable, we may not achieve these plans or objectives. Actual future results may differ materially from those projected as a result of certain risks and uncertainties, including our assumptions not being realized, our ability to execute our strategies in the time frame expected or at all, changing government regulations, scientific or technological developments, climate-related conditions and weather events, our ability to gather and verify data regarding environmental impacts, the compliance of various third parties with our policies and procedures, and our expansion into new products, services, and geographic regions, as well as the risks, uncertainties and other factors described under “Risk Factors” in Ormat’s annual report on Form 10-K filed with the SEC on February 23, 2024 and in Ormat’s annual reports on Form 10-K and quarterly reports on Form 10-Q that are filed from time to time with the SEC.
The inclusion of information in this proxy statement should not be construed as a characterization regarding the materiality or financial impact of that information. Moreover, this proxy statement may use certain terms, including those that GRI Standards, SASB or TFCD or others may refer to as “material,” to reflect the issues or priorities of Ormat and its stakeholders. Used in this context, however, these terms are distinct from, and should not be confused with, the terms “material” and “materiality” as defined by or construed in accordance with securities, or other, laws or as used in the context of financial statements and reporting.
These forward-looking statements are made only as of the date hereof, and, except as legally required, we undertake no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.
ORMAT TECHNOLOGIES, INC. | 2024 PROXY STATEMENT 82
APPENDIX A
FIFTH AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF ORMAT TECHNOLOGIES, INC.
Pursuant to Sections 242 and 245 of the General Corporation Law of the State of Delaware
Ormat Technologies, Inc., a corporation organized and existing under the General Corporation Law of the State of Delaware (the “Corporation”), does hereby certify as follows:
FIRST: The name of the Corporation is Ormat Technologies, Inc.
SECOND: The original Certificate of Incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on September 15, 1994.
THIRD: The First Amended and Restated Certificate of Incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on June 30, 2004.
FOURTH: The Second Amended and Restated Certificate of Incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on October 21, 2004.
FIFTH: The Third Amended and Restated Certificate of Incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on May 22, 2017.
SIXTH: The Fourth Amended and Restated Certificate of Incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on November 6, 2019.
SIXTHSEVENTH: The ThirdFourth Amended and Restated Certificate of Incorporation of the Corporation is hereby amended in its entirety and restated and integrated into a single instrument to read in full as set forth in the FourthFifth Amended and Restated Certificate of Incorporation of the Corporation attached hereto as Exhibit A and made a part hereof.
SEVENTHEIGHTH: The FourthFifth Amended and Restated Certificate of Incorporation of the Corporation was proposed by the Board of Directors of the Corporation and was duly adopted by the stockholders of the Corporation in accordance with the provisions of Sections 242 and 245 of the General Corporation Law of the State of Delaware and the ThirdFourth Amended and Restated Certificate of Incorporation of the Corporation.
IN WITNESS WHEREOF, this FourthFifth Amended and Restated Certificate of Incorporation has been executed by a duly authorized officer of this Corporation on this ___ day of ___________, 2024.
| ORMAT TECHNOLOGIES, INC. |
| |
| Name: Jessica Woelfel
Title: General Counsel, Chief Compliance Officer, and Corporate Secretary |
ORMAT TECHNOLOGIES, INC. | 2024 PROXY STATEMENT 83
Exhibit A
FOURTH FIFTH AMENDED AND RESTATED CERTIFICATE OF
INCORPORATION OF ORMAT TECHNOLOGIES, INC.
FIRST: The name of the Corporation is Ormat Technologies, Inc.
SECOND: The Corporation’s registered office in the State of Delaware is located at 614 N. Dupont Highway, Suite 210, in the City of Dover, 19901, County of Kent. The name of its registered agent at such address is TRAC - The Registered Agent Company.
THIRD: The nature of the business, or objects or purposes to be transacted, promoted or carried on, are: To engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware.
FOURTH: The total number of shares of all classes of stock which the Corporation shall have the authority to issue is Two Hundred Five Million (205,000,000), of which (i) Two Hundred Million (200,000,000) shares of par value of $.001 each are to be of a class designated Common Stock (the “Common Stock”) and (ii) Five Million (5,000,000) shares of par value of $.001 are to be of a class designated Preferred Stock (the “Preferred Stock”).
Simultaneously with the effective date of the filing of the Second Amended and Restated Certificate of Incorporation of the Corporation (the “Second Amended and Restated Certificate of Incorporation”), (i) each share of common stock, par value $.001 per share, of the Corporation issued and outstanding or authorized and unissued immediately prior to the effective date of the filing of the Second Amended and Restated Certificate of Incorporation (the “Old Common Stock”) was automatically reclassified and continued (the “Reverse Stock Split”), without any action on the part of the holder thereof, as one over one point three two five four four four (1/1.325444) of one share of Common Stock, equivalent to zero point seven five four four six four one six (0.75446416) share of Common Stock; (ii) the remaining par value of Forty Nine Thousand One Hundred and Seven and 17/100 Dollars ($49,107.17) was classified as excess capital; (iii) each certificate outstanding and previously representing shares of Old Common Stock were, until surrendered and exchanged, for all corporate purposes, deemed to constitute and represent the number of whole shares of Common Stock of the Corporation into which the outstanding shares of Old Common Stock previously represented by such certificate were converted by virtue of the Reverse Stock Split.
Effective immediately upon the consummation of the Reverse Stock Split, the authorized number of shares of Common Stock was increased, from One Hundred Fifty Million Eight Hundred Ninety Two Thousand Eight Hundred and Twenty Eight (150,892,828) shares to Two Hundred Million (200,000,000) shares.
In this Article Fourth, any reference to a section or paragraph, without further attribution, within a provision relating to a particular class of stock is intended to refer solely to the specified section or paragraph of the provisions relating to the same class of stock.
COMMON STOCK
The Common Stock shall have the following voting powers, designations, preferences and relative, participating, optional and other special rights, and qualifications, limitations or restrictions thereof:
| 1. | Dividends. Whenever the full dividends upon any outstanding Preferred Stock for all past dividend periods shall have been paid and the full dividends thereon for the then current respective dividend periods shall have been paid, or declared and a sum sufficient for the respective payments thereof set apart, the holders of shares of the Common Stock shall be entitled to receive such dividends and distributions in equal amounts per share, payable in cash or otherwise, as may be declared thereon by the Board of Directors from time to time out of assets or funds of the Corporation legally available therefor. |
| 2. | Rights on Liquidation. In the event of any liquidation, dissolution or winding-up of the Corporation, whether voluntary or involuntary, after the payment or setting apart for payment to the holders of any outstanding Preferred Stock of the full preferential amounts to which such holders are entitled as herein provided or referred to, all of the remaining assets of the Corporation shall belong to and be distributable in equal amounts per share to the holders of the Common Stock. For purposes of this paragraph 2, a consolidation or merger of the Corporation with any other corporation, or the sale, transfer or lease of all or substantially all its assets shall not constitute or be deemed a liquidation, dissolution or winding-up of the Corporation. |
| 3. | Voting. Except as otherwise provided by the laws of the State of Delaware or by this Article Fourth, each share of Common Stock shall entitle the holder thereof to one vote. |
ORMAT TECHNOLOGIES, INC. | 2024 PROXY STATEMENT 84
PREFERRED STOCK
The Preferred Stock may be issued from time to time in one or more series. The Board of Directors is hereby authorized to provide for the issuance of shares of Preferred Stock in series and, by filing a certificate pursuant to the applicable law of the State of Delaware (hereinafter referred to as a “Preferred Stock Designation”), to establish from time to time the number of shares to be included in each such series, and to fix the designation, powers, preferences and rights of the shares of each such series and the qualifications, limitations and restrictions thereof. The authority of the Board of Directors with respect to each series shall include, but not be limited to, determination of the following:
| (a) | the designation of the series, which may be by distinguishing number, letter or title; |
| (b) | the number of shares of the series, which number the Board of Directors may thereafter (except where otherwise provided in the Preferred Stock Designation) increase or decrease (but not below the number of shares thereof then outstanding); |
| (c) | whether dividends, if any, shall be cumulative or noncumulative and the dividend rate of the series; |
| (d) | the dates at which dividends, if any, shall be payable; |
| (e) | the redemption rights and price or prices, if any, for shares of the series; |
| (f) | the terms and amount of any sinking fund provided for the purchase or redemption of shares of the series; |
| (g) | the amounts payable on shares of the series in the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation; |
| (h) | whether the shares of the series shall be convertible into shares of any other class or series, or any other security, of the Corporation or any other corporation, and, if so, the specification of such other class or series or such other security, the conversion price or prices or rate or rates, any adjustments thereof, the date or dates as of which such shares shall be convertible and all other terms and conditions upon which such conversion may be made; |
| (i) | restrictions on the issuance of shares of the same series or of any other class or series; and |
| (j) | the voting rights, if any, of the holders of shares of the series. |
Except as may be provided in this Fourth Fifth Amended and Restated Certificate of Incorporation or in a Preferred Stock Designation, the Common Stock shall have the exclusive right to vote for the election of directors and for all other purposes, and holders of Preferred Stock shall not be entitled to receive notice of any meeting of stockholders at which they are not entitled to vote. Notwithstanding the foregoing, the holders of Preferred Stock that shall have the right to vote for the election of directors as provided herein, in any other Preferred Stock Designation, or by law shall vote together with the holders of shares of Common Stock and any other capital stock of the Corporation entitled to vote generally, as a single class, on all matters relating to the election of directors. The number of authorized shares of Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the outstanding Common Stock, without a vote of the holders of the Preferred Stock, or of any series thereof, unless a vote of any such holders is required pursuant to any Preferred Stock Designation.
The Corporation shall be entitled to treat the person in whose name any share of its stock is registered as the owner thereof for all purposes and shall not be bound to recognize any equitable or other claim to, or interest in, such share on the part of any other person, whether or not the Corporation shall have notice thereof, except as expressly provided by applicable law.
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
| 1. | Designation and Amount. A series of Preferred Stock of par value $.001 per share is hereby created and shall be designated as “Series A Junior Participating Preferred Stock” (the “Series A Preferred Stock”) and the number of shares constituting the Series A Preferred Stock shall be Five Hundred Thousand (500,000). Such number of shares may be increased or decreased by resolution of the Board of Directors; provided, that no decrease shall reduce the number of shares of Series A Preferred Stock to a number less than the number of shares then outstanding plus the number of shares reserved for issuance upon the exercise of outstanding options, rights or warrants or upon the conversion of any outstanding securities issued by the Corporation convertible into Series A Preferred Stock. |
| 2. | Dividends and Distributions. |
| | 2.1 | Subject to the rights of the holders of any shares of any series of Preferred Stock (or any similar stock) ranking prior and superior to the Series A Preferred Stock with respect to dividends, the holders of shares of Series A Preferred Stock, in preference to the holders of Common Stock and of any other junior stock of the Corporation, shall be entitled to receive, when, as and if declared by the Board of Directors out of funds legally available for the purpose, quarterly dividends payable in cash on the second Monday of March, June, September and December in each year (each such date being referred to herein as a “Quarterly Dividend Payment Date”), commencing on the first Quarterly Dividend Payment Date after the first issuance of a share or fraction of a share of Series A Preferred Stock, in an amount per share (rounded to the nearest cent) equal to the greater of (a) $1 or (b) |
ORMAT TECHNOLOGIES, INC. | 2024 PROXY STATEMENT 85
| | | subject to the provision for adjustment hereinafter set forth, 100 times the aggregate per share amount of all cash dividends, and 100 times the aggregate per share amount (payable in kind) of all non-cash dividends or other distributions, other than a dividend payable in shares of Common Stock or a subdivision of the outstanding shares of Common Stock (by reclassification or otherwise), declared on the Common Stock since the immediately preceding Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of any share or fraction of a share of Series A Preferred Stock. In the event the Corporation shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the amount to which holders of shares of Series A Preferred Stock were entitled immediately prior to such event under clause (b) of the preceding sentence shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. |
| | 2.2 | The Corporation shall declare a dividend or distribution on the Series A Preferred Stock as provided in paragraph 2.1 immediately after it declares a dividend or distribution on the Common Stock (other than a dividend payable in shares of Common Stock); provided that, in the event no dividend or distribution shall have been declared on the Common Stock during the period between any Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date, a dividend of $1 per share on the Series A Preferred Stock shall nevertheless be payable on such subsequent Quarterly Dividend Payment Date. |
| | 2.3 | Dividends shall begin to accrue and be cumulative on outstanding shares of Series A Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of issue of such shares, unless the date of issue of such shares is prior to the record date for the first Quarterly Dividend Payment Date, in which case dividends on such shares shall begin to accrue from the date of issue of such shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a date after the record date for the determination of holders of shares of Series A Preferred Stock entitled to receive a quarterly dividend and before such Quarterly Dividend Payment Date, in either of which events such dividends shall begin to accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on the shares of Series A Preferred Stock in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a share-by-share basis among all such shares at the time outstanding. The Board of Directors may fix a record date for the determination of holders of shares of Series A Preferred Stock entitled to receive payment of a dividend or distribution declared thereon, which record date shall be not more than 60 days prior to the date fixed for the payment thereof. |
| 3. | Voting Rights. The holders of shares of Series A Preferred Stock shall have the following voting rights: |
| | 3.1 | Subject to the provision for adjustment hereinafter set forth, each share of Series A Preferred Stock shall entitle the holder thereof to 100 votes on all matters submitted to a vote of the stockholders of the Corporation. In the event the Corporation shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the number of votes per share to which holders of shares of Series A Preferred Stock were entitled immediately prior to such event shall be adjusted by multiplying such number by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. |
| | 3.2 | Except as otherwise provided herein, in any other Preferred Stock Designation creating a series of Preferred Stock or any similar stock, or by law, the holders of shares of Series A Preferred Stock and the holders of shares of Common Stock and any other capital stock of the Corporation having general voting rights shall vote together as one class on all matters submitted to a vote of stockholders of the Corporation. |
| | 3.3 | Except as set forth herein, or as otherwise provided by law, holders of Series A Preferred Stock shall have no special voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for taking any corporate action. |
| | 4.1 | Whenever quarterly dividends or other dividends or distributions payable on the Series A Preferred Stock as provided in paragraph 2 are in arrears, thereafter and until all accrued and unpaid dividends and distributions, whether or not declared, on shares of Series A Preferred Stock outstanding shall have been paid in full, the Corporation shall not: |
| | | (a) | declare or pay dividends, or make any other distributions, on any shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Preferred Stock; |
ORMAT TECHNOLOGIES, INC. | 2024 PROXY STATEMENT 86
| | (b) | declare or pay dividends, or make any other distributions, on any shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series A Preferred Stock, except dividends paid ratably on the Series A Preferred Stock and all such parity stock on which dividends are payable or in arrears in proportion to the total amounts to which the holders of all such shares are then entitled; |
| | (c) | redeem or purchase or otherwise acquire for consideration shares of any stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Preferred Stock, provided that the Corporation may at any time redeem, purchase or otherwise acquire shares of any such junior stock in exchange for shares of any stock of the Corporation ranking junior (either as to dividends or upon dissolution, liquidation or winding up) to the Series A Preferred Stock; or |
| | (d) | redeem or purchase or otherwise acquire for consideration any shares of Series A Preferred Stock, or any shares of stock ranking on a parity with the Series A Preferred Stock, except in accordance with a purchase offer made in writing or by publication (as determined by the Board of Directors) to all holders of such shares upon such terms as the Board of Directors, after consideration of the respective annual dividend rates and other relative rights and preferences of the respective series and classes, shall determine in good faith will result in fair and equitable treatment among the respective series or classes. |
| 4.2 | The Corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for consideration any shares of stock of the Corporation unless the Corporation could, under subparagraph (c) of paragraph 4.1, purchase or otherwise acquire such shares at such time and in such manner. |
| 5. | Reacquired Shares. Any shares of Series A Preferred Stock purchased or otherwise acquired by the Corporation in any manner whatsoever shall be retired and cancelled promptly after the acquisition thereof. All such shares shall upon their cancellation become authorized but unissued shares of Preferred Stock and may be reissued as part of a new series of Preferred Stock subject to the conditions and restrictions on issuance set forth herein or in any other Preferred Stock Designation creating a series of Preferred Stock or any similar stock or as otherwise required by law. |
| 6. | Liquidation, Dissolution or Winding Up. Upon any liquidation, dissolution or winding up of the Corporation, no distribution shall be made (i) to the holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Preferred Stock unless, prior thereto, the holders of shares of Series A Preferred Stock shall have received $100 per share, plus an amount equal to accrued and unpaid dividends and distributions thereon, whether or not declared, to the date of such payment, provided that the holders of shares of Series A Preferred Stock shall be entitled to receive an aggregate amount per share, subject to the provision for adjustment hereinafter set forth, equal to 100 times the aggregate amount to be distributed per share to holders of shares of Common Stock, or (ii) to the holders of shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series A Preferred Stock, except distributions made ratably on the Series A Preferred Stock and all such parity stock in proportion to the total amounts to which the holders of all such shares are entitled upon such liquidation, dissolution or winding up. In the event the Corporation shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the aggregate amount to which holders of shares of Series A Preferred Stock were entitled immediately prior to such event under the proviso in clause (i) of the preceding sentence shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. |
| 7. | Consolidation, Merger, etc. In case the Corporation shall enter into any consolidation, merger, combination or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then in any such case each share of Series A Preferred Stock shall at the same time be similarly exchanged or changed into an amount per share, subject to the provision for adjustment hereinafter set forth, equal to 100 times the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, into which or for which each share of Common Stock is changed or exchanged. In the event the Corporation shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the amount set forth in the preceding sentence with respect to the exchange or change of shares of Series A Preferred Stock shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. |
ORMAT TECHNOLOGIES, INC. | 2024 PROXY STATEMENT 87
| 8. | No Redemption. The shares of Series A Preferred Stock shall not be redeemable. |
| 9. | Rank. The Series A Preferred Stock shall rank, with respect to the payment of dividends and the distribution of assets, junior to all series of any other class of the Corporation’s Preferred Stock. |
| 10. | Amendment. The Certificate of Incorporation of the Corporation shall not be amended in any manner which would materially alter or change the powers, preferences or special rights of the Series A Preferred Stock so as to affect them adversely without the affirmative vote of the holders of the outstanding shares of Series A Preferred Stock, voting together as a single class. |
FIFTH: The Corporation is to have perpetual existence.
SIXTH: The private property of the stockholders of the Corporation shall not be subject to the payment of corporate debts to any extent whatever.
SEVENTH: Subject to the rights of the holders of any series of Preferred Stock to elect additional directors under specified circumstances, the number of directors of the Corporation shall be fixed from time to time exclusively by the Board of Directors pursuant to a resolution adopted by a majority of the whole Board. A director need not be a stockholder. The election of directors of the Corporation need not be by ballot unless the By-Laws so require.
Beginning with the annual meeting of stockholders to be held in 2020, the directors, including those who may be elected by the holders of any series of Preferred Stock or any other series or class of stock as provided herein or in any Preferred Stock Designation, shall be elected to hold office for a term expiring the next annual meeting of the stockholders of the Corporation and until such director’s successor is duly elected and qualified or until such director’s earlier death, resignation, retirement, disqualification or removal from office. At each annual meeting of the stockholders of the Corporation, directors shall be elected by a majority of all votes cast for each of the director nominees at such meeting, except for contested elections (i.e., elections in which there are a greater number of candidates than there are seats to be filled), in which case the directors shall be elected by a plurality vote of all votes cast for the election of directors at such meeting.
Subject to the rights of the holders of any series of Preferred Stock or any other series or class of stock, as provided herein or in any Preferred Stock Designation, to elect additional directors under specific circumstances, at a meeting of stockholders called expressly for that purpose, one or more members of the Board of Directors (including the entire Board) may be removed, with or without cause, by a vote of the holders of a majority of the shares then entitled to vote on the election of directors.
Subject to the rights of the holders of any series of Preferred Stock, and unless the Board of Directors otherwise determines, newly created directorships resulting from any increase in the authorized number of directors or any vacancies on the Board of Directors resulting from death, resignation, retirement, disqualification, removal from office or other cause may be filled only by a majority vote of the directors then serving on the Board, though less than a quorum. Directors so chosen shall hold office for a term expiring at the next annual meeting of stockholders and until such director’s successor shall have been duly elected and qualified or until such director’s earlier death, resignation, retirement, disqualification or removal from office. No decrease in the number of authorized directors constituting the whole Board of Directors shall shorten the term of any incumbent director.
To the fullest extent permitted by the General Corporation Law of the State of Delaware, as the same exists or as may hereafter be amended,NOno director or officer of the Corporation shall be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director or officer. If the General Corporation Law of the State of Delaware is hereafter amended to authorize corporate action further eliminating or limiting the personal liability of directors or officers, then the liability of a director or officer of the Corporation shall be eliminated or limited to the fullest extent permitted by the General Corporation Law of the State of Delaware as so amended, automatically and without further action, upon the date of such amendment.except for liability (i) for ny breach of the director’s duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the General Corporation Law of the State of Delaware, or (iv) for any transaction from which the director derived an improper personal benefit. No repeal or modification of this paragraph, directly or by adoption of an inconsistent provision of this FourthFifth Amended and Restated Certificate of Incorporation, by the stockholders of the Corporation shall be effective with respect to any cause of action, suit, claim or other matter that, but for this paragraph, would accrue or arise prior to such repeal or modification.
EIGHTH: Unless otherwise determined by the Board of Directors, no holder of stock of the Corporation shall, as such holder, have any right to purchase or subscribe for any stock of any class which the Corporation may issue or sell, whether or not exchangeable for any stock of the Corporation of any class or classes and whether out of unissued shares authorized by the Certificate of Incorporation of the Corporation as originally filed or by any amendment thereof or out of shares of stock of the Corporation acquired by it after the issue thereof.
ORMAT TECHNOLOGIES, INC. | 2024 PROXY STATEMENT 88
NINTH: Whenever a compromise or arrangement is proposed between this Corporation and its creditors or any class of them and/or between this Corporation and its stockholders or any class of them, any court of equitable jurisdiction within the State of Delaware may, on the application in a summary way of this Corporation or of any creditor or stockholder thereof, or on the application of any receiver or receivers appointed for this Corporation under the provisions of Section 291 of Title 8 of the General Corporation Law of the State of Delaware or on the application of trustees in dissolution or of any receiver or receivers appointed for this Corporation under the provisions of Section 279 of Title 8 of the General Corporation Law of the State of Delaware order a meeting of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this Corporation, as the case may be, to be summoned in such manner as the said court directs. If a majority in number representing three-fourths in value of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this Corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of this Corporation as a consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the court to which said application has been made, be binding on all the creditors or class of creditors, and/or on all the stockholders or class of stockholders, of this Corporation, as the case may be, and also on this Corporation.
TENTH:
| 1. | Amendment of Certificate of Incorporation. From time to time any of the provisions of the Certificate of Incorporation may be amended, altered or repealed, and other provisions authorized by the statutes of the State of Delaware at the time in force may be added or inserted in the manner at the time prescribed by said statutes, and all rights at any time conferred upon the stockholders of the Corporation by its Certificate of Incorporation are granted, subject to this reservation. Notwithstanding the foregoing and any other provision herein (and notwithstanding the fact that a lesser percentage or separate class vote may be specified herein, in the By-Laws of the Corporation or by law), the affirmative vote of the holders of at least 75% of the voting power of the then outstanding shares of capital stock of the Corporation entitled to vote generally, voting together as a single class, shall be required to amend or repeal, or adopt any provisions inconsistent with, the second paragraph of Article Seventh hereof. |
| 2. | By-Laws. The Board of Directors is expressly authorized to make, alter, amend and repeal the By-Laws of the Corporation, in any manner not inconsistent with the laws of the State of Delaware or of the Certificate of Incorporation of the Corporation, subject to the power of the holders of the then outstanding shares of capital stock of the Corporation entitled to vote generally to alter or repeal the By-Laws made by the Board of Directors. |
ELEVENTH:
| 1. | Written Consent in Lieu of Meeting. Any action which could be taken at any annual or special meeting of stockholders may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall (a) be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and (b) be delivered to the corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the corporation having custody of the records of proceedings of meetings of stockholders. |
| 2. | Special Meeting of Stockholders. A special meeting of the stockholders for any purpose or purposes, unless otherwise provided by law, may be called by the Chairman of the Board, the President, the Board or the holders of not less than a majority of all the outstanding shares of the corporation entitled to vote at the meeting may call special meetings of the stockholders for any purpose or, at any time that Ormat Industries Ltd. or any OIL Transferee owns at least 20% of the then outstanding shares of Common Stock, by Ormat Industries Ltd. or any OIL Transferee. For purposes of this Section 2 of Article Eleventh, “OIL Transferee” shall mean a transferee of Ormat Industries Ltd. or any other OIL Transferee that receives at least 20% of the then outstanding shares of Common Stock that pursuant to an instrument of transfer or related agreement has been granted rights under this Section 2 of Article Eleventh by Ormat Industries Ltd. or any OIL Transferee. |
ORMAT TECHNOLOGIES, INC. | 2024 PROXY STATEMENT 89
APPENDIX B
ORMAT TECHNOLOGIES, INC.
SECOND AMENDED AND RESTATED 2018 INCENTIVE COMPENSATION PLAN
1. Purpose of Plan
The purpose of the Ormat Technologies, Inc.Second Amended and Restated 2018 Incentive Compensation Plan (as amended from time to time, the “Plan”“Plan”) is to assist Ormat Technologies, Inc. and its Subsidiaries (the “Corporation”“Corporation”) in attracting, retaining and motivating Eligible Individuals (as defined below) by making it possible to offer them compensation for their contributions to the Corporation, to encourage them to acquire a proprietary interest in the Corporation, to incentivize them to join or continue in the service of the Corporation and to increase their efforts for its welfare.
2. Definitions
As used in the Plan, the following words have the following meanings for purposes of the Plan, any Award Agreement and any standardized terms and conditions that may be adopted from time to time by the Committee:
| (a) | “Award” means an award or grant made to a Participant pursuant to the Plan, including, without limitation, an award or grant of an Option, Stock Appreciation Right, Restricted Stock, Stock Units, Phantom Stock, Other Stock-Based Awards, Incentive Bonuses, Performance Awards, dividend equivalents or any combination of such types of Awards. |
| (b) | “Award Agreement” Agreement” means any written or electronic document by which each Award by the Corporation under the Plan is evidenced. |
| (c) | “Board” means the Board of Directors of the Corporation. |
| (d) | “Cause” means, unless otherwise defined in an Award Agreement, (i) the commission of, or plea of guilty or no contest to, a felony or a crime involving moral turpitude; (ii) conduct that results in or is reasonably likely to result in, harm to the reputation or business of the Corporation; (iii) the Grantee’s material violation of any Firm policy concerning confidential information, conflict of interest, trading, anti-corruption or bribery, or workplace conduct or (iv)] the failure or refusal by the Participant to perform his or her normal duties (other than any such failure resulting from the Participant’s incapacity due to physical or mental illness), which has not ceased within ten (10) days after a demand for substantial performance is delivered to the Participant by the Corporation, which demand identifies the manner in which the Corporation believes that the Participant has not performed such duties; provided, however, if a Participant is a party to an employment or service agreement with the Corporation, “Cause” shall have the meaning set forth in such agreement. The Committee, in its sole and absolute discretion, shall determine whether a Participant has been discharged for Cause. |
| (e) | “Change in Control” Control” means, unless otherwise defined in an Award Agreement (subject to the last paragraph of this definition), (i) if any "person"“person” or "group"“group” as those terms are used in Sections 13(d) and 14(d) of the Exchange Act or any successors thereto, is or becomes the "beneficial owner"“beneficial owner” (as defined in Rule 13d-3 under the Exchange Act or any successor thereto), directly or indirectly, of securities of the Corporation representing more than 50% of the combined voting power of the Corporation'sCorporation’s then outstanding securities, provided, that the acquisition of additional securities by any person or group that owns more than 50% of the voting power prior to such acquisition of additional securities shall not be a Change in Control; or (ii) during any twelve-month period, individuals who at the beginning of such period constitute the Board of Directors and any new directors whose election by the Board of Directors or nomination for election by the Corporation'sCorporation’s stockholders was approved by at least a majority of the directors then still in office who either were directors at the beginning of the period or whose election was previously so approved, cease for any reason to constitute a majority thereof; or (iii) the stockholders of the Corporation approve a merger or consolidation of the Corporation with any other corporation, other than a merger or consolidation (A) which would result in all or a portion of the voting securities of the Corporation outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 50% of the combined voting power of the voting securities of the Corporation or such surviving entity outstanding immediately after such merger or consolidation or (B) by which the corporate existence of the Corporation is not affected and following which the Corporation'sCorporation’s chief executive officer and directors retain their positions with the Corporation (and constitute at least a majority of the Board of Directors) and such merger or consolidation is consummated; or (iv) the stockholders of the Corporation approve an agreement for the sale or disposition by the Corporation of all or substantially all the Corporation'sCorporation’s assets and such sale or disposition is consummated. |
ORMAT TECHNOLOGIES, INC. | 2024 PROXY STATEMENT 90
To the extent any provision of the Plan or an Award Agreement would cause a payment of deferred compensation that is subject to Section 409A to be made upon the occurrence of a Change in Control, then such payment shall not be made unless such Change in Control also constitutes a “change in ownership”, “change in effective control” or “change in ownership of a substantial portion of the Corporation’s assets” within the meaning of Section 409A. Any payment that would have been made except for the application of the preceding sentence shall be made in accordance with the payment schedule that would have applied in the absence of a Change in Control.
Notwithstanding anything to the contrary, any definition of Change in Control in an Award Agreement may not provide that a Change in Control will occur upon the announcement, commencement, stockholder approval or other potential occurrence of any event or transaction of a transaction (rather than its consummation), and/or an unapproved change in less than a majority of the Board, and/or acquisition of a 15% or less of outstanding Common Stock; and/or announcement or commencement of a tender or exchange offer.
| (f) | “Code” means the Internal Revenue Code of 1986, as amended, and the applicable rulings and regulations thereunder. |
| (g) | “Committee” means the Compensation Committee of the Board of Directors or a subcommittee thereof formed by the Compensation Committee to act as the Committee hereunder. The Committee shall consist of no fewer than two Directors, each of whom is (i) a “non-employee director” within the meaning of Rule 16b-3 under the Exchange Act and (iii) an “independent director” for purpose of the rules of the principal U.S. national securities exchange on which the shares of Common Stock are traded, to the extent required by such rules. |
| (h) | “Common Stock” means the common stock of the Corporation, par value $.001. |
| (i) | “Director” Director” means mean a member of the Board who is not an employee of the Corporation. |
| (j) | “Effective Date” means the date specified in Section 2123 of the Plan. |
| (k) | “Eligible Individuals” means officers, directors, or employees (including prospective directors or employees) of the Corporation, and consultants or others who may provide services to the Corporation. |
| (l) | “Exchange Act” means the Securities Exchange Act of 1934, as amended. |
| (m) | “Fair Market Value” means with respect to shares of Common Stock as of any date, (i) the closing price of the shares of Common Stock as reported on the principal U.S. national securities exchange on which the shares of Common Stock are listed and traded on such date, or, if there is no closing price on that date, then on the last preceding date on which such a closing price was reported; (ii) if the shares of Common Stock are not listed on any U.S. national securities exchange but are quoted in an inter-dealer quotation system on a last sale basis, the final ask price of the shares of Common Stock reported on the inter-dealer quotation system for such date, or, if there is no such sale on such date, then on the last preceding date on which a sale was reported; or (iii) if the shares of Common Stock are neither listed on a U.S. national securities exchange nor quoted on an inter-dealer quotation system on a last sale basis, the amount determined by the Committee to be the fair market value of the shares of Common Stock as determined by the Committee in its sole discretion. The Fair Market Value of any property other than shares of Common Stock shall mean the market value of such property determined by such methods or procedures as shall be established from time to time by the Committee. |
| (n) | “Grant Committee” means the Committee, excluding those members of the Committee who are not at the time of the grant of the Award “Non-Employee Directors” as defined in Rule 16b-3(b)(3)(i) under the Exchange Act, for purposes of Section 16 of the Exchange Act and the rules under the Exchange Act. |
| (o) | “Incentive Bonus” means an Award of a right to receive cash or shares of Common Stock, whether or not subject to performance goals and performance periods. |
| (p) | “Incentive Stock Option” means an Option to purchase shares of Common Stock which is intended to qualify as an incentive stock option as defined in Code Section 422. |
| (q) | “Nonqualified Stock Option” means an Option to purchase shares of Common Stock which is not intended to qualify as an incentive stock option as defined in Code Section 422. |
| (r) | “Option” means an Award of the right to purchase a specified number of shares of Common Stock at a specified price for a specified period. Two types of Options may be awarded under the Plan: (i) Incentive Stock Options; and (ii) Nonqualified Stock Options. |
| (s) | “Participant” means an Eligible Individual to whom one or more Awards have been granted that have not all been forfeited or terminated under the Plan. |
| (t) | “Performance Award” means an Award granted pursuant to Section 11 of the Plan. |
| (u) | “Phantom Stock” means an Award of a right to receive an amount in cash equal to the Fair Market Value of a share of Common Stock at a specified date. |
| (v) | “Plan” has the meaning set forth in the Preamble. |
| (w) | “Prior Plan” Plan” means the Ormat Technologies, Inc. 2012 Incentive Compensation Plan, as amended and restated. |
ORMAT TECHNOLOGIES, INC. | 2024 PROXY STATEMENT 91
| (x) | “Restricted Stock” means an Award of shares of Common Stock that is subject to restrictions on transfer for a specified period. |
| (y) | “Retirement” Retirement” means, unless otherwise defined in an Award Agreement, Separation from Service upon attainment of the applicable retirement age in those countries in which the law determines the retirement age and age 65 in other countries. |
| (z) | “Section 409A” 409A” means Section 409A of the Code. |
| (aa) | (aa) | “Separation from Service” Service” has the meaning set forth in Code Section 409A. |
| (bb) | (bb) | “Stock Appreciation Right” or “SAR” means an Award of a right to receive, upon exercise, an amount payable in cash or shares equal to the number of shares subject to the Stock Appreciation Right that is being exercised multiplied by the excess (if any) of (i) the Fair Market Value of a share of Common Stock on the date the Award is exercised, over (ii) the exercise price specified in the Stock Appreciation Right Award. |
| (cc) | (cc) | “Stock Unit” means an Award of the right to receive a fixed number of shares of Common Stock at a future date. |
| (dd) | (dd) | “Subsidiary” means any (i) corporation or entity, other than the Corporation, in an unbroken chain of corporations or other entities beginning with the Corporation if each of the corporations, or other entities other than the last corporation or entity in the unbroken chain owns 50% or more of the voting stock in one of the other corporations in such chain and (ii) any corporation or other entity in which the Corporation has a significant equity interest and which the Committee has determined to be a Subsidiary for purposes of the Plan, except that with respect to Incentive Stock Options, “Subsidiary” means “subsidiary corporation” as defined in Code Section 424(f). |
| (ee) | (ee) | “Substitute Awards” Awards” shall mean Awards granted or shares of Common Stock issued by the Corporation in assumption of, or in substitution or exchange for, awards previously granted, in each case by a company acquired by the Corporation or any Subsidiary or with which the Corporation or any Subsidiary combines. |
3. Administration of Plan
The Plan will be administered by the Committee. The Committee shall have full power and authority, subject to the provisions of the Plan and subject to such orders or resolutions not inconsistent with the provisions of the Plan as may from time to time be adopted by the Board, to: (i) select the Eligible Individuals to whom Awards may from time to time be granted hereunder; (ii) determine the type or types of Awards to be granted to each Participant hereunder; (iii) determine the number of shares of Common Stock (or dollar value) to be covered by each Award granted hereunder; (iv) determine the terms and conditions, not inconsistent with the provisions of the Plan, of any Award granted hereunder; (v) determine whether, to what extent and under what circumstances Awards may be settled in cash, shares of Common Stock or other property; (vi) determine whether, to what extent, and under what circumstances cash, shares of Common Stock, other property and other amounts payable with respect to an Award made under the Plan shall be accelerated or deferred; (vii) determine whether, to what extent and under what circumstances any Award shall be canceled or suspended; (viii) interpret and administer the Plan and any instrument or agreement entered into under or in connection with the Plan, including any Award Agreement; (ix) correct any defect, supply any omission or reconcile any inconsistency in the Plan or any Award in the manner and to the extent that the Committee shall deem desirable to carry it into effect; (x) establish such rules and regulations and appoint such agents as it shall deem appropriate for the proper administration of the Plan; (xi) determine whether any Award, other thanan Option or Stock Appreciation Right, will have dividend equivalents; and (xii) make any other determination and take any other action that the Committee deems necessary or desirable for the administration of the Plan. Decisions of the Committee shall be final, conclusive and binding on all persons or entities, including the Corporation and any Participant.
The Committee may adopt its own rules of procedure, and the action of a majority of the Committee members (or the Grant Committee, as the case may be), taken at a meeting, or taken without a meeting by unanimous written consent of the members of the Committee or otherwise in accordance with the Committee’s charter and the Corporation’s bylaws, will constitute action by the Committee.
To the extent not inconsistent with applicable law, including Section 16 of the Exchange Act, or the rules and regulations of the principal U.S. national securities exchange on which the shares of Common Stock are traded, the Committee may (i) delegate to a committee of one or more directors of the Corporation any of the authority of the Committee under the Plan, including the right to grant, cancel or suspend Awards and (ii) authorize one or more executive officers to do one or more of the following with respect to Eligible Individuals who are not Directors or executive officers of the Corporation (A) designate Eligible Individuals to be recipients of Awards, (B) determine the number of shares of Common Stock subject to such Awards to be received by such Eligible Individuals and (C) cancel or suspend Awards to such Eligible Individuals; provided that (x) any resolution of the Committee authorizing such officer(s) must specify the total number of shares of Common Stock subject to Awards that such officer(s) may so award and (y) the Committee may not authorize any officer to designate himself or herself as the recipient of an Award.
ORMAT TECHNOLOGIES, INC. | 2024 PROXY STATEMENT 92
In no event shall dividends or dividend equivalents be paid with respect to Options or Stock Appreciation Rights. Notwithstanding any other provision of the Plan to the contrary, with respect to any Award that provides for or includes a right to dividends or dividend equivalents, if dividends are declared during the period that an equity Award is outstanding, such dividends (or dividend equivalents) shall either (i) not be paid or credited with respect to such Award or (ii) be accumulated but remain subject to vesting requirement(s) to the same extent as the applicable Award and shall only be paid at the time or times such vesting requirement(s) are satisfied.
4. Awards
4. | (a) | General. Awards may be made from time to time under the Plan to such Eligible Individuals and in such form and having such terms, conditions and limitations as the Committee or the Grant Committee may determine. Awards may be granted singly, in combination or in tandem. The amount of each Award granted under the Plan and the terms, conditions and limitations of each such Award will be set forth in writing on a form approved by the Committee (or the Grant Committee, as the case may be), consistent, however, with the terms and conditions of the Plan. The provisions of Awards need not be the same with respect to each Participant. In case of any discrepancy between the terms in any Award and the Plan, the Plan will govern. |
| (b) | Minimum Vesting Requirement. After the Effective Date, notwithstanding any other provision of the Plan to the contrary, Awards granted under the Plan (other than cash-based awards) shall vest no earlier than the first anniversary of the date on which the Award is granted; provided, that the following Awards shall not be subject to the foregoing minimum vesting requirement: any (i) Substitute Awards, (ii) shares of Common Stock delivered in lieu of fully vested cash obligations, (iii) Awards to non-employee Directors that vest on the earlier of the one-year anniversary of the date of grant and the next annual meeting of stockholders which is at least 50 weeks after the immediately preceding year’s annual meeting, and (iv) any additional Awards the Committee may grant, up to a maximum of five percent (5%) of the available share reserve authorized for issuance under the Plan pursuant to Section 15(a) (subject to adjustment under Section 18); and provided further that the foregoing restriction does not apply to the Committee’s discretion to provide for accelerated exercisability or vesting of any Award, including in cases of retirement, death, disability or a Change in Control, in the terms of the Award Agreement or otherwise. |
5. Awards may be made from time to time under the Plan to such Eligible Individuals and in such form and having such terms, conditions and limitations as the Committee or the Grant Committee may determine. Awards may be granted singly, in combination or in tandem. The amount of each Award granted under the Plan and the terms, conditions and limitations of each such Award will be set forth in writing on a form approved by the Committee (or the Grant Committee, as the case may be), consistent, however, with the terms and conditions of the Plan. The provisions of Awards need not be the same with respect to each Participant. In case of any discrepancy between the terms in any Award and the Plan, the Plan will govern.
OptionsThe terms and conditions with respect to each Award of Options under the Plan will be consistent with the following:
| (a) | Option Price. The Option price per share will not be less than the Fair Market Value per share of Common Stock at the date of grant (or the day following if the Corporation’s earnings results are released on the date of grant), unless the Option was granted through the assumption of, or in substitution for, outstanding awards previously granted to individuals who become employees of the Corporation as a result of merger, consolidation, acquisition or other corporate transaction involving the Corporation (in which case the assumption or substitution shall be accomplished in a manner that permits the Option to be exempt from Code Section 409A). |
| (b) | Incentive Stock Options. Awards of Incentive Stock Options will be granted only to employees. |
| (c) | Exercise Period. The exercise of an Award may be conditioned upon completion of all or a part of a vesting schedule specified in the Award and/or the satisfaction of performance or other criteria as specified in the Award. The Award will be exercisable, in whole or in part, from time to time beginning as stated in the Award and ending at the expiration of ten years from the date of grant of the Award, unless an earlier expiration date will be stated in the Award or the Option expires because of the exercise of a tandem SAR, whether granted under this Plan or another Plan of the Corporation. An Option Award Agreement may provide that in the event that on the last business day of the term of an Option (other than an Incentive Stock Option) (i) the exercise of the Option is prohibited by applicable law or (ii) shares of Common Stock may not be purchased or sold by certain employees or directors of the Corporation due to the “black-out period” of a Corporation policy or a “lock-up” agreement undertaken in connection with an issuance of securities by the Corporation, the term of the Option shall be extended for a period of thirty (30) days following the end of the legal prohibition, black-out period or lock-up agreement. |
| (d) | Limit on Incentive Stock Options. To the extent that the aggregate Fair Market Value of shares of Common Stock with respect to which Incentive Stock Options are exercisable, whether granted under this Plan or another Plan of the Corporation, for the first time by any Participant during any calendar year exceeds $100,000, such Options will be treated as Nonqualified Stock Options. This subclause (d) will be applied by taking Options into account in the order in which they were granted. For purposes of this subclause (d), the Fair Market Value of any share of Common Stock will be determined at the time of the Award. If this subclause (d) results in a portion of an Incentive Stock Option exceeding the $100,000 limitation, only such excess will be treated as a Nonqualified Stock Option. In addition, any person who owns (or is deemed to own pursuant to Code Section 424(d)) stock possessing more than 10% of the total combined voting power of all classes of stock of the Corporation or any of its affiliates shall not be granted an Incentive Stock Option unless the exercise price is at least 110% of the Fair Market Value of the Common Stock on the date of grant and the Option is not exercisable after the expiration of five years from the date of grant. |
ORMAT TECHNOLOGIES, INC. | 2024 PROXY STATEMENT 93
(a) Option Price. The Option price per share will not be less than the Fair Market Value per share of Common Stock at the date of grant (or the day following if the Corporation’s earnings results are released on the date of grant), unless the Option was granted through the assumption of, or in substitution for, outstanding awards previously granted to individuals who become employees of the Corporation as a result of merger, consolidation, acquisition or other corporate transaction involving the Corporation (in which case the assumption or substitution shall be accomplished in a manner that permits the Option to be exempt from Code Section 409A).
(b) Incentive Stock Options | (e) | Payment for Shares of Common Stock. Payment in full of the Option price must be made upon exercise of each Option and may be made (i) in cash, (ii) to the extent provided in the Award, by the delivery (either actual delivery or by attestation procedures established by the Corporation) of shares of Common Stock with a Fair Market Value determined as of the date of exercise equal to the Option price, (iii) by reduction in the number of shares of Common Stock otherwise deliverable upon exercise of the Option with a Fair Market Value equal to the aggregate exercise price at the time of exercise or (iv) in a combination of any of the foregoing. The Committee may also permit Participants, either on a selective or aggregate basis, simultaneously to exercise Options and to sell the shares of Common Stock thereby acquired pursuant to a brokerage or similar arrangement, approved in advance by the Committee and to use the proceeds from such sale as payment of the purchase price of such shares of Common Stock subject to the Option. |
| (f) | Substitute Options. Notwithstanding anything to the contrary herein, any Option issued in substitution for an option previously issued by another entity, which substitution occurs in connection with a transaction to which Code Section 424(a) is applicable, may provide for an exercise price computed in accordance with Code Section 424(a) and the regulations thereunder and may contain such other terms and conditions as the Committee may prescribe to cause such substitute Option to contain as nearly as possible the same terms and conditions (including the applicable vesting and termination provision) as those contained in the previously issued option being replaced thereby. |
| (g) | Repricing. Repricing of Options and SARs shall not be permitted. For this purpose, a “repricing” means any of the following (or any action that has the same effect as any of the following): (A) changing the terms of an Option or SAR to lower its exercise price; (B) any other action that is treated as a “repricing” under generally accepted accounting principles; (C) canceling an Option or SAR at a time when its price is less than the Fair Market Value of the underlying stock in exchange for another Option, SAR or other equity award; and (D) repurchasing for cash an Option or SAR at a time when its price is less than the Fair Market Value of the underlying stock, unless the change, other action or cancellation, exchange or repurchase occurs in connection with an event set forth in Section 18. |
| (h) | No Reloads. No Options granted under the Plan shall contain any provision entitling a Participant to the automatic grant of additional Options in connection with the exercise of the original Option. |
6. Awards of Incentive Stock Options will be granted only to employees.
(c) Exercise Period. The exercise of an Award may be conditioned upon completion of all or a part of a vesting schedule specified in the Award and/or the satisfaction of performance or other criteria as specified in the Award. The Award will be exercisable, in whole or in part, from time to time beginning as stated in the Award and ending at the expiration of ten years from the date of grant of the Award, unless an earlier expiration date will be stated in the Award or the Option expires because of the exercise of a tandem SAR, whether granted under this Plan or another Plan of the Corporation. An Option Award Agreement may provide that in the event that on the last business day of the term of an Option (other than an Incentive Stock Option) (i) the exercise of the Option is prohibited by applicable law or (ii) shares of Common Stock may not be purchased or sold by certain employees or directors of the Corporation due to the “black-out period” of a Corporation policy or a “lock-up” agreement undertaken in connection with an issuance of securities by the Corporation, the term of the Option shall be extended for a period of thirty (30) days following the end of the legal prohibition, black-out period or lock-up agreement.
(d) Limit on Incentive Stock Options. To the extent that the aggregate Fair Market Value of shares of Common Stock with respect to which Incentive Stock Options are exercisable, whether granted under this Plan or another Plan of the Corporation, for the first time by any Participant during any calendar year exceeds $100,000, such Options will be treated as Nonqualified Stock Options. This subclause (d) will be applied by taking Options into account in the order in which they were granted. For purposes of this subclause (d), the Fair Market Value of any share of Common Stock will be determined at the time of the Award. If this subclause (d) results in a portion of an Incentive Stock Option exceeding the $100,000 limitation, only such excess will be treated as a Nonqualified Stock Option. In addition, any person who owns (or is deemed to own pursuant to Code Section 424(d)) stock possessing more than 10% of the total combined voting power of all classes of stock of the Corporation or any of its affiliates shall not be granted an Incentive Stock Option unless the exercise price is at least 110% of the Fair Market Value of the Common Stock on the date of grant and the Option is not exercisable after the expiration of five years from the date of grant.
(e) Payment for Shares of Common Stock. Payment in full of the Option price must be made upon exercise of each Option and may be made (i) in cash, (ii) to the extent provided in the Award, by the delivery (either actual delivery or by attestation procedures established by the Corporation) of shares of Common Stock with a Fair Market Value determined as of the date of exercise equal to the Option price, (iii) by reduction in the number of shares of Common Stock otherwise deliverable upon exercise of the Option with a Fair Market Value equal to the aggregate exercise price at the time of exercise or (iv) in a combination of any of the foregoing. The Committee may also permit Participants, either on a selective or aggregate basis, simultaneously to exercise Options and to sell the shares of Common Stock thereby acquired pursuant to a brokerage or similar arrangement, approved in advance by the Committee and to use the proceeds from such sale as payment of the purchase price of such shares of Common Stock subject to the Option.
(f) Substitute Options. Notwithstanding anything to the contrary herein, any Option issued in substitution for an option previously issued by another entity, which substitution occurs in connection with a transaction to which Code Section 424(a) is applicable, may provide for an exercise price computed in accordance with Code Section 424(a) and the regulations thereunder and may contain such other terms and conditions as the Committee may prescribe to cause such substitute Option to contain as nearly as possible the same terms and conditions (including the applicable vesting and termination provision) as those contained in the previously issued option being replaced thereby.
(g) Repricing. Repricing of Options and SARs shall not be permitted. For this purpose, a “repricing” means any of the following (or any action that has the same effect as any of the following): (A) changing the terms of an Option or SAR to lower its exercise price; (B) any other action that is treated as a “repricing” under generally accepted accounting principles; (C) canceling an Option or SAR at a time when its price is less than the Fair Market Value of the underlying stock in exchange for another Option, SAR or other equity award; and (D) repurchasing for cash an Option or SAR at a time when its price is less than the Fair Market Value of the underlying stock, unless the change, other action or cancellation, exchange or repurchase occurs in connection with an event set forth in Section 18.
(h)No Reloads. No Options granted under the Plan shall contain any provision entitling a Participant to the automatic grant of additional Options in connection with the exercise of the original Option.
6. | Awards of Stock Appreciation Rights (SARs) |
Appreciation Rights (SARs)The terms and conditions with respect to each Award of SARs under the Plan will be consistent with the following:
(a) | (a) | Awards of SARs. The grant price of a SAR will not be less than the Fair Market Value of the Common Stock on the date the SAR is granted, unless the SAR was granted through the assumption of, or in substitution for, outstanding awards previously granted to individuals who became employees of the Corporation as a result of a merger, consolidation, acquisition or other corporate transaction involving the Corporation (in which case the assumption or substitution shall be accomplished in a manner that permits the SAR to be exempt from Code Section 409A). SARs may be (i) freestanding SARs or (ii) tandem SARs granted in conjunction with an Option, either at the time of grant of the Option or at a later date, and exercisable at the Participant’s election instead of all or part of the related Option. To the extent an Option is exercised in whole or in part, any tandem SAR granted in conjunction with such Option (or part thereof) shall terminate and cease to be exercisable. To the extent a tandem SAR is exercised in whole or in part, the Option (or part thereof) in conjunction with which such tandem SAR was granted shall terminate and cease to be exercisable. The payment to which the Participant is entitled on exercise of a SAR may be in cash, in Common Stock valued at Fair Market Value on the date of exercise or partly in cash and partly in Stock, as provided in the Award or, in the absence of such provision as the Committee may determine. A SAR shall have such vesting and other provisions as set forth in the Award consistent with the terms of the Plan, provided that no SAR may be exercised more than 10 years from the date of grant. |
| (b) | Payment. When the vesting schedule and/or specified performance or other criteria have been satisfied, the Participant will be paid in accordance with the terms of the Award an amount in cash or in shares of Common Stock valued at Fair Market Value on the date of exercise or a combination thereof. |
| (c) | No Reloads. No SARs granted under the Plan shall contain any provision entitling a Participant to the automatic grant of additional SARs in connection with the exercise of the original SAR. |
7. Awards of SARs
. The grant price of a SAR will not be less than the Fair Market Value of the CommonRestricted Stock
on the date the SAR is granted, unless the SAR was granted through the assumption of, or in substitution for, outstanding awards previously granted to individuals who became employees of the Corporation as a result of a merger, consolidation, acquisition or other corporate transaction involving the Corporation (in which case the assumption or substitution shall be accomplished in a manner that permits the SAR to be exempt from Code Section 409A). SARs may be (i) freestanding SARs or (ii) tandem SARs granted in conjunction with an Option, either at the time of grant of the Option or at a later date, and exercisable at the Participant’s election instead of all or part of the related Option. To the extent an Option is exercised in whole or in part, any tandem SAR granted in conjunction with such Option (or part thereof) shall terminate and cease to be exercisable. To the extent a tandem SAR is exercised in whole or in part, the Option (or part thereof) in conjunction with which such tandem SAR was granted shall terminate and cease to be exercisable. The payment to which the Participant is entitled on exercise of a SAR may be in cash, in Common Stock valued at Fair Market Value on the date of exercise or partly in cash and partly in Stock, as provided in the Award or, in the absence of such provision as the Committee may determine. A SAR shall have such vesting and other provisions as set forth in the Award consistent with the terms of the Plan, provided that no SAR may be exercised more than 10 years from the date of grant.(b) Payment. When the vesting schedule and/or specified performance or other criteria have been satisfied, the Participant will be paid in accordance with the terms of the Award an amount in cash or in shares of Common Stock valued at Fair Market Value on the date of exercise or a combination thereof.
(c)No Reloads. No SARs granted under the Plan shall contain any provision entitling a Participant to the automatic grant of additional SARs in connection with the exercise of the original SAR.
7. | Awards of Restricted Stock |
The terms and conditions with respect to each Award of Restricted Stock under the Plan will be consistent with the following:
| (a) | Terms. The Award may specify a vesting schedule and performance or other criteria for each Award. The Restricted Stock will be forfeited to the extent the vesting schedule and/or specified performance or other criteria have not been satisfied, except as otherwise provided in the Plan or the Award. |
ORMAT TECHNOLOGIES, INC. | 2024 PROXY STATEMENT 94
(a) Terms. The Award may specify a vesting schedule and performance or other criteria for each Award. The Restricted Stock will be forfeited to the extent the vesting schedule and/or specified performance or other criteria have not been satisfied, except as otherwise provided in the Plan or the Award.
(b) Book-Entry Accounts. Restricted Stock will be held in book-entry accounts subject to the direction of the Corporation (or if the Corporation elects, certificates may be issued in the Participant’s name but delivered to and held by the Corporation). Any dividends that may be paid in cash or otherwise on the Restricted Stock will be delivered to and held by the Corporation on the book-entry accounts or reinvested in Restricted Stock, at the discretion of the Committee, so long as the Restricted Stock remains subject to the restrictions of the vesting schedule and/or specified performance or other criteria.
(c) Payment. When the vesting schedule and/or specified performance or other criteria have been satisfied, the Participant will have the right to direct the transfer of such Restricted Stock. In addition, the book-entry accounts will reflect that the Restricted Stock has been released. Certificates will be issued for the Restricted Stock (as Common Stock) and any dividends held by the Corporation will also be delivered to the Participant. The Participant may be paid interest on the amount of cash dividends so delivered computed at the same rate and in the same manner as interest is credited from time to time on the Corporation’s corporate cash balances, as determined by the Committee.
| (b) | Book-Entry Accounts. Restricted Stock will be held in book-entry accounts subject to the direction of the Corporation (or if the Corporation elects, certificates may be issued in the Participant’s name but delivered to and held by the Corporation). Any dividends that may be paid in cash or otherwise on the Restricted Stock Unitswill be delivered to and held by the Corporation on the book-entry accounts or reinvested in Restricted Stock, at the discretion of the Committee, so long as the Restricted Stock remains subject to the restrictions of the vesting schedule and/or specified performance or other criteria. |
| (c) | Payment. When the vesting schedule and/or specified performance or other criteria have been satisfied, the Participant will have the right to direct the transfer of such Restricted Stock. In addition, the book-entry accounts will reflect that the Restricted Stock has been released. Certificates will be issued for the Restricted Stock (as Common Stock) and any dividends held by the Corporation will also be delivered to the Participant. The Participant may be paid interest on the amount of cash dividends so delivered computed at the same rate and in the same manner as interest is credited from time to time on the Corporation’s corporate cash balances, as determined by the Committee. |
8. Awards of Stock Units
The terms and conditions with respect to each Award of Stock Units under the Plan will be consistent with the following:
(a) Terms | (a) | Terms. The Award entitles the Participant to receive at a specified future date, payment of an amount equal to all or a portion of the Fair Market Value of a specified number of shares of Common Stock at the end of a specified period. The Award may specify a vesting schedule and performance or other criteria for each Award. No payment will be made under the Award to the extent the vesting schedule and/or specified performance or other criteria have not been satisfied, except as otherwise provided in the Plan or the Award. Stock Units containing performance criteria, or other restrictions, including but not limited to the continued employment or service of the Participant with the Corporation during a period set forth in the Award, may be designated as “Restricted Stock Units”. |
| (b) | Payment. Stock Units will be credited to an account to be maintained on behalf of the Participant. When the vesting schedule and/or specified performance or other criteria have been satisfied, the Participant will be paid in accordance with the terms of the Award in shares of Common Stock, valued at Fair Market Value on the date of settlement, or cash. The earned portion of an Award may be paid currently or on a deferred basis and may be credited with interest or an earnings equivalent as specified in the Award or as determined by the Committee. |
9. Awards of an amount equal to all or a portion of the Fair Market Value of a specified number of shares of CommonPhantom Stock at the end of a specified period. The Award may specify a vesting schedule and performance or other criteria for each Award. No payment will be made under the Award to the extent the vesting schedule and/or specified performance or other criteria have not been satisfied, except as otherwise provided in the Plan or the Award. Stock Units containing performance criteria, or other restrictions, including but not limited to the continued employment or service of the Participant with the Corporation during a period set forth in the Award, may be designated as “Restricted Stock Units”.
(b) Payment. Stock Units will be credited to an account to be maintained on behalf of the Participant. When the vesting schedule and/or specified performance or other criteria have been satisfied, the Participant will be paid in accordance with the terms of the Award in shares of Common Stock, valued at Fair Market Value on the date of settlement, or cash. The earned portion of an Award may be paid currently or on a deferred basis and may be credited with interest or an earnings equivalent as specified in the Award or as determined by the Committee.
9. | Awards of Phantom Stock |
The terms and conditions with respect to each Award of Phantom Stock under the Plan will be consistent with the following:
(a) Terms. The Award may specify a vesting schedule and performance or other criteria for each Award. No payment will be made under the Award to the extent the vesting schedule and/or specified performance or other criteria have not been satisfied, except as otherwise provided in the Plan or the Award.
(b) Payment | (a) | Terms. The Award may specify a vesting schedule and performance or other criteria for each Award. No payment will be made under the Award to the extent the vesting schedule and/or specified performance or other criteria have not been satisfied, except as otherwise provided in the Plan or the Award. |
| (b) | Payment. Phantom Stock will be credited to an account to be maintained on behalf of the Participant. When the vesting schedule and/or specified performance or other criteria have been satisfied, the Participant will be paid in accordance with the terms of the Award an amount in cash equal to the Fair Market Value of such Phantom Stock at such time. The earned portion of an Award may be paid currently or on a deferred basis and may be credited with interest or an earnings equivalent as specified in the Award or as determined by the Committee. |
10. Awards of the Participant. When the vesting schedule and/or specified performance or other criteria have been satisfied, the Participant will be paid in accordance with the terms of the Award an amount in cash equal to the Fair Market Value of such Phantom Stock at such time. The earned portion of an Award may be paid currently or on a deferred basis and may be credited with interest or an earnings equivalent as specified in the Award or as determined by the Committee.
10. | Awards of Incentive Bonuses |
Incentive BonusesThe terms and conditions with respect to each Award of an Incentive Bonus under the Plan will be consistent with the following:
| (a) | Terms. Incentive Bonuses will be credited to an account to be maintained on behalf of the Participant. The Award may specify a vesting schedule and performance or other criteria for each Award. No payment will be made under the Award to the extent the vesting schedule and/or specified performance or other criteria have not been satisfied, except as otherwise provided in the Plan or the Award. |
| (b) | Payment. When the vesting schedule and/or specified performance or other criteria have been satisfied, the Participant will be paid in accordance with the terms of the Award an amount in cash or in shares of Common Stock (or Restricted Stock) valued at Fair Market Value. The earned portion of an Award may be paid currently or on a deferred basis and may be credited with interest or an earnings equivalent as specified in the Award or as determined by the Committee. |
ORMAT TECHNOLOGIES, INC. | 2024 PROXY STATEMENT 95
(a) Terms. Incentive Bonuses will be credited to an account to be maintained on behalf of the Participant. The Award may specify a vesting schedule and performance or other criteria for each Award. No payment will be made under the Award to the extent the vesting schedule and/or specified performance or other criteria have not been satisfied, except as otherwise provided in the Plan or the Award.
(b) Payment. When the vesting schedule and/or specified performance or other criteria have been satisfied, the Participant will be paid in accordance with the terms of the Award an amount in cash or in shares of Common Stock (or Restricted Stock) valued at Fair Market Value. The earned portion of an Award may be paid currently or on a deferred basis and may be credited with interest or an earnings equivalent as specified in the Award or as determined by the Committee.
11. Performance Awards
The terms and conditions with respect to each Performance Award will be consistent with the following:
(a) Description of Performance Award. The Committee or the Grant Committee (and in the case of Awards to directors or officers subject to Section 16 of the Exchange Act, only the Grant Committee) may, from time to time, make Awards under this Section 11 of the Plan of Restricted Stock, Stock Units, Other Stock-Based Awards, Phantom Stock, and Incentive Bonus Awards (“Performance Awards”) to Participants in such form and having such terms, conditions and limitations as the Committee or the Grant Committee, as the case may be, may determine. Performance Awards may be granted singly, in combination or in tandem.
(b) Performance Goals. Pursuant to this Section 11 of the Plan, for each Award of Restricted Stock, Stock Units, Phantom Stock and Incentive Bonus Awards, the Committee or the Grant Committee, as the case may be, will establish, in writing, a performance period, applicable performance goals and the performance objectives to be used in determining whether and to what extent Performance Awards will be deemed to be earned. The performance goals will be based on one or more objective or subjective performance criteria selected by the Committee or the Grant Committee, as the case may be, to measure the performance of the Corporation as a whole, and/or or any Subsidiary, business unit or individual objectives. Such performance goals and performance objectives also may be based solely on the Corporation’s performance or based on the relative performance of other companies or upon comparisons of any of the indicators of performance relative to other companies.
(c) Payment. Performance Awards will be paid according to payment rules provided under each type of Award. Unless otherwise provided in the applicable Award, a Participant must be employed by the Corporation on the last day of a performance period to be eligible for payment in respect of a Performance Award for such performance period.
12. | Dividend Equivalents(a) | Description of Performance Award. The Committee or the Grant Committee (and in the case of Awards to directors or officers subject to Section 16 of the Exchange Act, only the Grant Committee) may, from time to time, make Awards under this Section 11 of the Plan of Restricted Stock, Stock Units, Other Stock-Based Awards, Phantom Stock, and Incentive Bonus Awards (“Performance Awards”) to Participants in such form and having such terms, conditions and limitations as the Committee or the Grant Committee, as the case may be, may determine. Performance Awards may be granted singly, in combination or in tandem. |
| (b) | Performance Goals. Pursuant to this Section 11 of the Plan, for each Award of Restricted Stock, Stock Units, Phantom Stock and Incentive Bonus Awards, the Committee or the Grant Committee, as the case may be, will establish, in writing, a performance period, applicable performance goals and the performance objectives to be used in determining whether and to what extent Performance Awards will be deemed to be earned. The performance goals will be based on one or more objective or subjective performance criteria selected by the Committee or the Grant Committee, as the case may be, to measure the performance of the Corporation as a whole, and/or or any Subsidiary, business unit or individual objectives. Such performance goals and performance objectives also may be based solely on the Corporation’s performance or based on the relative performance of other companies or upon comparisons of any of the indicators of performance relative to other companies. |
| (c) | | Payment. Performance Awards will be paid according to payment rules provided under each type of Award. Unless otherwise provided in the applicable Award, a Participant must be employed by the Corporation on the last day of a performance period to be eligible for payment in respect of a Performance Award for such performance period. |
12. Dividend Equivalents
Any Awards (other than Awards of Options, SARs and Restricted Stock) under the Plan may, in the discretion of the Committee, earn dividend equivalents. In respect of any such Award which is outstanding on a dividend record date for Common Stock, the Participant may be credited with an amount equal to the cash or stock dividends or other distributions that would have been paid on the shares of Common Stock covered by such Award had such covered shares of Common Stock been issued and outstanding on such dividend record date. The Committee will establish such rules and procedures governing the crediting of dividend equivalents, including the timing, form of payment and payment contingencies of such dividend equivalents, as it deems are appropriate or necessary. Notwithstanding any other provision of the Plan to the contrary, dividend equivalents shall not be paid with respect to any forfeitable Awards but may be accumulated and only be paid upon payment of the vested and earned Awards.
13. | Other Stock-Based Awards |
13. Other Stock-Based Awards
The Committee may grant other Awards under the Plan pursuant to which shares of Common Stock are or may be acquired in the future. Such Other Stock-Based Awards may be granted alone, in addition to or in tandem with any Award of any type granted under the Plan and must be consistent with the purpose of the Plan.
14. Effect of Separation from Service
| (a) | Separation from Service Upon Death or Retirement and Exercise of Award. If a Participant incurs a Separation from Service by reason of death or because of Retirement and the Participant (or a permitted transferee) holds an outstanding Award, such Participant will immediately forfeit any portion of the Award which has not yet vested, unless otherwise provided in the terms of the Award. The portion of the Award that has not yet been exercised, if applicable, may be exercised from and after the date of the death or date of Retirement of the Participant for a period of one year (or until the expiration date specified in the Award if earlier) and only to the extent the Participant (or a permitted transferee) was entitled to exercise the Award at the time of the death or Retirement, unless otherwise provided in the terms of the Award, provided that an Incentive Stock Option must be exercised no later than the expiration date set forth in the Award or, if earlier, three months after Separation from Service. |
| (b) | Separation from Service For Any Other Reason and Exercise of Award. If a Participant incurs a Separation from Service before the end of a vesting schedule for any reason other than death or Retirement, such Participant will immediately forfeit any portion of the Award which has not yet vested, unless otherwise provided in the terms of the Award. The portion of the Award that has not yet been exercised, if applicable, may be exercised only within three months after the Separation from Service (or until the expiration date specified in the Award if earlier) and only to the extent the Participant (or a permitted transferee) was entitled to exercise the Award at the time of the Separation from Service, unless otherwise provided in the terms of the Award, provided that an Incentive Stock Option must be exercised no later than the expiration date set forth in the Award or, if earlier, three months after Separation from Service. |
ORMAT TECHNOLOGIES, INC. | 2024 PROXY STATEMENT 96
| (c) | Six-Month Wait for Specified Employees. To the extent that any Award is subject to the rules of Code Section 409A and is to be paid out as a result of a Separation from Service, and to the extent that the Participant is deemed to be a “specified employee” (as that term is defined in Code Section 409A and pursuant to procedures established by the Corporation) on the Separation from Service date, then, notwithstanding any other provision in this Plan or any Award to the contrary, such payment will not be made to the Participant during the six-month period immediately following his or her Separation from Service date. Instead, on the first day of the seventh month following such Separation from Service date, all amounts that otherwise would have been paid to the Participant during that six-month period, but were not due to this Section 14(c), will be paid to the Participant at such time in a single lump sum (without any interest with respect to that six-month period). This six-month delay will cease to be applicable if the Participant separates from service due to death or if he or she dies before the six-month period has elapsed. |
15. Shares Issuable and Reserved
| (A) | SUBJECT TO ADJUSTMENT AS PROVIDED IN SECTION 18, AS OF THE EFFECTIVE DATE, A TOTAL OF 6,700,0008,100,000 SHARES OF COMMON STOCK SHALL BE AUTHORIZED FOR AWARDS GRANTED UNDER THE PLAN (WHICH, FOR THE AVOIDANCE OF DOUBT, INCLUDES THE AGGREGATE NUMBER OF SHARES OF COMMON STOCK AUTHORIZED TO BE GRANTED (WHETHER OR NOT SUBJECT TO OUTSTANDING, OR ISSUED IN SETTLEMENT OF, AWARDS) UNDER THE PLAN PRIOR TO THE EFFECTIVE DATE OF THE AMENDMENT AND RESTATEMENT OF THE PLAN),* ALL OF WHICH MAY BE GRANTED AS INCENTIVE STOCK OPTIONS, LESS ONE (1) SHARE FOR EVERY ONE (1) SHARE THAT WAS SUBJECT TO AN OPTION OR STOCK APPRECIATION RIGHT GRANTED AFTER MARCH 1, 20222024 UNDER THE PLAN AND 2.15 SHARES OF COMMON STOCK FOR EVERY ONE (1) SHARE THAT WAS SUBJECT TO AN AWARD OTHER THAN AN OPTION OR STOCK APPRECIATION RIGHT GRANTED AFTER MARCH 1, 20222024 UNDER THE PLAN. ANY SHARES OF COMMON STOCK THAT ARE SUBJECT TO OPTIONS OR STOCK APPRECIATION RIGHTS SHALL BE COUNTED AGAINST THIS LIMIT AS ONE (1) SHARE OF COMMON STOCK FOR EVERY ONE (1) SHARE GRANTED, AND ANY SHARES OF COMMON STOCK THAT ARE SUBJECT TO AWARDS OTHER THAN OPTIONS OR STOCK APPRECIATION RIGHTS SHALL BE COUNTED AGAINST THIS LIMIT AS 2.15 SHARES OF COMMON STOCK FOR EVERY ONE (1) SHARE GRANTED. NO FURTHER AWARDS MAY BE GRANTED UNDER ANY PRIOR PLAN. |
| (B) | IF (I) ANY SHARES OF COMMON STOCK SUBJECT TO AN AWARD ARE FORFEITED, AN AWARD EXPIRES OR AN AWARD IS SETTLED FOR CASH (IN WHOLE OR IN PART), OR (II) AFTER MARCH 1, 20222024 ANY SHARES OF COMMON STOCK SUBJECT TO AN AWARD UNDER ANY PRIOR PLAN ARE FORFEITED, AN AWARD UNDER ANY PRIOR PLAN EXPIRES OR IS SETTLED FOR CASH (IN WHOLE OR IN PART), THEN IN EACH SUCH CASE THE SHARES OF COMMON STOCK SUBJECT TO SUCH AWARD OR AWARD UNDER ANY PRIOR PLAN SHALL, TO THE EXTENT OF SUCH FORFEITURE, EXPIRATION OR CASH SETTLEMENT, BE ADDED TO THE SHARES OF COMMON STOCK AVAILABLE FOR AWARDS UNDER THE PLAN, IN ACCORDANCE WITH SECTION 15(D) BELOW. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN, THE FOLLOWING SHARES OF COMMON STOCK SHALL NOT BE ADDED TO THE SHARES OF COMMON STOCK AUTHORIZED FOR GRANT UNDER PARAGRAPH (A) OF THIS SECTION: (I) SHARES OF COMMON STOCK TENDERED BY THE PARTICIPANT OR WITHHELD BY THE CORPORATION IN PAYMENT OF THE PURCHASE PRICE OF AN OPTION OR, AFTER MARCH 1, 20222024, AN OPTION UNDER ANY PRIOR PLAN, (II) SHARES OF COMMON STOCK TENDERED BY THE PARTICIPANT OR WITHHELD BY THE CORPORATION TO SATISFY ANY TAX WITHHOLDING OBLIGATION WITH RESPECT TO AWARDS OR, AFTER MARCH 1, 20222024, AWARDS UNDER ANY PRIOR PLAN, (III) SHARES OF COMMON STOCK SUBJECT TO A STOCK APPRECIATION RIGHT OR, AFTER MARCH 1, 20222024, A STOCK APPRECIATION RIGHT UNDER ANY PRIOR PLAN THAT ARE NOT ISSUED IN CONNECTION WITH ITS STOCK SETTLEMENT ON EXERCISE THEREOF, AND (IV) SHARES OF COMMON STOCK REACQUIRED BY THE CORPORATION ON THE OPEN MARKET OR OTHERWISE USING CASH PROCEEDS FROM THE EXERCISE OF OPTIONS OR, AFTER MARCH 1, 20222024, OPTIONS UNDER ANY PRIOR PLAN. |
| (C) | SUBSTITUTE AWARDS SHALL NOT REDUCE THE SHARES OF COMMON STOCK AUTHORIZED FOR GRANT UNDER THE PLAN, NOR SHALL SHARES OF COMMON STOCK SUBJECT TO A SUBSTITUTE AWARD BE ADDED TO THE SHARES OF COMMON STOCK AVAILABLE FOR AWARDS UNDER THE PLAN AS PROVIDED IN SECTION 15(B) ABOVE. ADDITIONALLY, IN THE EVENT THAT A COMPANY ACQUIRED BY THE CORPORATION OR WITH WHICH THE CORPORATION COMBINES HAS SHARES AVAILABLE UNDER A PRE-EXISTING PLAN APPROVED BY STOCKHOLDERS AND NOT ADOPTED IN CONTEMPLATION OF SUCH ACQUISITION OR COMBINATION, THE SHARES AVAILABLE FOR GRANT PURSUANT TO THE TERMS OF SUCH PRE-EXISTING PLAN (AS ADJUSTED, TO THE EXTENT APPROPRIATE, USING THE EXCHANGE RATIO OR OTHER ADJUSTMENT OR VALUATION RATIO OR FORMULA USED IN SUCH ACQUISITION OR COMBINATION TO DETERMINE THE CONSIDERATION PAYABLE TO THE HOLDERS OF COMMON STOCK OF THE ENTITIES PARTY TO SUCH ACQUISITION OR COMBINATION) MAY BE USED FOR AWARDS UNDER THE PLAN AND SHALL NOT REDUCE THE SHARES OF COMMON STOCK |
| * | For reference, the share reserve consists of (x) 5,000,000an aggregate of 6,700,000 shares previously approved by stockholders at the Company’s 2018 and 2022 Annual MeetingMeetings, of which 1,802,7472,716,359 shares remained available for grant after March 1, 20222024 and (y) a request for 1,700,0001,400,000 additional shares which is subject to stockholder approval at the Company’s 20222024 Annual Meeting. |
ORMAT TECHNOLOGIES, INC. | 2024 PROXY STATEMENT 97
(a) Separation from Service Upon Death or Retirement | | AUTHORIZED FOR GRANT UNDER THE PLAN (AND SHARES OF COMMON STOCK SUBJECT TO SUCH AWARDS SHALL NOT BE ADDED TO THE SHARES OF COMMON STOCK AVAILABLE FOR AWARDS UNDER THE PLAN AS PROVIDED IN SECTION 15(B) ABOVE); PROVIDED THAT AWARDS USING SUCH AVAILABLE SHARES SHALL NOT BE MADE AFTER THE DATE AWARDS OR GRANTS COULD HAVE BEEN MADE UNDER THE TERMS OF THE PRE-EXISTING PLAN, ABSENT THE ACQUISITION OR COMBINATION, AND SHALL ONLY BE MADE TO INDIVIDUALS WHO WERE NOT ELIGIBLE INDIVIDUALS PRIOR TO SUCH ACQUISITION OR COMBINATION. |
| (D) | ANY SHARES OF COMMON STOCK THAT AGAIN BECOME AVAILABLE FOR AWARDS UNDER THE PLAN PURSUANT TO THIS SECTION AFTER MARCH 1, 20222024 SHALL BE ADDED AS (I) ONE (1) SHARE FOR EVERY ONE (1) SHARE SUBJECT TO OPTIONS OR STOCK APPRECIATION RIGHTS GRANTED UNDER THE PLAN OR OPTIONS OR STOCK APPRECIATION RIGHTS GRANTED UNDER ANY PRIOR PLAN, AND (II) AS 2.15 SHARES OF COMMON STOCK FOR EVERY ONE (1) SHARE SUBJECT TO AWARDS OTHER THAN OPTIONS OR STOCK APPRECIATION RIGHTS GRANTED UNDER THE PLAN OR AWARDS OTHER THAN OPTIONS OR STOCK APPRECIATION RIGHTS GRANTED UNDER ANY PRIOR PLAN. |
| (E) | THE MAXIMUM NUMBER OF SHARES SUBJECT TO AWARDS GRANTED DURING A SINGLE FISCAL YEAR TO ANY NON-EMPLOYEE DIRECTOR, TAKEN TOGETHER WITH ANY CASH FEES PAID DURING THE FISCAL YEAR TO THE NON-EMPLOYEE DIRECTOR IN RESPECT OF THE DIRECTOR’S SERVICE AS A MEMBER OF THE BOARD DURING SUCH YEAR (INCLUDING SERVICE AS A MEMBER OR CHAIR OF ANY COMMITTEES OF THE BOARD), SHALL NOT EXCEED $500,000 IN TOTAL VALUE (CALCULATING THE VALUE OF ANY SUCH AWARDS BASED ON THE GRANT DATE FAIR VALUE OF SUCH AWARDS FOR FINANCIAL REPORTING PURPOSES). THE INDEPENDENT MEMBERS OF BOARD MAY MAKE EXCEPTIONS TO THIS LIMIT FOR A NON-EXECUTIVE CHAIR OF THE BOARD, PROVIDED THAT THE NON-EMPLOYEE DIRECTOR RECEIVING SUCH ADDITIONAL COMPENSATION DOES NOT PARTICIPATE IN THE DECISION TO AWARD SUCH COMPENSATION. |
16. Limitations and Exercise of Award
. If a Participant incurs a Separation from Service by reason of death or because of Retirement and the Participant (or a permitted transferee) holds an outstanding Award, such Participant will immediately forfeit any portion of the Award which has not yet vested, unless otherwise provided in the terms of the Award. The portion of the Award that has not yet been exercised, if applicable, may be exercised from and after the date of the death or date of Retirement of the Participant for a period of one year (or until the expiration date specified in the Award if earlier) and only to the extent the Participant (or a permitted transferee) was entitled to exercise the Award at the time of the death or Retirement, unless otherwise provided in the terms of the Award, provided that an Incentive Stock Option must be exercised no later than the expiration date set forth in the Award or, if earlier, three months after Separation from Service. | (A) | MAXIMUM PERIOD. NO AWARDS WILL BE MADE UNDER THE PLAN AFTER JANUARY 31, 2028THE FIFTH ANNIVERSARY OF THE EFFECTIVE DATE, BUT THE TERMS OF AWARDS GRANTED ON OR BEFORE THE EXPIRATION DATE MAY EXTEND BEYOND SUCH EXPIRATION DATE. AT THE TIME AN AWARD IS GRANTED OR AMENDED OR THE TERMS OR CONDITIONS OF AN AWARD ARE CHANGED, THE COMMITTEE MAY PROVIDE FOR LIMITATIONS OR CONDITIONS ON SUCH AWARD. |
| (B) | TRANSFERABILITY. NO AWARD OR PORTION OF THE AWARD WILL BE TRANSFERABLE BY A PARTICIPANT OTHERWISE THAN BY WILL OR BY THE LAWS OF DESCENT AND DISTRIBUTION, EXCEPT THAT A NONQUALIFIED STOCK OPTION AND TANDEM SAR MAY BE TRANSFERRED PURSUANT TO A DOMESTIC RELATIONS ORDER OR BY GIFT TO A FAMILY MEMBER OF THE HOLDER TO THE EXTENT PERMITTED IN THE APPLICABLE AWARD. A TANDEM SAR MAY NEVER BE TRANSFERRED EXCEPT TO THE TRANSFEREE OF THE RELATED OPTION. DURING THE LIFETIME OF THE PARTICIPANT, AN AWARD WILL BE EXERCISABLE ONLY BY THE PARTICIPANT UNLESS A NONQUALIFIED STOCK OPTION HAS BEEN TRANSFERRED TO A FAMILY MEMBER OF THE HOLDER, IN WHICH CASE IT WILL BE EXERCISABLE ONLY BY SUCH TRANSFEREE. FOR THE PURPOSE OF THIS PROVISION, A “FAMILY MEMBER” HAS THE MEANING SET FORTH IN THE GENERAL INSTRUCTIONS TO FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933. |
| (C) | NO RIGHTS AS SHAREHOLDER. NO PERSON WHO RECEIVES AN AWARD UNDER THE PLAN WHICH INCLUDES SHARES OF COMMON STOCK OR THE RIGHT TO ACQUIRE SHARES OF COMMON STOCK (WHICH MAY INCLUDE SHARES OF RESTRICTED STOCK PURSUANT TO SECTION 7 OF THE PLAN) WILL HAVE ANY RIGHTS OF A STOCKHOLDER: (I) AS TO SHARES OF COMMON STOCK UNDER OPTION UNTIL, AFTER PROPER EXERCISE OF THE OPTION, SUCH SHARES OF COMMON STOCK HAVE BEEN RECORDED ON THE CORPORATION’S OFFICIAL STOCKHOLDER RECORDS AS HAVING BEEN ISSUED OR TRANSFERRED; (II) AS TO SHARES OF COMMON STOCK TO BE DELIVERED FOLLOWING EXERCISE OF A SAR UNTIL, AFTER PROPER EXERCISE OF THE SAR AND DETERMINATION BY THE COMMITTEE TO MAKE PAYMENT FOR THE SAR IN SHARES OF COMMON STOCK, SUCH SHARES OF COMMON STOCK WILL HAVE BEEN RECORDED ON THE CORPORATION’S OFFICIAL STOCKHOLDER RECORDS AS HAVING BEEN ISSUED OR TRANSFERRED; OR (III) AS TO SHARES OF COMMON STOCK INCLUDED IN AWARDS OF RESTRICTED STOCK, STOCK UNITS, OTHER STOCK-BASED AWARDS OR INCENTIVE BONUSES, UNTIL SUCH SHARES OF COMMON STOCK WILL HAVE BEEN RECORDED ON THE CORPORATION’S OFFICIAL STOCKHOLDER RECORDS AS HAVING BEEN ISSUED OR TRANSFERRED, EXCEPT FOR ANY DIVIDEND EQUIVALENT RIGHTS PROVIDED IN SECTION 12 OF THE PLAN. |
| (f) | The Corporation’s Obligations. The Corporation will not be obligated to deliver any shares of Common Stock until they have been listed (or authorized for listing upon official notice of issuance) upon each stock exchange upon which outstanding shares of Common Stock at the time are listed or until there has been compliance with such laws or regulations as the Corporation may deem applicable. The Corporation will use its best efforts to effect such listing and compliance. No fractional shares of Common Stock will be delivered. |
ORMAT TECHNOLOGIES, INC. | 2024 PROXY STATEMENT 98
(b) Separation from Service For Any Other Reason and Exercise of Award. If a Participant incurs a Separation from Service before the end of a vesting schedule for any reason other than death or Retirement, such Participant will immediately forfeit any portion of the Award which has not yet vested, unless otherwise provided in the terms of the Award. The portion of the Award that has not yet been exercised, if applicable, may be exercised only within three months after the Separation from Service (or until the expiration date specified in the Award if earlier) and only to the extent the Participant (or a permitted transferee) was entitled to exercise the Award at the time of the Separation from Service, unless otherwise provided in the terms of the Award, provided that an Incentive Stock Option must be exercised no later than the expiration date set forth in the Award or, if earlier, three months after Separation from Service.
(c) Six-Month Wait for Specified Employees. To the extent that any Award is subject to the rules of Code Section 409A and is to be paid out as a result of a Separation from Service, and to the extent that the Participant is deemed to be a “specified employee” (as that term is defined in Code Section 409A and pursuant to procedures established by the Corporation) on the Separation from Service date, then, notwithstanding any other provision in this Plan or any Award to the contrary, such payment will not be made to the Participant during the six-month period immediately following his or her Separation from Service date. Instead, on the first day of the seventh month following such Separation from Service date, all amounts that otherwise would have been paid to the Participant during that six-month period, but were not due to this Section 14(c), will be paid to the Participant at such time in a single lump sum (without any interest with respect to that six-month period). This six-month delay will cease to be applicable if the Participant separates from service due to death or if he or she dies before the six-month period has elapsed.
| (g) | No Rights to Continue Status. Nothing contained in the Plan will affect the right of the Corporation to cause the Participant to incur a Separation from Service at any time or for any reason. |
| (h) | ERISA. Notwithstanding any language in the Plan to the contrary, no deferral will be permitted under the Plan if it will result in the Plan becoming an “employee benefit plan” under Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). The Plan is not intended to constitute an employee benefit plan subject to ERISA. |
| (i) | Clawback. An Award agreement may provide that the Committee may cancel such Award if the participant has engaged in or engages in activity that is in conflict with or adverse to the interest of the Corporation while employed by or providing services to the Corporation or any subsidiary, including fraud or conduct contributing to any financial restatements or irregularities. The Committee may also provide in an Award agreement that in such event, the participant will forfeit any compensation, gain or other value realized thereafter on the vesting, exercise or settlement of such Award, the sale or other transfer of such Award, or the sale of shares of Common Stock acquired in respect of such Award, and Reservedmust promptly repay such amounts to the Corporation. The Committee may also provide in an Award agreement that if the participant receives any amount in excess of what the participant should have received under the terms of the Award for any reason (including without limitation by reason of a financial restatement, mistake in calculations or other administrative error), then the participant shall be required to promptly repay any such excess amount to the Corporation. Furthermore, to the extent required by applicable law (including, without limitation, Section 304 of the Sarbanes-Oxley Act and Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act) and/or the rules and regulations of NYSE or any other securities exchange or inter-dealer quotation service on which the Common Stock is listed or quoted, or if so required pursuant to a written policy adopted by the Corporation, Awards shall be subject (including on a retroactive basis) to clawback, forfeiture or similar requirements. |
| (j) | Compliance with Laws. Notwithstanding anything contained herein to the contrary, the Corporation shall not be required to sell, issue or deliver shares of Common Stock hereunder or thereunder if the sale, issuance or delivery thereof would constitute a violation by the Participant or the Corporation of any provision of any law or regulation of any governmental authority (including the Securities Act of 1933, as amended) or any national securities exchange; and as a condition of any sale or issuance the Corporation may require such agreements or undertakings, if any, as it may deem necessary or advisable to assure compliance with any such law or regulation, including but not limited to Code Section 409A. |
| (k) | Unfunded Status of the Plan. The Plan is intended to constitute an unfunded and unsecured plan for incentive compensation. With respect to any payments not yet made to a Participant by the Corporation, nothing contained herein shall give any such Participant any rights that are greater than those of a general creditor of the Corporation. In its sole discretion, the Committee may authorize the creation of trusts or other arrangements to meet the obligations created under the Plan to deliver the shares of Common Stock or payments in lieu of or with respect to Awards hereunder; provided, however, that the existence of such trusts or other arrangements is consistent with the unfunded status of the Plan. |
| (l) | Nature of Payments. All Awards made pursuant to the Plan are in consideration of services performed or to be performed for the Corporation or any Subsidiary, division or business unit of the Corporation or a Subsidiary. Any income or gain realized pursuant to Awards under the Plan constitutes a special incentive payment to the Participant and shall not be taken into account, to the extent permissible under applicable law, as compensation for purposes of any of the employee benefit plans of the Corporation or any Subsidiary except as may be determined by the Committee or by the Board or board of directors of the applicable Subsidiary (or as may be required by the terms of such plan). |
| (m) | Other Plans. Nothing contained in the Plan shall prevent the Board from adopting other or additional compensation arrangements, subject to stockholder approval if such approval is required pursuant to law or the applicable requirements of any stock exchange; and such arrangements may be either generally applicable or applicable only in specific cases. |
| (n) | Severability. The provisions of the Plan shall be deemed severable. If any provision of the Plan shall be held unlawful or otherwise invalid or unenforceable in whole or in part by a court of competent jurisdiction or by reason of change in a law or regulation, such provision shall (a) be deemed limited to the extent that such court of competent jurisdiction deems it lawful, valid and/or enforceable and as so limited shall remain in full force and effect, and (b) not affect any other provision of the Plan or part thereof, each of which shall remain in full force and effect. If the making of any payment or the provision of any other benefit required under the Plan shall be held unlawful or otherwise invalid or unenforceable by a court of competent jurisdiction or any governmental regulatory agency, or impermissible under the rules of any securities exchange on which the shares of Common Stock are listed, such unlawfulness, invalidity, unenforceability or impermissibility shall not prevent any other payment or benefit from being made or provided under the Plan, and if the making of any payment in full or the provision of any other benefit required under the Plan in full would be unlawful or otherwise invalid or impermissible, then such unlawfulness, invalidity or impermissibility shall not prevent such payment or benefit from being made or provided in part, to the extent that it would not be unlawful, invalid or impermissible and the maximum payment or benefit that would not be unlawful, invalid or impermissible shall be made or provided under the Plan. |
ORMAT TECHNOLOGIES, INC. | 2024 PROXY STATEMENT 99
(a) Subject to adjustment as provided in Section 18, a total | (o) | Forfeiture Events. Any Award held by a Participant whose Separation from Service is due to a discharge for Cause shall be forfeited. The Committee may specify in an Award that a Participant’s rights, payments and benefits with respect to an Award shall be subject to reduction, forfeiture or recoupment upon the occurrence of certain other events (in addition to applicable vesting conditions of an Award). Such events may include, without limitation, breach of non-competition, non-solicitation, confidentiality, or other restrictive covenants that are contained in the Award or otherwise applicable to the Participant, or other conduct by the Participant that is detrimental to the business or reputation of the Corporation. |
| (p) | Acceleration of Exercisability and Vesting. The Committee, or the Grant Committee, as applicable, shall have the power to accelerate the time at which an Award may first be exercised or the time during which an Award or any part thereof will vest in accordance with the Plan, notwithstanding the provisions in the Award stating the time at which it may first be exercised or the time during which it will vest. For the sake of clarity, the Committee, or the Grant Committee, may provide in the applicable Award Agreement that part and/or all of the Award shall be accelerated upon the occurrence of certain pre-determined events and/or conditions, such as a Change in Control. |
| (q) | Governing Law. The law of the State of New York shall govern all questions concerning the construction, validity and interpretation of the Plan. |
17. Transfers and Leaves of 5,000,000 shares of Common Stock shall be authorized for Awards granted under the Plan, less one (1) share for every one (1) share that was subject to an option or stock appreciation right granted after December 31, 2017 under any Prior Plan and three shares of Common Stock for every one (1) share that was subject to an award other than an option or stock appreciation right granted after December 31, 2017 under any Prior Plan. Any shares of Common Stock that are subject to Options or Stock Appreciation Rights shall be counted against this limit as one (1) share of Common Stock for every one (1) share granted, and any shares of Common Stock that are subject to Awards other than Options or Stock Appreciation Rights shall be counted against this limit as three (3) shares of Common Stock for every one (1) share granted. After the effective date of the Plan, no further awards may be granted under any Prior Plan.
(b)If (i) any shares of Common Stock subject to an Award are forfeited, an Award expires or an Award is settled for cash (in whole or in part), or (ii) after December 31, 2017 any shares of Common Stock subject to an award under any Prior Plan are forfeited, an award under any Prior Plan expires or is settled for cash (in whole or in part), then in each such case the shares of Common Stock subject to such Award or award under any Prior Plan shall, to the extent of such forfeiture, expiration or cash settlement, be added to the shares of Common Stock available for Awards under the Plan, in accordance with Section 15(d) below. Notwithstanding anything to the contrary contained herein, the following shares of Common Stock shall not be added to the shares of Common Stock authorized for grant under paragraph (a) of this Section: (i) shares of Common Stock tendered by the Participant or withheld by the Corporation in payment of the purchase price of an Option or, after December 31, 2017, an option under any Prior Plan, (ii) shares of Common Stock tendered by the Participant or withheld by the Corporation to satisfy any tax withholding obligation with respect to Awards or, after December 31, 2017, awards under any Prior Plan, (iii) shares of Common Stock subject to a Stock Appreciation Right or, after December 31, 2017, a stock appreciation right under any Prior Plan that are not issued in connection with its stock settlement on exercise thereof, and (iv) shares of Common Stock reacquired by the Corporation on the open market or otherwise using cash proceeds from the exercise of Options or, after December 31, 2017, options under any Prior Plan.
(c) Substitute Awards shall not reduce the shares of Common Stock authorized for grant under the Plan, nor shall shares of Common Stock subject to a Substitute Award be added to the shares of Common Stock available for Awards under the Plan as provided in Section 15(b) above. Additionally, in the event that a company acquired by the Corporation or with which the Corporation combines has shares available under a pre-existing plan approved by stockholders and not adopted in contemplation of such acquisition or combination, the shares available for grant pursuant to the terms of such pre-existing plan (as adjusted, to the extent appropriate, using the exchange ratio or other adjustment or valuation ratio or formula used in such acquisition or combination to determine the consideration payable to the holders of common stock of the entities party to such acquisition or combination) may be used for Awards under the Plan and shall not reduce the shares of Common Stock authorized for grant under the Plan (and shares of Common Stock subject to such Awards shall not be added to the shares of Common Stock available for Awards under the Plan as provided in Section 15(b) above); provided that Awards using such available shares shall not be made after the date awards or grants could have been made under the terms of the pre-existing plan, absent the acquisition or combination, and shall only be made to individuals who were not Eligible Individuals prior to such acquisition or combination.
(d) Any shares of Common Stock that again become available for Awards under the Plan pursuant to this Section shall be added as (i) one (1) share for every one (1) share subject to Options or Stock Appreciation Rights granted under the Plan or options or stock appreciation rights granted under any Prior Plan, and (ii) as three (3) shares of Common Stock for every one (1) share subject to Awards other than Options or Stock Appreciation Rights granted under the Plan or awards other than options or stock appreciation rights granted under any Prior Plan.
(e) The maximum number of Shares subject to Awards granted during a single fiscal year to any non-employee Director, taken together with any cash fees paid during the fiscal year to the non-employee Director in respect of the Director’s service as a member of the Board during such year (including service as a member or chair of any committees of the Board), shall not exceed $500,000 in total value (calculating the value of any such Awards based on the grant date fair value of such Awards for financial reporting purposes). The independent members of Board may make exceptions to this limit for a non-executive chair of the Board, provided that the non-employee Director receiving such additional compensation does not participate in the decision to award such compensation.
16. | Limitations and Conditions |
(a) Maximum Period. No Awards will be made under the Plan after January 31, 2028, but the terms of Awards granted on or before the expiration date may extend beyond such expiration date. At the time an Award is granted or amended or the terms or conditions of an Award are changed, the Committee may provide for limitations or conditions on such Award.
(b) Transferability. No Award or portion of the Award will be transferable by a Participant otherwise than by will or by the laws of descent and distribution, except that a Nonqualified Stock Option and tandem SAR may be transferred pursuant to a domestic relations order or by gift to a family member of the holder to the extent permitted in the applicable Award. A tandem SAR may never be transferred except to the transferee of the related Option. During the lifetime of the Participant, an Award will be exercisable only by the Participant unless a Nonqualified Stock Option has been transferred to a family member of the holder, in which case it will be exercisable only by such transferee. For the purpose of this provision, a “family member” has the meaning set forth in the General Instructions to Form S-8 Registration Statement under the Securities Act of 1933.
(c) No Rights as Shareholder. No person who receives an Award under the Plan which includes shares of Common Stock or the right to acquire shares of Common Stock (which may include shares of Restricted Stock pursuant to Section 7 of the Plan) will have any rights of a stockholder: (i) as to shares of Common Stock under Option until, after proper exercise of the Option, such shares of Common Stock have been recorded on the Corporation’s official stockholder records as having been issued or transferred; (ii) as to shares of Common Stock to be delivered following exercise of a SAR until, after proper exercise of the SAR and determination by the Committee to make payment for the SAR in shares of Common Stock, such shares of Common Stock will have been recorded on the Corporation’s official stockholder records as having been issued or transferred; or (iii) as to shares of Common Stock included in Awards of Restricted Stock, Stock Units, other Stock-Based Awards or Incentive Bonuses, until such shares of Common Stock will have been recorded on the Corporation’s official stockholder records as having been issued or transferred, except for any dividend equivalent rights provided in Section 12 of the Plan.
(f) The Corporation’s Obligations. The Corporation will not be obligated to deliver any shares of Common Stock until they have been listed (or authorized for listing upon official notice of issuance) upon each stock exchange upon which outstanding shares of Common Stock at the time are listed or until there has been compliance with such laws or regulations as the Corporation may deem applicable. The Corporation will use its best efforts to effect such listing and compliance. No fractional shares of Common Stock will be delivered.
(g) No Rights to Continue Status. Nothing contained in the Plan will affect the right of the Corporation to cause the Participant to incur a Separation from Service at any time or for any reason.
(h) ERISA. Notwithstanding any language in the Plan to the contrary, no deferral will be permitted under the Plan if it will result in the Plan becoming an “employee benefit plan” under Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). The Plan is not intended to constitute an employee benefit plan subject to ERISA.
(i) Clawback. An Award agreement may provide that the Committee may cancel such Award if the participant has engaged in or engages in activity that is in conflict with or adverse to the interest of the Corporation while employed by or providing services to the Corporation or any subsidiary, including fraud or conduct contributing to any financial restatements or irregularities. The Committee may also provide in an Award agreement that in such event, the participant will forfeit any compensation, gain or other value realized thereafter on the vesting, exercise or settlement of such Award, the sale or other transfer of such Award, or the sale of shares of Common Stock acquired in respect of such Award, and must promptly repay such amounts to the Corporation. The Committee may also provide in an Award agreement that if the participant receives any amount in excess of what the participant should have received under the terms of the Award for any reason (including without limitation by reason of a financial restatement, mistake in calculations or other administrative error), then the participant shall be required to promptly repay any such excess amount to the Corporation. Furthermore, to the extent required by applicable law (including, without limitation, Section 304 of the Sarbanes-Oxley Act and Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act) and/or the rules and regulations of NYSE or any other securities exchange or inter-dealer quotation service on which the Common Stock is listed or quoted, or if so required pursuant to a written policy adopted by the Corporation, Awards shall be subject (including on a retroactive basis) to clawback, forfeiture or similar requirements..
(j) Compliance with Laws. Notwithstanding anything contained herein to the contrary, the Corporation shall not be required to sell, issue or deliver shares of Common Stock hereunder or thereunder if the sale, issuance or delivery thereof would constitute a violation by the Participant or the Corporation of any provision of any law or regulation of any governmental authority (including the Securities Act of 1933, as amended) or any national securities exchange; and as a condition of any sale or issuance the Corporation may require such agreements or undertakings, if any, as it may deem necessary or advisable to assure compliance with any such law or regulation, including but not limited to Code Section 409A.
(k) Unfunded Status of the Plan. The Plan is intended to constitute an unfunded and unsecured plan for incentive compensation. With respect to any payments not yet made to a Participant by the Corporation, nothing contained herein shall give any such Participant any rights that are greater than those of a general creditor of the Corporation. In its sole discretion, the Committee may authorize the creation of trusts or other arrangements to meet the obligations created under the Plan to deliver the shares of Common Stock or payments in lieu of or with respect to Awards hereunder; provided, however, that the existence of such trusts or other arrangements is consistent with the unfunded status of the Plan.
(l) Nature of Payments. All Awards made pursuant to the Plan are in consideration of services performed or to be performed for the Corporation or any Subsidiary, division or business unit of the Corporation or a Subsidiary. Any income or gain realized pursuant to Awards under the Plan constitutes a special incentive payment to the Participant and shall not be taken into account, to the extent permissible under applicable law, as compensation for purposes of any of the employee benefit plans of the Corporation or any Subsidiary except as may be determined by the Committee or by the Board or board of directors of the applicable Subsidiary (or as may be required by the terms of such plan).
(m)Other Plans. Nothing contained in the Plan shall prevent the Board from adopting other or additional compensation arrangements, subject to stockholder approval if such approval is required pursuant to law or the applicable requirements of any stock exchange; and such arrangements may be either generally applicable or applicable only in specific cases.
(n)Severability. The provisions of the Plan shall be deemed severable. If any provision of the Plan shall be held unlawful or otherwise invalid or unenforceable in whole or in part by a court of competent jurisdiction or by reason of change in a law or regulation, such provision shall (a) be deemed limited to the extent that such court of competent jurisdiction deems it lawful, valid and/or enforceable and as so limited shall remain in full force and effect, and (b) not affect any other provision of the Plan or part thereof, each of which shall remain in full force and effect. If the making of any payment or the provision of any other benefit required under the Plan shall be held unlawful or otherwise invalid or unenforceable by a court of competent jurisdiction or any governmental regulatory agency, or impermissible under the rules of any securities exchange on which the shares of Common Stock are listed, such unlawfulness, invalidity, unenforceability or impermissibility shall not prevent any other payment or benefit from being made or provided under the Plan, and if the making of any payment in full or the provision of any other benefit required under the Plan in full would be unlawful or otherwise invalid or impermissible, then such unlawfulness, invalidity or impermissibility shall not prevent such payment or benefit from being made or provided in part, to the extent that it would not be unlawful, invalid or impermissible and the maximum payment or benefit that would not be unlawful, invalid or impermissible shall be made or provided under the Plan.
(o) Forfeiture Events. Any Award held by a Participant whose Separation from Service is due to a discharge for Cause shall be forfeited. The Committee may specify in an Award that a Participant’s rights, payments and benefits with respect to an Award shall be subject to reduction, forfeiture or recoupment upon the occurrence of certain other events (in addition to applicable vesting conditions of an Award). Such events may include, without limitation, breach of non-competition, non-solicitation, confidentiality, or other restrictive covenants that are contained in the Award or otherwise applicable to the Participant, or other conduct by the Participant that is detrimental to the business or reputation of the Corporation.
(p) Acceleration of Exercisability and Vesting. The Committee, or the Grant Committee, as applicable, shall have the power to accelerate the time at which an Award may first be exercised or the time during which an Award or any part thereof will vest in accordance with the Plan, notwithstanding the provisions in the Award stating the time at which it may first be exercised or the time during which it will vest. For the sake of clarity, the Committee, or the Grant Committee, may provide in the applicable Award Agreement that part and/or all of the Award shall be accelerated upon the occurrence of certain pre-determined events and/or conditions, such as a Change in Control.
(q) Governing Law. The law of the State of New York shall govern all questions concerning the construction, validity and interpretation of the Plan.
17. | Transfers and Leaves of Absence |
AbsenceFor purposes of the Plan: (a) a transfer of a Participant’s employment, transfer as a director or transfer as an independent contractor without an intervening period from the Corporation to a Subsidiary or another entity in which the Corporation owns, directly or indirectly, an equity interest or vice versa, or from one Subsidiary or another entity in which the Corporation owns, directly or indirectly, an equity interest to another, or vice versa, will not be deemed a Separation from Service and such Participant will be deemed to remain in the employ of the Corporation, to remain a director of the Corporation or to remain an independent contractor of the Corporation, and (b) a Participant who is granted in writing a leave of absence will be deemed to have remained in the employ of the Corporation, remained as a director of the Corporation, or remained as an independent contractor to the Corporation. Notwithstanding the foregoing, to the extent that an Award is subject to the rules of Code Section 409A and such award is payable upon a Separation from Service, then, except as otherwise provided by the Committee in the applicable Award, a Separation from Service will be deemed to have occurred with respect to a Participant when such Participant incurs a “separation from service” as that term is defined in Code Section 409A. For this purpose, the Corporation is making an election under Treasury Regulation § 1.409A-1(h)(3) such that a “separation from service” will not be deemed to occur to the extent that the Corporation owns, directly or indirectly, an equity interest (or vice versa) of at least 20% in such Subsidiary or other entity to which the Participant is transferred (as determined pursuant to Code Sections 414(b), 414(c), and 1563(a), and Treasury Regulation § 1.414(c)-2)).
18. Corporate Changes, Divestitures and Plan Termination
| (a) | Corporate Changes. If there is a merger, consolidation, stock or other non-cash dividend, extraordinary cash dividend, split-up, spin-off, combination or exchange of shares, reorganization or recapitalization or change in capitalization, or any other similar corporate event, the Committee shall make such equitable adjustments and take such actions as applicable under the circumstances. Such equitable adjustments as they relate to outstanding Awards shall be required to ensure that the intrinsic value of each outstanding Award immediately after any of the adjustments in, or affecting the shares of Common Stock, is equal to the intrinsic value of each outstanding Award immediately prior to any of the adjustments. Such adjustments and actions shall include, as applicable, changes in: (i) the aggregate number of shares of Common Stock subject to the Plan and the number of shares of Common Stock that may be made subject to Awards to any individual Participant as well as the aggregate number of shares of Common Stock that may be made subject to any type of Award; (ii) the number and kind of shares of Common Stock that are subject to any Option (including any Option outstanding after Separation from Service) and the Option price per share without any change in the aggregate Option price to be paid for the Option upon exercise of the Option; (iii) the number and kind of SARs granted or that may be granted under the Plan; (iv) the number and kind of shares of outstanding Restricted Stock; (v) the number and kind of shares of Common Stock covered by Stock Units, Performance Awards, Other Stock-Based Awards or Phantom Stock; and (vi) the number of outstanding dividend equivalents, as the Committee will deem appropriate in the circumstances. The determination by the Committee as to the terms of any such adjustments will be final, conclusive and binding. |
| (b) | Divestitures. In the case of a Participant whose principal employer is a Subsidiary, he or she serves as a director on a Subsidiary’s board of directors or he or she provides services to a Subsidiary as an independent contractor, then such Participant will be deemed to have incurred a Separation from Service for purposes of Awards as of the date on which such Subsidiary ceases to be a Subsidiary (the “Divestiture Date”) and, except to the extent otherwise determined by the Committee and set forth in the applicable Award, with respect to Awards held by such Participant, the vesting schedule will be deemed satisfied as of the Divestiture Date, but only as to that portion of such Award as is equivalent to the portion of the vesting schedule applicable to the Award that has been satisfied |
ORMAT TECHNOLOGIES, INC. | 2024 PROXY STATEMENT 100
| | as of the Divestiture Date without regard to this Section 18(b); as of the Divestiture Date, the portion of the Award as to which the vesting schedule is deemed satisfied pursuant to this Section 18(b) will become nonforfeitable and Plan Terminationthe other portion of the Award as to which the vesting schedule has not been satisfied will be forfeited. Payments under Awards, if any, will be determined in accordance with the provisions of Section 14 of the Plan. Notwithstanding the foregoing, to the extent that an Award is subject to the rules of Code Section 409A, then, except as otherwise provided by the Committee in the applicable Award, the Award shall not become payable on the Divestiture Date unless the divestiture of the applicable Subsidiary separately satisfies the definition of a “change in control event” (as defined in Treasury Regulation § 1.409A-3(i)(5)(i), and as set forth in Treasury Regulation § 1.409A-3(i)(5)(v)-(vii), applying the default rules and percentages set forth in such regulation) with respect to that Subsidiary. |
(a) Corporate Changes. If there is a merger, consolidation, stock or other non-cash dividend, extraordinary cash dividend, split-up, spin-off, combination or exchange of shares, reorganization or recapitalization or change in capitalization, or any other similar corporate event, the Committee shall make such equitable adjustments19. Amendment and take such actions as applicable under the circumstances. Such equitable adjustments as they relate to outstanding Awards shall be required to ensure that the intrinsic value of each outstanding Award immediately after any of the adjustments in, or affecting the shares of Common Stock, is equal to the intrinsic value of each outstanding Award immediately prior to any of the adjustments. Such adjustments and actions shall include, as applicable, changes in: (i) the aggregate number of shares of Common Stock subject to the Plan and the number of shares of Common Stock that may be made subject to Awards to any individual Participant as well as the aggregate number of shares of Common Stock that may be made subject to any type of Award; (ii) the number and kind of shares of Common Stock that are subject to any Option (including any Option outstanding after Separation from Service) and the Option price per share without any change in the aggregate Option price to be paid for the Option upon exercise of the Option; (iii) the number and kind of SARs granted or that may be granted under the Plan; (iv) the number and kind of shares of outstanding Restricted Stock; (v) the number and kind of shares of Common Stock covered by Stock Units, Performance Awards, Other Stock-Based Awards or Phantom Stock; and (vi) the number of outstanding dividend equivalents, as the Committee will deem appropriate in the circumstances. The determination by the Committee as to the terms of any such adjustments will be final, conclusive and binding.
(b) Divestitures. In the case of a Participant whose principal employer is a Subsidiary, he or she serves as a director on a Subsidiary’s board of directors or he or she provides services to a Subsidiary as an independent contractor, then such Participant will be deemed to have incurred a Separation from Service for purposes of Awards as of the date on which such Subsidiary ceases to be a Subsidiary (the “Divestiture Date”) and, except to the extent otherwise determined by the Committee and set forth in the applicable Award, with respect to Awards held by such Participant, the vesting schedule will be deemed satisfied as of the Divestiture Date, but only as to that portion of such Award as is equivalent to the portion of the vesting schedule applicable to the Award that has been satisfied as of the Divestiture Date without regard to this Section 18(b); as of the Divestiture Date, the portion of the Award as to which the vesting schedule is deemed satisfied pursuant to this Section 18(b) will become nonforfeitable and the other portion of the Award as to which the vesting schedule has not been satisfied will be forfeited. Payments under Awards, if any, will be determined in accordance with the provisions of Section 14 of the Plan. Notwithstanding the foregoing, to the extent that an Award is subject to the rules of Code Section 409A, then, except as otherwise provided by the Committee in the applicable Award, the Award shall not become payable on the Divestiture Date unless the divestiture of the applicable Subsidiary separately satisfies the definition of a “change in control event” (as defined in Treasury Regulation § 1.409A-3(i)(5)(i), and as set forth in Treasury Regulation § 1.409A-3(i)(5)(v)- (vii), applying the default rules and percentages set forth in such regulation) with respect to that Subsidiary.
Termination19. | (a) | Amendment. The Board of Directors has the power to amend the Plan, including the power to change the amount of the aggregate Fair Market Value of the shares of Common Stock subject to Incentive Stock Options first exercisable in any calendar year under Section 5 of the Plan to the extent provided in Code Section 422, or any successor Code provision. The Board of Directors will not, however, except as otherwise provided in the Plan, without approval of the stockholders of the Corporation, change the class of Eligible Individuals, nor increase the maximum number of shares of Common Stock authorized for the Plan, nor reduce the basis upon which the minimum Option price is determined, nor extend the period within which Awards under the Plan may be granted, nor provide for an Option or SAR that is exercisable more than ten years from the date it is granted except if the Participant dies, nor amend Section 5(g). The Board of Directors will have no power to change the terms of any Award previously granted under the Plan so as to impair the rights of a Participant without the consent of the Participant whose rights would be affected by such change except to the extent, if any, provided in the Plan or in the Award or except to the extent that the Board of Directors determines that such amendment is desirable or appropriate to comply with the requirements of Code Section 409A. |
| (b) | Termination. The Board of Directors may suspend or terminate the Plan at any time. No such suspension or termination will affect Awards then outstanding. |
| (c) | Successor Corporations. The obligations of the Corporation under the Plan shall be binding upon any successor corporation or organization resulting from the merger, consolidation or other reorganization of the Corporation, or upon any successor corporation or organization succeeding to all or substantially all of the assets and Terminationbusiness of the Corporation. |
(a) Amendment. The Board of Directors has the power to amend the Plan, including the power to change the amount of the aggregate Fair Market Value of the shares of Common Stock subject to Incentive Stock Options first exercisable in any calendar year under Section 5 of the Plan to the extent provided in Code Section 422, or any successor Code provision. The Board of Directors will not, however, except as otherwise provided in the Plan, without approval of the stockholders of the Corporation, change the class of Eligible Individuals, nor increase the maximum number of shares of Common Stock authorized for the Plan, nor reduce the basis upon which the minimum Option price is determined, nor extend the period within which Awards under the Plan may be granted, nor provide for an Option or SAR that is exercisable more than ten years from the date it is granted except if the Participant dies, nor amend Section 5(g). The Board of Directors will have no power to change the terms of any Award previously granted under the Plan so as to impair the rights of a Participant without the consent of the Participant whose rights would be affected by such change except to the extent, if any, provided in the Plan or in the Award or except to the extent that the Board of Directors determines that such amendment is desirable or appropriate to comply with the requirements of Code Section 409A.
(b) Termination. The Board of Directors may suspend or terminate the Plan at any time. No such suspension or termination will affect Awards then outstanding
(c) Successor Corporations. The obligations of the Corporation under the Plan shall be binding upon any successor corporation or organization resulting from the merger, consolidation or other reorganization of the Corporation, or upon any successor corporation or organization succeeding to all or substantially all of the assets and business of the Corporation.
20. Foreign Participants
In order to facilitate the making of any Award under the Plan, the Committee may provide for such special terms for Awards to Eligible Individuals who are nationals and/or tax residents of a jurisdiction other than the United States of America, or who are employed outside the United States of America, including without limitation The State of Israel, as the Committee may consider necessary or appropriate to accommodate differences in local law, tax policy or custom of a jurisdiction outside of the United States of America.
21. Withholding Taxes
THE CORPORATION SHALL HAVE THE RIGHT TO MAKE ALL PAYMENTS OR DISTRIBUTIONS PURSUANT TO THE PLAN TO A PARTICIPANT (OR A PERMITTED ASSIGNEE THEREOF) NET OF ANY APPLICABLE FEDERAL, STATE AND LOCAL TAXES REQUIRED TO BE PAID OR WITHHELD AS A RESULT OF (A) THE GRANT OF ANY AWARD, (B) THE EXERCISE OF AN OPTION OR STOCK APPRECIATION RIGHT, (C) THE DELIVERY OF SHARES OF COMMON STOCK OR CASH, (D) THE LAPSE OF ANY RESTRICTIONS IN CONNECTION WITH ANY AWARD OR (E) ANY OTHER EVENT OCCURRING PURSUANT TO THE PLAN. THE CORPORATION OR ANY SUBSIDIARY SHALL HAVE THE RIGHT TO WITHHOLD FROM WAGES OR OTHER AMOUNTS OTHERWISE PAYABLE TO A PARTICIPANT (OR PERMITTED ASSIGNEE) SUCH WITHHOLDING TAXES AS MAY BE REQUIRED BY LAW, OR TO OTHERWISE REQUIRE THE PARTICIPANT (OR PERMITTED ASSIGNEE) TO PAY SUCH WITHHOLDING TAXES. IF THE PARTICIPANT (OR PERMITTED ASSIGNEE) SHALL FAIL TO MAKE SUCH TAX PAYMENTS AS ARE REQUIRED, THE CORPORATION OR ITS SUBSIDIARIES SHALL, TO THE EXTENT PERMITTED BY LAW, HAVE THE RIGHT TO DEDUCT ANY SUCH TAXES FROM ANY PAYMENT OF ANY KIND OTHERWISE DUE TO SUCH PARTICIPANT (OR PERMITTED ASSIGNEE) OR TO TAKE SUCH OTHER ACTION AS MAY BE NECESSARY TO SATISFY SUCH WITHHOLDING OBLIGATIONS. THE COMMITTEE SHALL BE AUTHORIZED TO ESTABLISH PROCEDURES FOR ELECTION BY PARTICIPANTS (OR PERMITTED ASSIGNEE) TO SATISFY SUCH OBLIGATION FOR THE PAYMENT OF SUCH TAXES BY TENDERING PREVIOUSLY ACQUIRED SHARES OF COMMON STOCK (EITHER ACTUALLY OR BY ATTESTATION, VALUED AT THEIR THEN FAIR MARKET VALUE), OR BY DIRECTING THE CORPORATION TO RETAIN SHARES OF COMMON STOCK (UP TO THE MINIMUM REQUIRED TAX WITHHOLDING RATE FOR THE PARTICIPANT (OR PERMITTED ASSIGNEE) OR SUCH OTHER RATE AS PERMITTED BY THE COMMITTEE THAT WILL NOT CAUSE AN ADVERSE ACCOUNTING OR TAX CONSEQUENCE OR COST) OTHERWISE DELIVERABLE IN CONNECTION WITH THE AWARD.
ORMAT TECHNOLOGIES, INC. | 2024 PROXY STATEMENT 101
22. Indemnity
NO MEMBER OF THE BOARD OF DIRECTORS OF THE CORPORATION OR THE COMMITTEE OR ANY EMPLOYEE OF THE FIRM (EACH SUCH PERSON, A “COVERED PERSON”) SHALL HAVE ANY LIABILITY TO ANY PERSON (INCLUDING ANY PARTICIPANT) FOR ANY ACTION TAKEN OR OMITTED TO BE TAKEN OR ANY DETERMINATION MADE IN GOOD FAITH WITH RESPECT TO THE PLAN OR ANY AWARD. TO THE EXTENT ALLOWABLE PURSUANT TO APPLICABLE LAW, EACH MEMBER OF THE COMMITTEE OR OF THE BOARD AND ANY PERSON TO WHOM THE COMMITTEE HAS DELEGATED ANY OF ITS AUTHORITY UNDER THE PLAN SHALL BE INDEMNIFIED AND HELD HARMLESS BY THE CORPORATION FROM ANY LOSS, COST, LIABILITY, OR EXPENSE THAT MAY BE IMPOSED UPON OR REASONABLY INCURRED BY SUCH PERSON IN CONNECTION WITH OR RESULTING FROM ANY CLAIM, ACTION, SUIT, OR PROCEEDING TO WHICH HE OR SHE MAY BE A PARTY OR IN WHICH HE OR SHE MAY BE INVOLVED BY REASON OF ANY ACTION OR FAILURE TO ACT PURSUANT TO THE PLAN AND AGAINST AND FROM ANY AND ALL AMOUNTS PAID BY HIM OR HER IN SATISFACTION OF JUDGMENT IN SUCH ACTION, SUIT, OR PROCEEDING AGAINST HIM OR HER; PROVIDED HE OR SHE GIVES THE CORPORATION AN OPPORTUNITY, AT ITS OWN EXPENSE, TO HANDLE AND DEFEND THE SAME BEFORE HE OR SHE UNDERTAKES TO HANDLE AND DEFEND IT ON HIS OR HER OWN BEHALF. THE FOREGOING RIGHT OF INDEMNIFICATION SHALL NOT BE EXCLUSIVE OF ANY OTHER RIGHTS OF INDEMNIFICATION TO WHICH SUCH PERSONS MAY BE ENTITLED PURSUANT TO THE CORPORATION’S CERTIFICATE OF INCORPORATION OR BY-LAWS, AS A MATTER OF LAW, OR OTHERWISE, OR ANY POWER THAT THE CORPORATION MAY HAVE TO INDEMNIFY THEM OR HOLD THEM HARMLESS.
23. Effective Date
The Corporation shall have the right to make all payments or distributions pursuant to the Plan to a Participant (or a Permitted Assignee thereof) net of any applicable federal, stateas amended and local taxes required to be paid or withheld as a result of (a) the grant of any Award, (b) the exercise of an Option or Stock Appreciation Right, (c) the delivery of shares of Common Stock or cash, (d) the lapse of any restrictions in connection with any Award or (e) any other event occurring pursuant to the Plan. The Corporation or any Subsidiary shall have the right to withhold from wages or other amounts otherwise payable to a Participant (or Permitted Assignee) such withholding taxes as may be required by law, or to otherwise require the Participant (or Permitted Assignee) to pay such withholding taxes. If the Participant (or Permitted Assignee) shall fail to make such tax payments as are required, the Corporation or its Subsidiaries shall, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to such Participant (or Permitted Assignee) or to take such other action as may be necessary to satisfy such withholding obligations. The Committee shall be authorized to establish procedures for election by Participants (or Permitted Assignee) to satisfy such obligation for the payment of such taxes by tendering previously acquired shares of Common Stock (either actually or by attestation, valued at their then Fair Market Value), or by directing the Corporation to retain shares of Common Stock (up to the minimum required tax withholding rate for the Participant (or Permitted Assignee) or such other rate as permittedrestated was adopted by the Committee that will not cause an adverse accounting or tax consequence or cost) otherwise deliverable in connection with the Award.
No memberBoard as of the board of directors of the Corporation or the Committee or any employee of the Firm (each such person, a “Covered Person”)April 7, 2022 March 12, 2024and shall have any liability to any person (including any Participant) for any action taken or omitted to be taken or any determination made in good faith with respect to the Plan or any Award. To the extent allowable pursuant to applicable law, each member of the Committee or of the Board and any person to whom the Committee has delegated any of its authority under the Plan shall be indemnified and held harmless by the Corporation from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by such person in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action or failure to act pursuant to the Plan and against and from any and all amounts paid by him or her in satisfaction of judgment in such action, suit, or proceeding against him or her; provided he or she gives the Corporation an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled pursuant to the Corporation’s Certificate of Incorporation or By-laws, as a matter of law, or otherwise, or any power that the Corporation may have to indemnify them or hold them harmless.
The Plan will bebecome effective at January 31, 2018, provided any awards hereunder shall be conditional upon approval of the stockholders of the Corporation of this Plan at a duly called meeting for that purpose.
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purpose (the “Effective Date”).ORMAT TECHNOLOGIES, INC.
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 7, 2018
THIS| 2024 PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
STATEMENT 102The undersigned hereby appoints Isaac Angel, CEO, and Etty Rosner, Vice President and Corporate Secretary, and each of them, as proxies, each with full power of substitution and resubstituting, to represent and vote as designated on the reverse side, all the shares of Common Stock of Ormat Technologies, Inc. held of record by the undersigned on March 22, 2018 at the Annual Meeting of Stockholders to be held at the Millennium Conference Center, 145 West 44th Street, New York, NY, 10036 on May 7 2018, or any adjournment or postponement thereof.
(Continued and to be signed on the reverse side)
ANNUAL MEETING OF STOCKHOLDERS OF
ORMAT TECHNOLOGIES, INC.
May 7, 2018
NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIAL:
The proxy statement and annual report to security holders are available at
http://materials.proxyvote.com/686688
Please sign, date and mail
your proxy card in the
envelope provided as soon
as possible.
↓ Please detach along perforated line and mail in the envelope provided. ↓
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF DIRECTORS AND "FOR" PROPOSAL 2, 3, and 4.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENVELOPE PROVIDED. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE ☒
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To change the address on your account, please check the box at right and indicate your new address in the address space above. Please note that changes to the registered name(s)contents on the account mayreferenced website are not be submitted viapart of or otherwise incorporated by reference into this method.
| ☐ | | | | | | | | | Proxy Statement. | |
Note:Back to Contents | | Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person.
As we reflect on 20 years of trading on the NYSE, I am proud of what we have accomplished, and am particularly proud of the Company’s continued growth in developing and providing geothermal, storage and other renewable resources across the globe. As a market leader in the geothermal industry, Ormat’s efforts and successes have contributed to the deeper development of clean, renewable energy production, globally. 
