TABLE OF CONTENTS
37 i XL FLEET CORP.Table of Contents
SPRUCE POWER HOLDING CORPORATION
1875 Lawrence Street, Suite 320
Denver, Colorado 80202 145 Newton Street
Boston, Massachusetts 02135
PROXY STATEMENT FOR THE XL FLEET CORP. SPRUCE POWER HOLDING CORPORATION
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 26, 2021 25, 2023 This proxy statement, along with the accompanying notice of 20212023 annual meeting of stockholders, contains information about the 20212023 annual meeting of stockholders of XL Fleet Corp.Spruce Power Holding Corporation (the “Annual Meeting”), including any adjournments or postponements of the Annual Meeting. We are holding the Annual Meetingannual meeting at 9:10:00 a.m. ET,, Eastern Time, on Wednesday,Thursday, May 26, 2021.25, 2023. You will not be able to physically attend the Annual Meeting.annual meeting in person. As a result of the public health and travel risks and concerns due to COVID-19, theThe Annual Meeting will be a virtual meeting via live audio webcast on the Internet.internet. You will be able to attend the Annual Meeting,annual meeting, vote and submit your questions during the meeting by visiting https://www.cstproxy.com/xlfleet/2021www.virtualshareholdermeeting.com/SPRU2023 and entering the 12-digit12-digit control number included in the Notice of Internet Availabilityproxy card that you receive. For further information about the virtual Annual Meeting,annual meeting, please see the Questions and Answers about the Meeting beginning on page 3. We expect to resume in personbelieve that holding annual stockholder meetings in future years.
virtually creates responsible custodianship of resources, and maximizes the number of stockholders who may wish to attend the annual meeting. In this proxy statement, we refer to XL Fleet Corp.Spruce Power Holding Corporation as “XL Fleet,” “the Company,the “Company,” “we,” “us” and “our.” Spruce Holding Company 1 LLC, Spruce Holding Company 2 LLC and Spruce Holding Company 3 LLC, which were acquired by the Company on September 9, 2022, are collectively referred to in this proxy statement as “Spruce Power.” This Proxy Statement and the accompanying proxy statement relates to the solicitation of proxies by our board of directors for use at the Annual Meeting. Oncard are being mailed on or about April 16, 2021, we intend to begin sending to our stockholders the Important Notice Regarding the Availability of Proxy Materials containing instructions on how to access our proxy statement for the Annual Meeting and our 2020 annual report to stockholders.20, 2023.
1 Table of Contents IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR
FOR THE ANNUALSTOCKHOLDER MEETING OF STOCKHOLDERS TO BE HELD ON MAY 26, 202125, 2023 This proxy statement, the Notice of Annual Meeting of Stockholders, our form of proxy card and our 20212022 annual report to stockholders are available for viewing, printing and downloading at https://www.cstproxy.com/xlfleet/2021.www.ProxyVote.com. To view these materials please have your 12-digit12-digit control number(s) available that appears on your Notice or proxy card. On this website, you can also elect to receive future distributions of our proxy statements and annual reports to stockholders by electronic delivery. Additionally, you can find a copy of our Annual Report on Form 10-K,10-K, which includes our financial statements for the fiscal year ended December 31, 2020,2022, on the website of the Securities and Exchange Commission, or the SEC, atwww.sec.gov,, or underin the “SEC Filings” tab in the “Financials” section of the “Investors Relations” section of our website at www.xlfleet.com.www.sprucepower.com. You may also obtain a printed copy of our Annual Report on Form 10-K,10-K, including our financial statements, free of charge, from us by sending a written request to: XL Fleet Corp.,Spruce Power Holding Corporation, Attention: Corporate Secretary, 145 Newton1875 Lawrence Street, Boston, Massachusetts 02135.Suite 320, Denver, Colorado 80202. Exhibits will be provided upon written request and payment of an appropriate processing fee. 2 Table of Contents IMPORTANT INFORMATION ABOUT THE ANNUAL MEETING AND VOTING Why is the Company Soliciting My Proxy? Our board of directors is soliciting your proxy to vote at the Annual Meeting to be held virtually, on Wednesday,Thursday, May 26, 2021,25, 2023, at 9:10:00 a.m. ETEastern Time and any adjournments or postponements of the meeting, which we refer to as the annual meeting. This proxy statement, along with the accompanying Notice of Annual Meeting of Stockholders, summarizes the purposes of the meeting and the information you need to know to vote at the Annual Meeting.annual meeting. We have made available to you on the Internet or have sent you this proxy statement, the Notice of Annual Meeting of Stockholders, the proxy card and a copy of our Annual Report on Form 10-K10-K for the fiscal year ended December 31, 20202022 because you owned shares of our common stock on the record date.date, which is April 3, 2023. We intend to commence distribution of the Notice Regarding the Availability of Proxy Materials, which we refer to throughout this proxy statement as the Notice, and, if applicable, proxy materials to stockholders on or about April 16, 2021.20, 2023. Why Did I Receive a Notice in the Mail Regarding the Internet Availability of Proxy Materials Instead of a Full Set of Proxy Materials?
As permitted by the rules of the U.S. Securities and Exchange Commission, or the SEC, we may furnish our proxy materials to our stockholders by providing access to such documents on the Internet, rather than mailing printed copies of these materials to each stockholder. Most stockholders will not receive printed copies of the proxy materials unless they request them. We believe that this process should expedite stockholders’ receipt of proxy materials, lower the costs of the Annual Meeting and help to conserve natural resources. If you received the Notice by mail or electronically, you will not receive a printed or email copy of the proxy materials, unless you request one by following the instructions included in the Notice. Instead, the Notice instructs you as to how you may access and review all of the proxy materials and submit your proxy on the Internet. If you requested a paper copy of the proxy materials, you may authorize the voting of your shares by following the instructions on the proxy card, in addition to the other methods of voting described in this proxy statement.
Why Are You Holding a Virtual Annual Meeting? Due to the continuing public health impact of COVID-19 and to support the health and well-being of our stockholders, the Annual MeetingThis year’s annual meeting will be held in a virtual meeting format only. We have designed our virtual format to enhance, rather than constrain, stockholder access, participation and communication. For example, the virtual format allows stockholders to communicate with us in advance of, and during, the Annual Meetingannual meeting so they can ask questions of our board of directors or management, as time permits. We intend to return toalso believe that holding an in-person Annual Meeting in future years.a virtual meeting creates better stewardship of resources and the environment.
How do I Accessaccess the Virtual Annual Meeting? The live audio webcast of the Annual Meeting will begin promptly at 9:10:00 a.m. ET.Eastern Time. Online access to the audio webcast will open 15 minutes prior to the start of the Annual Meeting to allow time for you to log-inlog-in and test your device’s audio system. The virtual Annual Meeting is running the most updated version of the applicable software and plugins. You should ensure you have a strong Internet connection wherever you intend to participate in the Annual Meeting. You should also allow plenty of time to log in and ensure that you can hear streaming audio prior to the start of the Annual Meeting. To be admitted to the virtual Annual Meeting, you will need to log-inlog-in at https://www.cstproxy.com/xlfleet/2021www.virtualshareholdermeeting.com/SPRU2023 using the 12-digit12-digit control number found on the proxy card or voting instruction card previously mailed or made available to stockholders entitled to vote at the Annual Meeting. Will I be Ableable to Ask Questionsask questions and Have These Questions Answered Duringhave these questions answered during the Virtual Annual Meeting? Stockholders may submit questions for the Annual Meeting after logging in. If you wish to submit a question, you may do so by logging into the virtual meeting platform at https://www.cstproxy.com/xlfleet/2021,www.virtualshareholdermeeting.com/SPRU2023, typing your question into the ‘‘Ask a Question” field, and clicking ‘‘Submit.” Please submit any questions before the start time of the meeting. Appropriate questions related to the business of the Annual Meeting (the proposals being voted on) will be answered during the Annual Meeting, subject to time constraints. Additional information regarding the ability of stockholders to ask questions during the Annual Meeting, related to rules of conduct and other materials for the Annual Meeting will be available at https://www.cstproxy.com/xlfleet/2021.www.ProxyVote.com. What Happens if There Are Technical Difficulties during the Annual Meeting? Beginning 15 minutes prior to, and during, the Annual Meeting, we will have technicians ready to assist you with any technical difficulties you may have accessing the virtual Annual Meeting, voting at the Annual Meeting or submitting questions at the Annual Meeting. If you encounter any difficulties accessing the virtual Annual Meeting during the check-incheck-in or meeting time, please call 1 (888) 965-8995888-965-8995 (toll free) or +1 (415) 655-0243415-655-0243 (international). 3 Table of Contents Who May Vote? Only stockholders of record at the close of business on March 29, 2021April 3, 2023 (the “Record Date”) will be entitled to vote at the Annual Meeting.annual meeting. On this record date, there were 139,105,704148,395,370 shares of our common stock issued and outstanding and entitled to vote. Our common stock is our only class of voting stock. If on the Record Date your shares of our common stock were registered directly in your name with our transfer agent, Continental Stock Transfer & Trust Company,, then you are a stockholder of record. If on the Record Date your shares were held, not in your name, but rather in an account at a brokerage firm, bank, dealer or other similar organization, then you are the beneficial owner of shares held in “street name” and the Noticeproxy is being forwarded to you by that organization. The organization holding your account is considered to be the stockholder of record for purposes of voting at the Annual Meeting.annual meeting. As a beneficial owner, you have the right to direct your broker or other agent regarding how to vote the shares in your account. You are also invited to attend the Annual Meeting.annual meeting. However, since you are not the stockholder of record, you may not vote your shares at the Annual Meetingannual meeting unless you request and obtain a valid proxy from your broker or other agent. You do not need to attend the Annual Meetingannual meeting to vote your shares. Shares represented by valid proxies, received in time for the Annual Meetingannual meeting and not revoked prior to the Annual Meeting,annual meeting, will be voted at the Annual Meeting.annual meeting. For instructions on how to change or revoke your proxy, see “May I Change or Revoke My Proxy?” below. How Many Votes Do I Have? Each share of our common stock that you own entitles you to one vote. How Do I Vote? Whether you plan to attend the Annual Meeting or not, we urge you to vote by proxy. All shares represented by valid proxies that we receive through this solicitation, and that are not revoked, will be voted in accordance with your instructions on the proxy card or as instructed via the Internet or mobile device.telephone. You may specify whether your shares should be voted FOR or WITHHELD for each nominee for director, and whether your shares should be voted for, against or abstain with respect to the ratificationeach of the appointment of Marcum LLP as our independent registered public accounting firm.other proposals. If you properly submit a proxy without giving specific voting instructions, your shares will be voted in accordance with our board of directors’ recommendations as noted below. Voting by proxy will not affect your right to attend the Annual Meeting.annual meeting. Official tabulation of voted proxies will be handled by Broadridge Financial Solutions, who will be present at the annual meeting. If your shares are registered directly in your name through our stock transfer agent, Continental Stock Transfer & Trust Company,, or you have stock certificates registered in your name, you may vote: | · | By Internet. Follow the instructions included in the Notice or, if you received printed materials, in the proxy card to vote over the Internet. |
| · | By mobile device. On your smartphone or tablet, open the QR Reader• By Internet or by telephone. Follow the instructions included in the proxy card to vote over the Internet or by telephone. • By mail. If you received a proxy card by mail, you can vote by mail by completing, signing, dating and returning the proxy card as instructed on the card. If you sign the proxy card but do not specify how you want your shares voted, they will be voted in accordance with our board of directors’ recommendations as noted below. • At the meeting. If you attend the virtual meeting, you may vote by completing a ballot, which will be available at the meeting. Telephone and scan the QR code included in the Notice or proxy card. Once the voting site is displayed on your smartphone or tablet, enter your 12-digit control number from the Notice or proxy card and vote your shares. |
| · | By mail. If you received a proxy card by mail, you can vote by mail by completing, signing, dating and returning the proxy card as instructed on the card. If you sign the proxy card but do not specify how you want your shares voted, they will be voted in accordance with our board of directors’ recommendations as noted below. |
| · | At the meeting. If you attend the virtual meeting, you may vote by completing a ballot, which will be available at the meeting. |
Internet voting facilities for stockholders of record will be available 24 hours a day and will close at 11:59 p.m. Eastern Time on May 25, 2021. If your shares are held in “street name” (held in the name of a bank, broker or other holder of record), you will receive instructions from the holder of record. You must follow the instructions of the holder of record in order for your shares to be voted. Telephone and Internet voting also will be offered to stockholders owning shares through certain banks and brokers. If your shares are not registered in your own name and you plan to vote your shares virtually at the Annual Meeting,annual meeting, you should contact your broker or agent to obtain a legal proxy or broker’s proxy card, and bringbe prepared to use it tofor the Annual Meetingvirtual annual meeting in order to vote. 4 Table of Contents How Does Our Board of Directors Recommend that I Vote on the Proposals? Our board of directors recommends that you vote as follows: | ☐ | “FOR” the election of the nominees for director; and |
| ☐ | “FOR” the ratification of the appointment of Marcum LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2021. |
• “FOR” the election of the nominees for director; • “FOR” the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2023; and • “FOR” the non-binding approval of the total compensation paid to the named executive officers of the Company. If any other matter is presented at the Annual Meeting, your proxy provides that your shares will be voted by the proxy holder listed in the proxy in accordance with his or her best judgment. At the time this proxy statement was first made available, we knew of no matters that needed to be acted on at the Annual Meeting, other than those discussed in this proxy statement. May I Change or Revoke My Proxy? If you give us your proxy, you may change or revoke it at any time before the Annual Meeting. You may change or revoke your proxy in any one of the following ways: | ☐ | if you received a proxy card, by signing a new proxy card with a date later than your previously delivered proxy and submitting it as instructed above; |
| ☐ | by re-voting by Internet or mobile device as instructed above; |
| ☐ | by notifying XL Fleet’s Corporate Secretary in writing before the Annual Meeting that you have revoked your proxy; or |
| ☐ | by attending the Annual Meeting and voting at the meeting. Attending the Annual Meeting will not in and of itself revoke a previously submitted proxy. You must specifically request at the Annual Meeting that it be revoked. |
• if you received a proxy card, by signing a new proxy card with a date later than your previously delivered proxy and submitting it as instructed above; • by re-voting by Internet or by telephone as instructed above; • by notifying our Corporate Secretary in writing before the Annual Meeting that you have revoked your proxy; or • by attending the Annual Meeting and voting at the meeting. Attending the Annual Meeting will not in and of itself revoke a previously submitted proxy. You must specifically request at the Annual Meeting that it be revoked. Your most current vote, whether by telephone, Internet mobile device or proxy card is the one that will be counted. What if I Receive More Than One Notice or Proxy Card? You may receive more than one Notice or proxy card if you hold shares of our common stock in more than one account, which may be in registered form or held in street name. Please vote in the manner described above under “How Do I Vote?” for each account to ensure that all of your shares are voted. Will My Shares be Voted if I Do Not Vote? If your shares are registered in your name or if you have stock certificates, they will not be counted if you do not vote as described above under “How Do I Vote?” If your shares are held in street name and you do not provide voting instructions to the bank, broker or other nominee that holds your shares as described above, the bank, broker or other nominee that holds your shares has the authority to vote your unvoted shares only on the ratification of the appointment of our independent registered public accounting firm (Proposal 2 of this proxy statement) without receiving instructions from you. Therefore, we encourage you to provide voting instructions to your bank, broker or other nominee. This ensures your shares will be voted at the Annual Meetingannual meeting and in the manner you desire. A “broker non-vote”non-vote” will occur if your broker cannot vote your shares on a particular matter because it has not received instructions from you and does not have discretionary voting authority on that matter or because your broker chooses not to vote on a matter for which it does have discretionary voting authority. 5 Table of Contents What Vote is Required to Approve Each Proposal and How are Votes Counted? Proposal 1: Elect Directors | | The nominees for director who receive the most votes (also known as a “plurality” of the votes cast) will be elected. You may vote either FOR all of the nominees, WITHHOLD your vote from all of the nominees or WITHHOLD your vote from any one or more of the nominees. Votes that are withheld will not be included in the vote tally for the election of the directors. Brokerage firms do not have authority to vote customers’ unvoted shares held by the firms in street name for the election of the directors. As a result, any shares not voted by a customer will be treated as a broker non-vote.non-vote. Such broker non-votesnon-votes will have no effect on the results of this vote. | | | Proposal 2: Ratify Appointment
of Independent Registered Public
Accounting Firm | | The affirmative vote of a majority of the votes cast for this proposal is required to ratify the selection of our independent registered public accounting firm. Abstentions will have no effect on the results of this vote. Brokerage firms have authority to vote customers’ unvoted shares held by the firms in street name on this proposal. If a broker does not exercise this authority, such broker non-votesnon-votes will have no effect on the results of this vote. We are not required to obtain the approval of our stockholders to select our independent registered public accounting firm. However, if our stockholders do not ratify the appointment of MarcumDeloitte & Touche LLP as our independent registered public accounting firm for 2021,2023, our audit committeeAudit Committee of our board of directors will reconsider its selection. | Proposal 3: An advisory vote on the total compensation paid to the named executive officers of the Company | | The affirmative vote of a majority of the votes cast for this proposal is required for non-binding approval of the total compensation paid to our named executive officers. Abstentions will have no effect on the results of this vote. Brokerage firms do not have authority to vote customers’ unvoted shares held by the firms in street name on this proposal. If a broker does not exercise this authority, such broker non-votes will have no effect on the results of this vote. Although we are not required to obtain the approval of our stockholders to set the compensation paid to executives of the Company, the Compensation Committee of the Board of Directors will take stockholders’ views into account in setting compensation for future time periods. |
Is Voting Confidential? We will keep all the proxies, ballots and voting tabulations private. We only let our InspectorsInspector of Election, Continental Stock Transfer & Trust Company,Broadridge Financial Solutions, examine these documents. Management will not know how you voted on a specific proposal unless it is necessary to meet legal requirements. We will, however, forward to management any written comments you make on the proxy card or that you otherwise provide. Where Can I Find the Voting Results of the Annual Meeting? The preliminary voting results will be announced at the Annual Meeting,annual meeting, and we will publish preliminary, or final results if available, in a Current Report on Form 8-K8-K within four business days of the Annual Meeting.annual meeting. If final results are unavailable at the time we file the Form 8-K,8-K, then we will file an amended report on Form 8-K8-K to disclose the final voting results within four business days after the final voting results are known. What AreWho Will Pay the Costs of Soliciting these Proxies?
We will pay all of the costs of soliciting these proxies. Our directors and employees may solicit proxies in person or by telephone fax or email. We will pay these employees and directors no additional compensation for these services. We will ask banks, brokers and other institutions, nominees and fiduciaries to forward these proxy materials to their principals and to obtain authority to execute proxies. We will then reimburse them for their expenses. 6 Table of Contents What Constitutes a Quorum for the Annual Meeting? The presence, virtually or by proxy, of the holders of a majority of the voting power of all outstanding shares of our common stock entitled to vote at the Annual Meetingannual meeting is necessary to constitute a quorum at the Annual Meeting.annual meeting. Votes of stockholders of record who are present at the Annual Meetingannual meeting virtually or by proxy, abstentions, and broker non-votesnon-votes are counted for purposes of determining whether a quorum exists. Attending the Annual Meeting The Annual Meeting will be held in a virtual meeting format only. You can attend the Annual Meeting and view the live audio webcast by visiting https://www.cstproxy.com/xlfleet/2021.www.virtualshareholdermeeting.com/SPRU2023. The Annual Meetingannual meeting will be held at 9:10:00 a.m. ETEastern Time on Wednesday,Thursday, May 26, 2021.25, 2023. To attend the virtual Annual Meeting, go to https://www.cstproxy.com/xlfleet/2021www.virtualshareholdermeeting.com/SPRU2023 shortly before the meeting time, and follow the instructions for downloading the webcast. If you miss the Annual Meeting,annual meeting, you can view a replay of the webcast at https://www.cstproxy.com/xlfleet/2021www.virtualshareholdermeeting.com/SPRU2023 until May 26, 2022.24, 2024. You need not attend the Annual Meetingannual meeting in order to vote. Householding of Annual Disclosure Documents Some brokers or other nominee record holders may be sending you a single set of our proxy materials if multiple XL Fleet stockholders live in your household. This practice, which has been approved by the SEC, is called “householding.” Once you receive notice from your broker or other nominee record holder that it will be “householding” our proxy materials, the practice will continue until you are otherwise notified or until you notify them that you no longer want to participate in the practice. Stockholders who participate in householding will continue to have access to and utilize separate proxy voting instructions. We will promptly deliver a separate copy of our Notice or, if applicable, our proxy materials to you if you write or call our Corporate Secretary at: 145 Newton1875 Lawrence Street, Boston, Massachusetts 02135Suite 320, Denver, Colorado 80202 or (617) 586-2930.(866) 903-2399. If you want to receive your own set of our proxy materials in the future or, if you share an address with another stockholder and together both of you would like to receive only a single set of proxy materials, you should contact your broker or other nominee record holder directly or you may contact us at the above address and phone number. Electronic Delivery of Company Stockholder Communications Most stockholdersStockholders can elect to view or receive copies of future proxy materials over the Internet instead of receiving paper copies in the mail.
You can choose this option and save us the cost of producing and mailing these documents by following the instructions provided on your Notice.proxy card. 7 Table of Contents SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table sets forth certain information with respect to the beneficial ownership of our common stock as of April 1, 20213, 2023 for (a) the executive officers named in the Summary Compensation Table on page 1722 of this proxy statement, (b) each of our directors and director nominees, (c) all of our current directors and executive officers as a group and (d) each stockholder known by us to own beneficially more than 5% of our common stock. Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to the securities. We deem shares of our common stock that may be acquired by an individual or group within 60 days of April 1, 20213, 2023 pursuant to the exercise of options or warrants or the lapsingvesting of restricted stock units to be outstanding for the purpose of computing the percentage ownership of such individual or group, but those shares are not deemed to be outstanding for the purpose of computing the percentage ownership of any other person shown in the table. Except as indicated in footnotes to this table, we believe that the stockholders named in this table have sole voting and investment power with respect to all shares of our common stock shown to be beneficially owned by them based on information provided to us by these stockholders. Percentage of ownership is based on 139,105,704148,395,370 shares of our common stock outstanding on April 1, 2021.3, 2023. | | Shares Beneficially Owned | Name and Address | | Number | | Percent | Directors and Named Executive Officers | | | | | Christian Fong(1)(2) | | 728,221 | | * | Kevin Griffin(3) | | 6,477,742 | | 4.3 | Christopher Hayes(1)(4) | | 588,698 | | * | Jonathan J. Ledecky(5) | | 4,870,969 | | 3.2 | John P. Miller(1)(6) | | 165,161 | | * | Eric Tech(1)(7) | | 1,115,537 | | * | Colleen H. Calhoun(1)(8) | | 295,174 | | * | James P. Berklas(1)(9) | | 8,051 | | * | Thomas (Tod) Hynes III(1)(10) | | 7,311,683 | | 5.0 | All directors and current executive officers as a group (10 persons)(11) | | 14,100,355 | | 9.1 | Five Percent Holders: | | | | | James S. Davis(12) | | 11,379,917 | | 7.7 |
| | | Shares Beneficially Owned | | Name and Address | | Number | | Percent | | | | | | | | Directors and Named Executive Officers | | | | | | Declan P. Flanagan (1) | | 0 | | 0% | | Debora M. Frodl (1)(2) | | 363,700 | | * | | Kevin Griffin (3)(4) | | 10,363,333 | | 7.2% | | Christopher Hayes (1)(5) | | 381,873 | | * | | Thomas J. Hynes III (1)(6) | | 7,334,489 | | 5.2% | | Dimitri N. Kazarinoff (1)(7) | | 1,523,061 | | 1.1% | | Jonathan J. Ledecky (4) | | 9,733,333 | | 6.8% | | Niharika Ramdev (1) | | 0 | | 0% | | Sarah Sclarsic (1)(8) | | 50,000 | | * | | James Berklas (1) | | 0 | | 0% | | | | | | | | All directors and current executive officers as a group (10 persons) (9) | | 20,016,456 | | 13.6% | | | | | | | | Five Percent Holders: | | | | | | James S. Davis (10) | | 12,500,803 | | 9.0% | | Pivotal Investment Holdings II LLC (11) | | 9,733,333 | | 6.8% |
| * | Represents beneficial ownership of less than 1% of the outstanding shares of our common stock. |
| (1) | The business address of the stockholder is c/o XL Fleet Corp., 145 Newton Street, Boston, Massachusetts 02135. |
| (2) | Includes options to purchase 363,700 shares of our common stock, which are exercisable within 60 days of April 1, 2021. |
| (3) | Includes 630,000 shares of our common stock held by MGG Investment Group, LP (“MGG”), of which Mr. Griffin is the Chief Executive Officer and Chief Investment Officer. Notwithstanding his dispositive and voting control over such shares, Mr. Griffin disclaims beneficial ownership of the shares of our common stock held by MGG, except to the extent of his proportionate pecuniary interest therein. The business address of each of the individuals is c/o Graubard Miller, The Chrysler Building, 405 Lexington Avenue, 11th Floor, New York, New York 10174. This information is based on a Schedule 13G filed with the SEC by Pivotal Investment Holdings II LLC with the SEC on February 16, 2021 and information available to us. |
| (4) | Includes 5,500,000 shares held by the Pivotal Investment Holdings II LLC, of which each of Ironbound Partners Fund, LLC, an affiliate of Mr. Ledecky, and Pivotal SPAC Funding II LLC, an affiliate of Mr. Griffin, is a managing member. Also includes 4,233,333 shares issuable to Pivotal Investment Holdings II LLC upon the exercise of private placement warrants. Notwithstanding their dispositive and voting control over such shares, each of Messrs. Griffin and Ledecky disclaims beneficial ownership of the shares of our common stock held by Pivotal Investment Holdings II LLC, except to the extent of his respective proportionate pecuniary interest therein. The business address of each of the individuals is c/o Graubard Miller, The Chrysler Building, 405 Lexington Avenue, 11th Floor, New York, New York 10174. This information is based on a Schedule 13G filed with the SEC by Pivotal Investment Holdings II LLC with the SEC on February 16, 2021 and information available to us. |
| (5) | Includes options to purchase 381,873 shares, which are excisable within 60 days of April 1, 2021. |
| (6) | Includes 6,181,461 shares and options to purchase an additional 1,153,028 shares, which are excisable within 60 days of April 1, 2021. |
| (7) | Includes 15,346 shares and options to purchase an additional 1,507,715 shares, which are excisable within 60 days of April 1, 2021. |
| (8) | Includes 50,000 shares which are excisable within 60 days of April 1, 2021. |
| (9) | See footnotes (2) – (8) above. |
8 Table of Contents Insider Trading, Anti-Hedging and Anti-Pledging Our Board has adopted an Insider Trading Policy governing stock trading and prohibiting insider trading, which applies to all of our directors, officers and employees. The policy contains various restrictions on transactions in our stock by our directors, officers and employees and requires all such trades to be pre-cleared and may only occur during permitted periods (based on, for example, the timing of the release of our quarterly or annual financial results, or during periods when the director, officer or employee is not acting on non-public material information). We also consider it improper and inappropriate for our directors, officers and employees to engage in short-term or speculative transactions in our securities. Our policy has prohibitions on short-term trading, short sales, publicly traded options, hedging transactions and margin accounts and pledges. No named executive officer has entered into any such prohibited transaction. | (10) | Includes 12,500,803 shares held of record by Mr. Davis. The business address of the stockholder is 145 Newton Street, Boston, Massachusetts 02135. This information is based solely on a Schedule 13G filed with the SEC by Mr. Davis with the SEC on December 29, 2020, which reported ownership as of December 21, 2020. |
| (11) | Includes 5,500,000 shares held by the Pivotal Investment Holdings II LLC, of which each of Ironbound Partners Fund, LLC, an affiliate of Mr. Ledecky, and Pivotal SPAC Funding II LLC, an affiliate of Mr. Griffin, is a managing member. Also includes 4,233,333 shares issuable to Pivotal Investment Holdings II LLC upon the exercise of private placement warrants. Notwithstanding their dispositive and voting control over such shares, each of Messrs. Griffin and Ledecky disclaims beneficial ownership of the shares of our common stock held by Pivotal Investment Holdings II LLC, except to the extent of his respective proportionate pecuniary interest therein. The business address of the stockholder is c/o Graubard Miller, The Chrysler Building, 405 Lexington Avenue, 11th Floor, New York, New York 10174. This information is based on a Schedule 13G filed with the SEC by Pivotal Investment Holdings II LLC with the SEC on February 16, 2021 and information available to us. |
MANAGEMENT AND CORPORATE GOVERNANCE Our Executive Officers The executive officers of the Company as of the date of this proxy statement are as follows: Name | | Age | | Principal Occupation During the Past Five Years | Christian Fong | | 46 | | Chief Executive Officer of the Company since February 2023 and President and a director of the Company since September 2022; prior thereto, Chief Executive Officer of Spruce Power, prior to its acquisition by the Company, from April 2018 to September 2022, also serving as board chair during this period. Mr. Fong served as a director of Terraform Power, Inc. from October 2017 to July 2020. | Donald Klein | | 49 | | Chief Financial Officer of the Company since April 2022. Prior thereto, Chief Financial Officer of Power Solutions International Inc., a publicly traded company and leader in the design, engineering and manufacture of a broad range of advanced, emission-certified engines and power systems, from January 2021 to April 2022, Interim Chief Financial Officer of Power Solutions International Inc. from July 2020 to January 2021 and Principal Accounting Officer of Power Solutions International Inc. from May 2018 to July 2020. Prior to his service at Power Solutions International Inc., Assistant Corporate Controller at Littelfuse, Inc. (NASDAQ: LFUS), a publicly traded company focused on the electronics, automotive and industrial markets, from January 2017 to May 2018. Prior to that role, from 2008 to 2017, served in various positions of increasing responsibility within finance and accounting, including most recently as Assistant Corporate Controller, at Navistar International Corporation, a NYSE-listed global manufacturer of commercial and military trucks, school buses, diesel engines and provider of service parts for trucks and diesel engines. Prior to Navistar, he worked for Hewitt Associates as Manager of External Reporting and at Ernst & Young LLP as a senior manager of assurance and advisory services. | Stacey Constas | | 56 | | General Counsel of the Company since May 2022; prior thereto, Associate General Counsel of the Company from February 2022 to May 2022. Prior to joining the Company, Associate General Counsel of Standex International Corporation and General Counsel of the Electronics Group of Standex International Corporation, a global diversified manufacturer, from 1998 to February, 2022. | Sarah Weber Wells | | 45 | | Senior Vice President, Finance and Accounting, and Head of Sustainability of the Company since February 2023; prior thereto Chief Financial Officer of Spruce Power from May 2022 to February 2023. Prior to joining Spruce Power, Finance Manager of Cornerstone Building Brands, a building products manufacturer, from November 2013 to November 2018. | Jonathan M. Norling | | 54 | | Chief Legal Officer of the Company since February 2023; prior thereto General Counsel of Spruce Power from January 2019 to February 2023, Deputy General Counsel of Spruce Power from January 2018 to January 2019, and Interim General Counsel of Spruce Power from July 2017 to January 2018. |
There are no family relationships or other arrangements or understandings (as defined under applicable SEC regulations) among any of the directors or executive officers of the Company. 10 Table of Contents Our Board of Directors Our charterDelaware law provides that our business is to be managed by or under the direction of our board of directors. Our board of directors is divided into three classes for purposes of election. One classDue to the retirement of one director and the resignation of another in December 2022, our three classes had become unbalanced; thus it is electednecessary at eachthis annual meeting of stockholders to serve for a three-year term.reconfigure the classes in order to create equal balance among all director classes. Our board of directors currently consists of 96 members, three of whom are nominated for election at the Annual Meeting. The board is currently classified into three classes as follows: (A) Debora M. Frodl, DeclanJohn P. FlanaganMiller (who was appointed as a director by the board on March 4, 2022) and Sarah SclarsicEric Tech (who is moving into this class in order to create balanced director classes) constitute a class with a term ending at the 20212024 annual meeting; (B) Kevin Griffin and Christopher Hayes and Niharika Ramdev constitute a class with a term ending at the 20222025 annual meeting; and (C) Thomas J. Hynes III, Dimitri N. Kazarinoff and Jonathan J. Ledecky and Christian Fong (who was appointed as a director by the board on September 9, 2022) constitute a class with a term ending at the 2023 annual meeting.
On February 26, 2021, our board of directors accepted the recommendation of the Nominating Committee and voted to nominate Debora M. Frodl, Declan P. Flanagan and Sarah Sclarsic for election at the Annual Meeting for a term of three years to serve until the 2024 annual meeting of stockholders, and until their respective successors have been elected and qualified.Meeting.
Set forth below are the names of the persons nominated for election as directors and those directors whose terms do not expire this year, their ages, their offices in the Company, if any, their principal occupations or employment for at least the past five years, the length of their tenure as directors and the names of other public companies in which such persons hold or have held directorships during the past five years as of April 15, 2021.years. Additionally, information about the specific experience, qualifications, attributes or skills that led to our board of directors’ conclusion at the time of filing of this proxy statement that each person listed below should serve as a director is set forth below: Name | | Age | | Position with the Company | Debora M. FrodlKevin Griffin | | 5546 | | Director | Christopher Hayes | | 49 | | Chair of the Board | Declan P. FlanaganJonathan J. Ledecky | | 4665 | | Director | Kevin GriffinJohn P. Miller | | 4465 | | Director | Christopher HayesEric Tech | | 4759 | | Director | Thomas J. Hynes IIIChristian Fong | | 4146 | | President, Director | Dimitri N. Kazarinoff | | 56 | | Chief Executive Officer and Director | Jonathan J. Ledecky | | 63 | | Director | Niharika Ramdev | | 51 | | Director | Sarah Sclarsic | | 37 | | Director |
Our board of directors has reviewed the materiality of any relationship that each of our directors has with XL Fleet,the Company, either directly or indirectly. Based upon this review, our board of directors has determined that the following members of our board of directors are “independent directors” as defined by New York Stock Exchange: Debora M. Frodl, Declan P. Flanagan, Kevin Griffin, Christopher Hayes, Jonathan J. Ledecky Niharika Ramdev and Sarah Sclarsic.John P. Miller. Dimitri N. Kazarinoff has served as our Chief Executive Officer and a member of our board of directors since December 2020. Mr. Kazarinoff has served as Chief Executive Officer and President and as a member of the board of directors of XL Hybrids, Inc., a wholly owned subsidiary of the Company (“XL Hybrids”), since October 2019. Mr. Kazarinoff has many years of experience as a transportation industry executive. Prior to his service with XL Fleet, from September 2011 through July 2019, he served as President of AVL Powertrain Engineering, Inc. and from January 2008 through April 2011, he served as the V.P. & GM of Eaton’s Hybrid Power Systems Division. Mr. Kazarinoff holds a BS ME from the Massachusetts Institute of Technology and a Masters of Management degree from the Kellogg Graduate School of Management at Northwestern University.
Thomas J. Hynes, III founded XL Hybrids in 2009 and has served as our President and a member of our board of directors since December 2020. Mr. Hynes has served as Chief Strategy Officer and Treasurer and as a member of the board of directors of XL Hybrids since October 2019. He previously served as Chief Executive Officer of XL Hybrids from July 2009 through October 2019. Mr. Hynes has over 17 years of experience in energy innovation and fleet electrification. He currently serves as Senior Lecturer at the Sloane School of Management at the Massachusetts Institute of Technology, a position he has held since July 2008. Mr. Hynes has served on the board of directors of Woodwell Climate Research Center, a non-profit organization committed to conducting climate change research, since June 2018. Mr. Hynes holds a B.S. in management science from the Massachusetts Institute of Technology.
Debora M. Frodl has served as a member of our board of directors and the chair of our board of directors since December 2020. From May 24, 2018 until December 2020, Ms. Frodl served as a member of the board of directors of XL Hybrids and was chair of the XL Hybrids’ board of directors from July 1, 2019 until December 2020. Ms. Frodl has served as a member of the board of directors for Spring Valley Acquisition Corp., a publically traded special purpose acquisition corporation focused on sustainability, since November 2020, Renewable Energy Group, Inc., a public company focused on biofuels, since March 2018 and ITC Holdings Corporation, a private company focused on electricity transmission, since September 2020. Ms. Frodl served as the Global Executive Director for Ecomagination at General Electric Company (“GE”) from December 2012 through December 2017, where she expanded GE’s clean technology strategy. From 2010 to 2012, Ms. Frodl served as Chief Strategy Officer & Global Alternative Fuels Leader for GE, leading the company to decarbonize its commercial fleet through deployment of alternative fuel vehicles. Prior to this position, Ms. Frodl gained over twenty years of senior executive experience at GE Capital, serving in roles including Chief Marketing Officer of GE Capital Commercial Equipment Finance, Chief Executive Officer of GE Capital Dealer Finance and as Chief Executive Officer of GE Capital Public Finance. Since 2014, Ms. Frodl has served as an ambassador for the Clean Energy, Education & Empowerment for Women Initiative, a collaboration between U.S. Department of Energy, MIT and Stanford. She also served on the Advisory Board for the National Renewable Energy Lab, Joint Institute of Strategic Energy Analysis and the University of Minnesota, Institute on the Environment. Ms. Frodl is a certified Governance Fellow for the National Association of Corporate Directors since 2018. Ms. Frodl completed executive programs, Making Corporate Boards Most Effective, at Harvard Business School and Director’s Consortium, at Stanford Graduate School of Business. She holds an M.B.A. from the University of St. Thomas and B.S.B.A. from Minnesota State University.
Declan P. Flanagan has served as a member of our board of directors and the chair of our nominating and corporate governance committee since December 2020. Mr. Flanagan currently serves as the Executive Vice President and Chief Executive Officer of the Onshore Business Unit of Ørsted A/S, a position he has held since October 2018. From July 2009 until its acquisition by Ørsted in September 2018, Mr. Flanagan served as Chief Executive Officer of Lincoln Clean Energy (f/k/a Lincoln Renewable Energy). From December 2007 to July 2009, Mr. Flanagan served as Chief Executive Officer of E. On Climate and Renewables North America LLC. From April 2003 through December 2007, Mr. Flanagan served as Chief Executive Officer of Airtricity North America LLC. Mr. Flanagan is a former member of the boards of both the American Wind Energy Association and the Solar Energy Industries Association. Mr. Flanagan holds a B.Sc in environmental science from National University of Ireland, a M.Sc in environmental management from University of Ulster and an MBA in accounting and finance from Northwestern University.
Kevin Griffin has served as a member of our board of directors since April 2019. Mr. Griffin has served as a member of the board of directors of Pivotal Acquisition Corp. III (“Pivotal III”) since February 2021 and also served as a member of the board of directors of Pivotal Acquisition Corp. (“Pivotal I”) from September 2018 until it consummated its initial business combination with KLDiscovery Inc. (“KLDiscovery”) in December 2019 and has continued to serve on the board of directors of KLDiscovery (NYSE: KLDI) since such time. During Mr. Griffin’s 20-year career, Mr. Griffin has originated and invested over $4 billion across the capital structure of middle market businesses and has also sat on numerous boards of directors. Mr. Griffin founded MGG in OctoberInvestment Group and since July 2014 and has served as its Chief Executive Officerthe Managing Partner, CEO, and Chief Investment Officer since such time. Prior to launching MGG,CIO of the firm. In this capacity, Mr. Griffin was a Managing Director with Highbridge Principal Strategies from January 2010 to June 2014, where he was a senior memberis responsible for overseeing all aspects of the Specialty Lending Platform and a Member offirm, including the Highbridge Credit Committee. Prior to this, Mr. Griffin wasinvestment process from origination through portfolio monitoring as well as the Head of Private Investing for Octavian Funds, a hedge fund focused on global investing across debt and equity structures, from 2007 to 2009. From 2003 to 2007, Mr. Griffin was part of Fortress Investment Group in charge of originating and underwriting investment opportunitiesstrategic vision for the Drawbridge Special Opportunities Fund. Priorfirm. Mr. Griffin’s investment and mergers & acquisitions background provides significant benefit to Fortress, Mr. Griffin was an investor with one of the first publicly traded business development companies, American Capital, where he was involved in numerous equity buyoutboard when analyzing and subordinated debt investments. Mr. Griffin began his career with Houlihan Lokey Howard & Zukin’s Investment Banking Division, focusing primarily on distressed M&A and financial restructurings. The M&A Advisor in May 2015 named Mr. Griffin a winner of its 40 Under 40 Emerging Leaders Award. The Hedge Fund Journal, in association with Ernst & Young, in December 2016 named Mr. Griffin one of 50 “Tomorrow’s Titans”. Mr. Griffin received a BSBA in Finance from Georgetown University.assessing acquisition opportunities. Christopher Hayes has served as a member of our board of directors and the chair of our compensation committee since December 2020.2020, and has been Chair since January 2023. From August 30, 2019 until December 2020, Mr. Hayes served as a member of the board of directors of XL Hybrids and was a member of XL Hybrids’ Finance Committee.Hybrids. Mr. Hayes currently serves as managing partner and director of Alturus, a sustainable infrastructure investment company he founded inon January 1, 2017. From January 1, 2016 to January 1, 2017, Mr. Hayes served as the Senior Vice President of Corporate Development at Edison International, a publicallypublicly traded energy and power markets company. From June 2011Mr. Hayes’ extensive experience with sustainably-focused companies provides substantial guidance and expertise to December 2015, Mr. Hayes served as the managing partner of Altenex LLC, a company he founded that provided an energy management network used by companies, universities and municipalities to source clean power for their portfolios. Mr. Hayes holds a B.S. in business administration from the University of Denver. Jonathan J. Ledeckyhas served as a member of our board of directors since our inception. From our inception until December 2020, Mr. Ledecky served as our ChairmanChair and Chief Executive Officer. Mr. Ledecky has been a co-ownerco-owner of the National Hockey League’s New York Islanders franchise since October 2014. He also serves as an Alternate Governor on the Board of Governors of the NHL and as President of NY Hockey Holdings LLC. Mr. Ledecky has served as chairman of Ironbound Partners Fund LLC, a private investment management fund, since March 1999. Mr. Ledecky has alsoHe served as President and Chief Financial Officer and as a director of Newtown Lane Marketing, Incorporated 11 Table of Contents from October 2015 until it consummated its merger with Cyxtera Cybersecurity, Inc. in October 2021. He continued to serve as a director of the company (now Appgate Inc.) from such date until November 2022. He served as the President and Chief Operating Officer and as a director of Northern Star Acquisition Corp. (NYSE: STIC) sincefrom September 2020 and served as its Chief Executive Officer from July 2020 until September 2020. Northern Star Acquisition Corp. has entered into a definitive agreement forit consummated an initial business combination with Barkbox, Inc., the leading global brand for dogs, in June 2021. Mr. Ledecky served as a director of Bark, Inc. until October, 2022. He has also served as the President, Chief Operating Officer and director of Northern Star Investment Corp. II (NYSE: NSTB) since November 2020, President, Chief Operating Officer and director of Northern Star Investment Corp. III (NYSE: NSTC) since November 2020, and President, Chief Operating Officer and director of Northern Star Investment Corp. IV (NYSE: NSTD) since November 2020. Northern Star2020, Chairman of the Board of Pivotal Investment Corp. II has entered into a definitive agreement for a business combination with Apex Clearing Corporation. Mr. Ledecky was alsoCorporation III since October 2020 and Chief Executive Officer, Chief Financial Officer and chairmana director of Yale Transaction Finders Inc. since March 2022, each of which is a blank check company seeking to consummate a business combination. From August 2018 to December 2019, he served as Chairman and Chief Executive Officer of Pivotal Acquisition Corp. Mr. Ledecky continued to serve as a member of the board of directors of Pivotal Investment Corporation, a blank check company that completedKLDiscovery (NYSE: KLDI) from its initial business combination with KLDiscovery, a provider of software and services that help protect corporations from a range of information governance, compliance and data issues. Mr. Ledecky has also served as President and a director of Newtown Lane Holdings, Incorporated, a blank check company, since October 2015 which has entered into a definitive agreement for a business combination with Cyxtera Cybersecurity, Inc. (doing business as Appgate).merger until June 2021. Mr. Ledecky also served as a member of the board of directors of Propel Media, Inc., a digital media holding company, from January 2015 to January 2019. Mr. Ledecky previouslyLedecky’s lengthy history of acquisitions, and his knowledge of emerging market opportunities, provides a dynamic voice to board discussions and deliberations. John P. Miller was appointed by the board to become a director in March 2022. Mr. Miller has over 40 years of broad-based executive management experience in the transportation, manufacturing and distribution industries in both public and private equity companies. From 2017 to 2021, he served as Chief Executive Officer of Power Solutions International (OTC Pink: PSIX), a trusteeleader in the design, engineering, and manufacturing of George Washington University, a directorbroad range of advanced, emission-certified engines and power systems. Prior to Power Solutions, from 2008 through 2016, Mr. Miller served in operational and financial management positions of increasing responsibility at Navistar International Corporation, a global manufacturer of commercial and military trucks, school buses, and diesel engines. Mr. Miller’s substantial financial experience is of great assistance to the U.S. Chamberboard as continued exploration of Commerce, a commissioner on the National Commission on Entrepreneurshipshort and a trustee of the U.S. Olympic and Paralympic Foundation. In 2004, Mr. Ledecky was elected the Chief Marshal of the 2004 Harvard University Commencement, an honor bestowed by his alumni peers for a 25th reunion graduate deemed to have made exceptional contributions to Harvard and the greater society while achieving outstanding professional success. Mr. Ledecky received a B.A. (cum laude) from Harvard University and a M.B.A. from the Harvard Business School.longer term growth strategies occurs. Niharika Taskar RamdevEric Tech has served as a member of ourthe board of directors and the chairperson of our audit committee since December 2020.2021 and served as Chief Executive Officer of the Company from December 2021 until February 1, 2023. Mr. Tech brings nearly 35 years of automotive and mobility industry experience to the Company. From June 2006 through August 1996 to April 2019, Ms. Ramdev served in numerous2021, he held senior leadership positions with General Motorsof increasing responsibility at Navistar International Corporation (“GM”Navistar”), including several senior management positions beginninga publicly traded global manufacturer and marketer of medium and heavy duty vehicles and parts, finishing his career there as Senior Vice President of Corporate Development. The board believes that, as former CEO, Mr. Tech is uniquely positioned to report to the board on Company activities and guide discussions regarding potential strategic priorities.
Christian Fong has served as Chief Executive Officer since February 2023 and as President and member of the board of directors since joining the Company in 2011.September 2022, through the business transaction between the Company and Spruce Power. From August 2011April 2018 to March 2014, Ms. RamdevSeptember 2022, Mr. Fong served as the Chief FinancialExecutive Officer for Global Purchasing and Supply Chain for GM. From April 2014Board Chair of Spruce Power prior to June 2015, Ms. Ramdev served astheir acquisition by the Vice President of Finance and Treasurer for GM. From July 2015 to January 2018, Ms. Ramdev served asCompany. Mr. Fong joined the Chief Financial Officer for General Motors International, a division of GM. From January 2018 to April 2019, Ms. Ramdev served as the Chief Financial Officer for Global Cadillac, a division of GM. Ms. Ramdev received her M.B.A. from Harvard Business School. Sarah Sclarsic has served as a member of our board of directors since June 2019. Ms. Sclarsic is a technology entrepreneur and advisor, consulting for companiesSpruce Power in a wide range of areas,April 2017, serving as co-chair from drone delivery to financial software to gene therapy, advising them on fundraising, business strategy, key hires and communications. Since February 2021, Ms. Sclarsic has served as a director of Pivotal III. Since September 2018, Ms. Sclarsic has been conducting research at the MIT Media Lab, an interdisciplinary research laboratory at the Massachusetts Institute of Technology that encourages the unconventional mixing and matching of seemingly disparate research areas. From July 2016 to September 2018, Ms. Sclarsic served as Vice President of Operations of Sentieo, Inc., a producer of software for investors to research and analyze information on public companies. From 2013 to May 2016, she was the founding Business Director at Modern Meadow, Inc., a biotechnology company which developed methods to grow leather without animals. From 2011 to 2013, she was an independent consultant. In 2009, she co-founded Getaround, Inc., a carsharing company,2017 until April 2018. Previously, Mr. Fong co-founded Renewable Energy Trust Capital (“RET”) in 2010 and served as its Directorin various executive roles through 2016 with RET. As CEO, Mr. Fong’s input is critical to aiding the board’s understanding of Operations until 2010. Ms. Sclarsic received a B.A. in bioethics from Harvard Universitycompany operations, growth plans and a M.S. from Massachusetts Institute of Technology.strategy.
Committees of Our Board of Directors and Meetings Meeting Attendance.During the fiscal year ended December 31, 20202022 there were two18 meetings of our board of directors, and four meetings of the various committees of our board of directors. No director attended fewer than 75% of the total number of meetings of our board of directors and of committees of our board of directors on which he or she served during fiscal 2020, except for Declan Flanagan, who did not attend the one meeting that our board of directors held during the period he had been a director in fiscal 2020.2022. Each member of our board of directors is strongly encouraged but is not required to attend each annual meeting of our stockholders. Several times each year, as circumstances dictate, non-management directors meet in executive session without management. All non-management directors of the Company are independent as determined under applicable NYSE guidelines. Such independence is assessed and confirmed annually by the Nominating/Corporate Governance Committee, as reported to the full board. Audit committee.Committee. Our audit committeeAudit Committee met fourfive times during fiscal 2020.2022. This committee currently has three members, Niharika RamdevJohn P. Miller (Chair), Debora M. Frodl, who were both newly appointed on December 21, 2020,Christopher Hayes and Sarah Sclarsic, who served on this committee prior to our Business Combination (as defined below) and was re-appointed to continue her service on that same date.Jonathan Ledecky. Our audit committee’sAudit Committee’s role and responsibilities are set forth in the audit committee’sAudit Committee’s written charter (found on the Company’s website, www.sprucepower.com, under the Governance tab), and include the authority to appoint, compensate, retain, oversee 12 Table of Contents and terminate the services of our independent registered public accounting firm. In addition, the audit committeeAudit Committee reviews annual financial statements, considers matters relating to accounting policy and internal controls and reviews the scope of annual audits. All members of the audit committeeAudit Committee satisfy the current independence standards promulgated by the SEC and by the New York Stock Exchange, as such standards apply specifically to members of audit committees. Our board of directors has determined that Ms. RamdevJohn P. Miller is an “audit committee financial expert,” as determined by the SEC has defined that term in Item 407board of Regulation S-K.directors. Please also see the report of the audit committeeAudit Committee set forth elsewhere in this proxy statement. A copy of the audit committee’s written charter is publicly available on our website at www.xlfleet.com.
Compensation committee.Committee. Our compensation committee did not meetCompensation Committee met six times during fiscal 2020.2022. This committee currently has three members, Christopher Hayes (Chair), DeclanKevin Griffin and John P. Flanagan and Niharika Ramdev, each of whom were newly appointed to serve on this committee on December 21, 2020.Miller. Our compensation committee’sCompensation Committee’s role and responsibilities are set forth in the compensation committee’sCompensation Committee’s written charter (found on the Company’s website, www.sprucepower.com, under the Governance tab), and includes reviewing, approving and making recommendations regarding our compensation policies, practices and procedures to ensure that legal and fiduciary responsibilities of our board of directors are carried out and that such policies, practices and procedures contribute to our success.success, including undertaking an annual review of its own performance. Our compensation committeeCompensation Committee also administers our XL Fleet Corp. 2020 Equity Incentive Plan. The compensation committeeCompensation Committee is responsible for the determination of the compensation of our chief executive officer, and shall conduct its decision making-making process with respect to that issue without the chief executive officer present. All members of the compensation committeeCompensation Committee qualify as independent under the definition promulgated by thethe New York Stock Exchange. The compensation committeeCompensation Committee has adopted the following processes and procedures for the consideration and determination of executive and director compensation: | · | The compensation committee establishes a compensation policy for executive officers that includes (i) an annual base salary, (ii) incentive compensation which is awarded for the achievement of predetermined financial, project, research• The Compensation Committee establishes a compensation policy for executive officers that includes (i) an annual base salary, (ii) incentive compensation which is awarded for the achievement of predetermined financial, strategic or other designated objectives of the Company as a whole and of the executive officers individually and (iii) long-term incentive compensation in the forms of equity participation and other awards with the goal of aligning, where appropriate, the long-term interests of executive officers with those of the Company’s stockholders and otherwise encouraging the achievement of superior results over an extended time period. |
| · | The compensation committee establishes a compensation policy for the Company’s executive officers that (i) enhances the profitability of the Company and increases stockholder value, (ii) recognizes individual initiative, leadership, achievement and other contributions and (iv) provides competitive compensation that will attract and retain qualified executives. |
| · | The compensation committee annually reviews the compensation policy for the Company’s directors, Chief Executive Officer and other executive officers, which review includes (i) a review and approval of corporate goals and objectives relevant to the compensation of the Chief Executive Officer and other executive officers, (ii) an evaluation of the Chief Executive Officer’s performance in light of relevant corporate goals and objectives, (iii) a performance evaluation of the Company’s management (iv) a review of executive supplementary benefits and, as appropriate, the Company’s retirement, benefit and special compensation programs involving significant cost, (v) a review of the Company’s equity-based plans that are subject to approval by our board of directors and (vi) a review of competitive practices and trends to determine the adequacy of the executive compensation program. |
| · | The compensation committee has the authority to retain or obtain the advice of such compensation consultants, legal counsels, experts and other advisors as the committee may deem appropriate in its sole discretion. |
| · | The compensation committee has the authority, to the extent permitted by and consistent with applicable law and the provisions of the Company’s 2020 Equity Incentive Plan, to delegate to one or more executive officers of the Company the power to grant options or other stock awards pursuant to the Company’s 2020 Equity Incentive Plan. |
A copy of the Company as a whole and of the executive officers individually and (iii) long-term incentive compensation committee’s written charter is publicly available onin the forms of equity participation and other awards with the goal of aligning, where appropriate, the long-term interests of executive officers with those of the Company’s stockholders and otherwise encouraging the achievement of superior results over an extended time period.
• The Compensation Committee establishes a compensation policy for the Company’s executive officers that (i) enhances the profitability of the Company and increases stockholder value, (ii) recognizes individual initiative, leadership, achievement and other contributions and (iv) provides competitive compensation that will attract and retain qualified executives. • The Compensation Committee annually reviews the compensation policy for the Company’s directors, Chief Executive Officer and other executive officers, which review includes (i) a review and approval of corporate goals and objectives relevant to the compensation of the Chief Executive Officer and other executive officers, (ii) an evaluation of the Chief Executive Officer’s performance in light of relevant corporate goals and objectives, (iii) a performance evaluation of the Company’s management (iv) a review of executive supplementary benefits and, as appropriate, the Company’s retirement, benefit and special compensation programs involving significant cost, (v) a review of the Company’s equity-based plans that are subject to approval by our website at www.xlfleet.com.board of directors and (v) a review of competitive practices and trends to determine the adequacy of the executive compensation program. • The Compensation Committee has the authority to retain or obtain the advice of such compensation consultants, legal counsels, experts and other advisors as the committee may deem appropriate in its sole discretion. • The Compensation Committee has the authority, to the extent permitted by and consistent with applicable law and the provisions of the Company’s 2020 Equity Incentive Plan, to delegate to one or more executive officers of the Company the power to grant options or other stock awards pursuant to the Company’s 2020 Equity Incentive Plan. The Compensation Committee further assists the board in its oversight of the development and implementation of the Company’s human capital management, including those policies and strategies regarding recruiting, retention, career development, opportunity, advancement, and succession and employment practices to ensure appropriate attraction, development, and retention of employees whose contributions are critical to the success of the Company. 13 Table of Contents Nominating and Corporate Governance Committee. Our Nominating and Corporate Governance Committee. Our nominating and governance committee (“Nominating Committee”) did not meetmet six times during fiscal 20202022 and currently has threetwo members, DeclanJohn P. FlanaganMiller (Chair), Debora M. Frodl and Christopher Hayes, each of whom were newly appointed to serve on this committee on December 21, 2020.Hayes. Our board of directors has determined that all members of the Nominating Committee qualify as independent under the definition promulgated by the New York Stock Exchange. The Nominating Committee’s responsibilities are set forth in the Nominating Committee’s written charter and include, among other things: | · | • identifying, reviewing and making recommendations of candidates to serve on our board of directors; |
| · | evaluating the performance of our board of directors, its committees and individual directors and determining whether continued service on our board of directors is appropriate; |
13• evaluating the performance of our board of directors, its committees and individual directors and determining whether continued service on our board of directors is appropriate;
• evaluating nominations by stockholders of candidates for election to our board of directors; • evaluating the current size, composition and organization of our board of directors and its committees and making recommendations to our board of directors for approvals; | · | evaluating nominations by stockholders of candidates for election to our board of directors; |
| · | evaluating the current size, composition and organization of our board of directors and its committees and making recommendations to our board of directors for approvals; |
| · | developing a set of corporate governance policies and principles and recommending to our board of directors any changes to such policies and principles; |
| · | reviewing issues and developments related to corporate governance and identifying and bringing to the attention of our board of directors current and emerging corporate governance trends; and |
| · | reviewing periodically the nominating and corporate governance committee• developing a set of corporate governance policies and principles and recommending to our board of directors any changes to such policies and principles; • reviewing issues and developments related to corporate governance and identifying and bringing to the attention of our board of directors current and emerging corporate governance trends; and • reviewing periodically the Nominating Committee charter, structure and membership requirements and recommending any proposed changes to our board of directors, including undertaking an annual review of its own performance. |
Generally, our Nominating Committee considers candidates recommended by stockholders as well as from other sources such as other directors or officers, third party search firms or other appropriate sources. Once identified, the Nominating Committee will evaluate a candidate’s qualifications in accordance with our Nominating and Governance Committee Policy Regarding Qualifications of Directors appended to our Nominating Committee’s written charter. Threshold criteria include: integrity and ethical values, commitment to the long term value of the Company and its stockholders, absence of conflicts of interest, fair and equal representation of all stockholders of the Company, achievement in the fields of business, professional, governmental, community, scientific or educational endeavors, the ability to function effectively in an oversight role, a diversity of backgrounds, perspectives, experience, age, gender, ethnicity and citizenship, understanding of the Company’s business, ability to devote adequate time to our board of directors and its committees, no conflicts with any applicable board policies. Our Nominating Committee has not adopted a formal diversity policy in connection with the consideration of director nominations or the selection of nominees. However, the Nominating Committee will consider issues of diversity among its members in identifying and considering nominees for director, and strive where appropriate to achieve a diverse balance of backgrounds, perspectives, experiences, ages, genders, ethnicities and countries of citizenship on our board of directors and its committees. The board believes that diversity of membership is important to foster various points of view, improving the quality of dialogue, contributing to a more effective decision-making process, and enhancing overall culture in the boardroom. The Nominating Committee undertakes an annual assessment of each director’s skills and experiences in order to ensure that the board is most effectively responding to the needs of the business, acting in the best interests of stockholders. The Committee reviews how the experiences and skills of each director complement those of fellow board members to create a balanced board with diverse viewpoints and deep expertise. If a stockholder wishes to propose a candidate for consideration as a nominee for election to our board of directors, itthey must follow the procedures described in our Bylaws and in “Stockholder Proposals and Nominations for Director” at the end of this proxy statement. In general, persons recommended by stockholders will be considered in accordance with our Policy on Stockholder Recommendation of Candidates for Election as Directors appended to our Nominating Committee’s written charter. Any such recommendation should be made in writing to the Nominating and Governance Committee, care of our Corporate Secretary at our principal office and should be accompanied by the following information concerning each recommending stockholder and the beneficial owner, if any, on whose behalf the nomination is made: | · | as to each recommending stockholder, (i) the name and address of such recommending stockholder (including, if applicable, the name and address that appear on the Company’s books and records) and (ii) the number of shares of each class or series of stock of the Company that are, directly or indirectly, owned of record or beneficially owned (within the meaning of Rule 13d-3 under the Exchange Act) by such recommending stockholder; |
| · | as to each recommending stockholder, (i) the full notional amount of any securities that, directly or indirectly, underlie any “derivative security” (as such term is defined in Rule 16a-1(c) under the Exchange Act) that constitutes a “call equivalent position” (as such term is defined in Rule 16a-1(b) under the Exchange Act) (“Synthetic Equity Position”) and that is, directly or indirectly, held or maintained by such recommending stockholder with respect to any shares of any class or series of stock of the Company; provided that, for the purposes of the definition of “Synthetic Equity Position,” the term “derivative security” shall also include any security or instrument that would not otherwise constitute a “derivative security” as a result of any feature that would make any conversion, exercise or similar right or privilege of such security or instrument becoming determinable only at some future date or upon the happening of a future occurrence, in which case the determination of the amount of securities into which such security or instrument would be convertible or exercisable shall be made assuming that such security or instrument is immediately convertible or exercisable at the time of such determination; and, provided, further, that any recommending stockholder satisfying the requirements of Rule 13d-1(b)(1) under the Securities Exchange Act of 1934 (the “Exchange Act”) (other than a recommending stockholder that so satisfies Rule 13d-1(b)(1) under the Exchange Act solely by reason of Rule 13d-1(b)(1)(ii)(E)) shall not be deemed to hold or maintain the notional amount of any securities that underlie a Synthetic Equity Position held by such recommending stockholder as a hedge with respect to a bona fide derivatives trade or position of such recommending stockholder in the ordinary course of such recommending stockholder’s business as a derivatives dealer, (ii) any rights to dividends on the shares of any class or series of |
• as to each recommending stockholder, (i) the name and address of such recommending stockholder (including, if applicable, the name and address that appear on the Company’s books and records) and 14 Table of Contents (ii) the number of shares of each class or series of stock of the Company that are, directly or indirectly, owned of record or beneficially owned (within the meaning of Rule 13d-3 under the Exchange Act) by such recommending stockholder; • as to each recommending stockholder, (i) the full notional amount of any securities that, directly or indirectly, underlie any “derivative security” (as such term is defined in Rule 16a-1(c) under the Exchange Act) that constitutes a “call equivalent position” (as such term is defined in Rule 16a-1(b) under the Exchange Act) (“Synthetic Equity Position”) and that is, directly or indirectly, held or maintained by such recommending stockholder with respect to any shares of any class or series of stock of the Company; provided that, for the purposes of the definition of “Synthetic Equity Position,” the term “derivative security” shall also include any security or instrument that would not otherwise constitute a “derivative security” as a result of any feature that would make any conversion, exercise or similar right or privilege of such security or instrument becoming determinable only at some future date or upon the happening of a future occurrence, in which case the determination of the amount of securities into which such security or instrument would be convertible or exercisable shall be made assuming that such security or instrument is immediately convertible or exercisable at the time of such determination; and, provided, further, that any recommending stockholder satisfying the requirements of Rule 13d-1(b)(1) under the Securities Exchange Act of 1934 (the “Exchange Act”) (other than a recommending stockholder that so satisfies Rule 13d-1(b)(1) under the Exchange Act solely by reason of Rule 13d-1(b)(1)(ii)(E)) shall not be deemed to hold or maintain the notional amount of any securities that underlie a Synthetic Equity Position held by such recommending stockholder as a hedge with respect to a bona fide derivatives trade or position of such recommending stockholder in the ordinary course of such recommending stockholder’s business as a derivatives dealer, (ii) any rights to dividends on the shares of any class or series of stock of the Company owned beneficially by such recommending stockholder that are separated or separable from the underlying shares of the Company, (iii) any material pending or threatened legal proceeding in which such recommending stockholder is a party or material participant involving the Company or any of its officers or directors, or any affiliate of the Company, (iv) any other material relationship between such recommending stockholder, on the one hand, and the Company or any affiliate of the Company, on the other hand, (v) any direct or indirect material interest in any material contract or agreement of such recommending stockholder with the Company or any affiliate of the Company (including, in any such case, any employment agreement, collective bargaining agreement or consulting agreement) and (vi) any other information relating to such recommending stockholder that would be required to be disclosed in a proxy statement or other filing required to be made in connection with solicitations of proxies or consents by such recommending stockholder in support of the business proposed to be brought before the meeting pursuant to Section 14(a) of the Exchange Act (the disclosures to be made pursuant to the foregoing clauses (i) through (vi) are referred to as “Disclosable Interests”); provided, however, that Disclosable Interests shall not include any such disclosures with respect to the ordinary course business activities of any broker, dealer, commercial bank, trust company or other nominee who is a recommending stockholder solely as a result of being the stockholder directed to prepare and submit the notice required by our Bylaws on behalf of a beneficial owner; and • as to each candidate whom a recommending stockholder proposes to nominate for election as a director, (i) all information with respect to such candidate for nomination that would be required to be set forth in a stockholder’s notice if such candidate for nomination were a recommending stockholder, (ii) all information relating to such candidate for nomination that is required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors in a contested election pursuant to Section 14(a) under the Exchange Act (including such candidate’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected), (iii) a description of any direct or indirect material interest in any material contract or agreement between or among any recommending stockholder, on the one hand, and each candidate for nomination or any other participants in such solicitation, on the other hand, including, without limitation, all information that would be required to be disclosed pursuant to Item 404 under Regulation S-K if such recommending stockholder were the “registrant” for purposes of such rule and the candidate for nomination were a director or executive officer of such registrant and (iv) a completed and signed questionnaire, and other supporting materials. 15 Table of Contents | | stock of the Company owned beneficially by such recommending stockholder that are separated or separable from the underlying shares of the Company, (iii) any material pending or threatened legal proceeding in which such recommending stockholder is a party or material participant involving the Company or any of its officers or directors, or any affiliate of the Company, (iv) any other material relationship between such recommending stockholder, on the one hand, and the Company or any affiliate of the Company, on the other hand, (v) any direct or indirect material interest in any material contract or agreement of such recommending stockholder with the Company or any affiliate of the Company (including, in any such case, any employment agreement, collective bargaining agreement or consulting agreement) and (vi) any other information relating to such recommending stockholder that would be required to be disclosed in a proxy statement or other filing required to be made in connection with solicitations of proxies or consents by such recommending stockholder in support of the business proposed to be brought before the meeting pursuant to Section 14(a) of the Exchange Act (the disclosures to be made pursuant to the foregoing clauses (i) through (vi) are referred to as “Disclosable Interests”); provided, however, that Disclosable Interests shall not include any such disclosures with respect to the ordinary course business activities of any broker, dealer, commercial bank, trust company or other nominee who is a recommending stockholder solely as a result of being the stockholder directed to prepare and submit the notice required by our Bylaws on behalf of a beneficial owner; and |
| · | as to each candidate whom a recommending stockholder proposes to nominate for election as a director, (i) all information with respect to such candidate for nomination that would be required to be set forth in a stockholder’s notice if such candidate for nomination were a recommending stockholder, (ii) all information relating to such candidate for nomination that is required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors in a contested election pursuant to Section 14(a) under the Exchange Act (including such candidate’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected), (iii) a description of any direct or indirect material interest in any material contract or agreement between or among any recommending stockholder, on the one hand, and each candidate for nomination or any other participants in such solicitation, on the other hand, including, without limitation, all information that would be required to be disclosed pursuant to Item 404 under Regulation S-K if such recommending stockholder were the “registrant” for purposes of such rule and the candidate for nomination were a director or executive officer of such registrant and (iv) a completed and signed questionnaire, representation and agreement as required by our Bylaws. |
A copy of the Nominating Committee’s written charter including its appendices, is publicly available on our website at www.xlfleet.com.www.sprucepower.com under the Governance tab. Christian Fong was appointed to our board of directors, effective as of September 9, 2022, in connection with the closing of our acquisition of the Spruce Power. Board Leadership Structure and Role in Risk Oversight Currently, the role of chair of the board is separated from the role of chief executive officer, and we plan to keep these roles separate. We believe that separating these positions allows our chief executive officer to focus on our day-to-dayday-to-day business, while allowing the chair of the board to lead the board of directors in its fundamental role of providing advice to and independent oversight of management. Our board of directors recognizes the time, effort, and energy that the chief executive officer is required to devote to his position in the current business environment, as well as the commitment required to serve as our chair, particularly as the board of directors’ oversight responsibilities continue to grow. While our bylaws and our corporate governance guidelines do not require that our chair and chief executive officer positions be separate, our board of directors believes that having separate positions is the appropriate leadership structure for us at this time and demonstrates our commitment to good corporate governance. One of the key functions of our board of directors is informed oversight of our risk management process. Our board of directors does not have a standing risk management committee, but administers this oversight function directly through our board of directors as a whole, as well as through various standing committees of our board of directors that address risks inherent in their respective areas of oversight. In particular, our board of directors is responsible for monitoring and assessing strategic risk exposure and our audit committee will have the responsibility to consider and discuss our major financial risk exposures and the steps our management will take to monitor and control such exposures, including guidelines and policies to govern the process by which risk assessment and management is undertaken. Our audit committee monitors compliance with legal and regulatory requirements.requirements, and also has oversight responsibilities for the Company’s cybersecurity and data privacy risk management responsibility. The head of the Company’s Internal Audit function conducts an annual risk assessment survey and analysis, which is reported to the Audit Committee. Our compensation committee assesses and monitors whether our compensation plans, policies and programs comply with applicable legal and regulatory requirements. Stockholder Communications by Stockholders and Others to Our Board of Directors
Generally, stockholders or other interested entities who have questions or concerns should contact our Investor Relations department at xlfleetir@icrinc.com.investors@sprucepower.com. However, any stockholders or other interested parties who wish to address questions regarding our business directly with our board of directors, orto any individual director, or to the non-management directors as a group should direct his or her questions to the board of directors by mailing or hand delivering writingwritten communications to Attn: Security Holder Communication,Communications, Board of Directors, XL Fleet Corp., 145 NewtonSpruce Power Holding Corporation, 1875 Lawrence Street, Boston, Massachusetts 20135.Suite 320, Denver, Colorado 80202. Communications will be distributed to our board of directors, or to any individual director or directors as appropriate, depending on the facts and circumstances outlined in the communications. Items that are unrelated to the duties and responsibilities of our board of directors may be excluded, such as: | · | junk mail and mass mailings; |
| · | resumes and other forms of job inquiries; |
| · | solicitations or advertisements. |
• junk mail and mass mailings; • resumes and other forms of job inquiries; • surveys; and • solicitations or advertisements. In addition, any material that is unduly hostile, threatening, or illegal in nature may be excluded, in which case it will be made available to any outside director upon request. Hedging Policy16
Table of Contents EXECUTIVE OFFICER AND DIRECTOR COMPENSATION Narrative Discussion of Executive Compensation1 This section explains our executive compensation program for our named executive officers (“NEOs”) and the decisions made with respect to 2022 regarding the compensation of each of our NEOs who served in 2022. This section also describes the process of our Compensation Committee (the “Committee”) and board of directors for making compensation decisions, as well as the rationale for specific decisions related to the fiscal year ended December 31, 2022. We refer to the following individuals in this proxy statement as our named executive officers or NEOs: Name | | Position | Eric Tech | | Former Chief Executive Officer | Christian Fong | | President and Chief Executive Officer | Colleen Calhoun | | Former Vice President and General Manager of XL Grid | James Berklas | | Former General Counsel and Vice President of Corporate Development | Thomas (Tod) Hynes III | | Former President |
How Our NEOs Were Selected Our NEOs have been determined in accordance with the rules of the Securities and Exchange Commission, which provides that our NEOs consist of (i) the person who served as our Chief Executive Officer during 2022 (Mr. Tech), (ii) the two other most highly compensated executive officers of the Company based on their total compensation during 2022 who were executive officers as of December 31, 2022 (Mr. Fong and Ms. Calhoun), and (iii) two other persons who would have been NEOs but for the fact that the person was not serving as an executive officer of the Company as of December 31, 2022 (Mr. Berklas and Mr. Hynes). As a policy that prohibits Company personnel, including executivesresult of the changes in our management team during 2022 and directors, from engaging in any transaction in which they may profit from short-term speculative swings2023 as described in the value of our securities. This includes “short sales” (selling borrowed securities thatnext paragraph, Mr. Fong is the seller hopes can be purchased at a lower price in the future) or “short sales against the box” (selling owned, but not delivered securities), “put” and “call” options and transactions involving financial instruments that are designed to hedge or offset any decrease in the market value of our equity securities. Executive Officers
The following table sets forth certain informationonly NEO who is still an executive officer as of April 15,the date of this proxy statement.
Mr. Tech joined the Company on December 1, 2021 regarding our executive officersand, through the disclosed transition of leadership from legacy management to management who are not also directors. All executive officers, other than our executive officersjoined the Company with the acquisition of Spruce Power, resigned on February 1, 2023 when Mr. Fong was appointed as Chief Executive Officer. Mr. Fong was appointed as President on September 9, 2022 and became CEO on February 1, 2023. In connection with this disclosed transition of leadership, Ms. Calhoun, who are also directors, are at-will employees. Name | | Age | | Position | James Berklas | | 50 | | General Counsel |
Jameshad been serving as Vice President and General Manager of XL Grid, departed the Company on February 1, 2023. Mr. Berklas has servedresigned as our General Counsel and Vice President of Corporate Development since January 2021, during which time he has overseenon May 15, 2022. Mr. Hynes resigned as President on March 21, 2022.
Compensation Practices & Policies We believe the following practices and policies within our legalprogram promote sound compensation governance and compliance functionsare in the best interests of our stockholders and executed upon our corporate development initiatives. In September 2020, Mr. Berklas founded Augmented Industry Services, a boutique investment bank representing smaller domestic manufacturers. From August 2017 to August 2020, Mr. Berklas served as the Chief Growth Officer, head of M&A and General Counsel of medical device and packaging manufacturer of Westfall Technik, Inc., where he led the acquisition of 17 companies. Mr. Berklas has 25 years of legal experience, 11 years of public company leadership and has closed over 200 acquisition and financing transactions. He earned his J.D. from Harvard University and his B.A. from University of California, Los Angeles.executives: What We Do | | What We Don’t Do |
16
TableP
| | Emphasize variable pay over fixed pay, with a significant portion tied to our financial results and stock performance | | O | | No tax gross ups | P | | Maintain anti-hedging and anti-pledging policies | | O | | No repricing or exchange of Contentsunderwater options without stockholder approval | P | | Provide for “double-trigger” equity award vesting and severance benefits upon a change in control | | O | | No option or stock appreciation rights granted below fair market value | P | | Use an independent compensation consultant | | O | | No supplemental executive retirement plans |
Compensation Overview
1 We qualify as a “smaller reporting company” under the rules promulgated by the SEC, and we have elected to comply with the disclosure requirements applicable to smaller reporting companies. Accordingly, this 17 Table of Contents WHAT GUIDES OUR PROGRAM Executive Compensation Philosophy and Objectives Our executive compensation summaryphilosophy is driven by the following guiding principles that underpin the critical connections between performance, long-term value creation, talent management, compensation governance and our cultural values: • Competitively Positioned: Target compensation should be competitive with that being offered to individuals in comparable roles at other companies with which we compete for talent to ensure that we employ the best people to lead our success. • Performance-Driven and Stockholder-Aligned: A meaningful portion of total compensation should be variable and linked to the achievement of specific short- and long-term performance objectives and designed to drive stockholder value creation. • Responsibly Governed: Decisions about compensation should be guided by appropriate governance standards and rigorous processes that encourage prudent decision-making. Elements of Pay: Total Direct Compensation Our executive compensation philosophy is supported by the following principal elements of pay: Pay Element | | How It’s Paid | | Purpose | Base Salary | | Cash (Fixed) | | Provide a competitive base salary rate relative to similar positions in the market and enable the Company to attract and retain critical executive talent, reward overall performance by our executive officers and provides a degree of financial stability for each of our executive officers | Annual Incentives | | Cash (Variable) | | Reward executives for delivering on annual strategic objectives that we believe contribute to the creation of stockholder value and help us attract and retain critical executive talent. | Long-Term Incentives | | Equity (Variable) | | Provide incentives for executives to execute on longer-term financial goals that we believe drive the creation of stockholder value and help us attract and retain executive talent. |
Executive Compensation Decision-Making Process The Role of the Compensation Committee. The Compensation Committee oversees the executive compensation program for our NEOs. The Committee is comprised of independent, non-employee members of the Board. The Committee works closely with its independent consultant and management to examine the effectiveness of the Company’s executive compensation program throughout the year. Details of the Compensation Committee’s authority and responsibilities are specified in its charter, which may be accessed at our website at https://investors.sprucepower.com/governance/documents-and-charters/default.aspx. The Committee makes all final compensation and equity award decisions regarding our NEOs, except for the CEO, whose compensation is determined by the independent members of the full Board, based upon recommendations of the Committee. The Role of Management. Members of our management team attend regular meetings where executive compensation, Company and individual performance, and competitive compensation levels and practices are discussed and evaluated; however, they are not present in the board room, nor do they participate in discussions about their own pay. Only the Compensation Committee members are allowed to vote on decisions regarding NEO compensation. The CEO reviews his recommendations pertaining to other executives (non-NEO) pay with the Committee providing transparency and oversight. Decisions on non-NEO pay are made by the CEO. The CEO does not participate in the deliberations of the Committee regarding his own compensation. Independent members of the Board make all final determinations regarding CEO compensation. The Role of the Independent Consultant. The Compensation Committee engages an independent compensation consultant to provide expertise on competitive pay practices, program design, and an objective assessment of any inherent risks of any programs. Pursuant to authority granted to it under its charter, the Compensation Committee 18 Table of Contents has hired Pearl Meyer & Partners, LLC (“Pearl Meyer”) as its independent consultant. Pearl Meyer reports directly to the Compensation Committee and does not provide any additional services to management. The Compensation Committee has conducted an independence assessment of Pearl Meyer in accordance with SEC rules. The Role of Peer Group Companies. The Compensation Committee strives to set a competitive level of total compensation for each NEO as compared with executive officers in similar positions at peer companies. For purposes of setting 2022 compensation levels, the Committee did not reference a specific peer group or conduct formal benchmarking, but subjectively took into account publicly available data of similarly sized and situated companies and industry specific survey data. This market data was not the sole determinant in setting pay levels for the NEOs. Actual pay levels can be above or below the targeted levels depending on the Committee’s subjective evaluation of factors such as experience, individual or company performance, tenure, employee potential, unique skills, criticality of the position to the Company and other factors. In general, the Compensation Committee desires to balance general internal and external equity and reserve the right to use discretion to deviate when necessary to recruit employees and/or retain the right talent. 2022 EXECUTIVE COMPENSATION PROGRAM IN DETAIL Base Salary Base salary represents annual fixed compensation and is a standard element of compensation necessary to attract and retain executive leadership talent. Base salary also rewards overall performance and provides a degree of financial stability for our NEOs. In making base salary decisions, the Compensation Committee considers the CEO’s recommendations, as well as each NEO’s position and level of responsibility within the Company. The Committee (and the Board with respect to the CEO) takes into account factors such as competitive market data as well as individual performance, experience, tenure, internal equity, and employee potential. Among each NEO, the relative weighting of these factors was not assigned to all or any individual, but the Committee did make subjective determinations that the amounts of base salary were appropriate considering all of these factors collectively. Given the business transition after the Spruce Power acquisition during the 2022 fiscal year, no NEO was granted a salary increase during the year. Mr. Fong’s base salary was established in connection with the negotiation of his employment agreement, which was signed Mr. Fong joined the Company in connection with the Company’s acquisition of Spruce Power on September 9, 2022. Incentives The 2022 Annual Incentive Plan provided our NEOs the opportunity to earn a performance-based annual cash bonus. Actual payouts depend on the achievement of a combination of pre-determined organizational and individual performance objectives. Target annual bonus opportunities are expressed as a percentage of base salary and were established by the NEO’s level of responsibility and their ability to impact overall results. These targets were established based on recommendations from our independent consultants. Target award opportunities for 2022 were as follows: Name | | 2022
Base
Salary | | Bonus Target (% of Base Salary) | | Bonus at
Target
($) | Eric Tech | | $ | 600,000 | | 80 | % | | $ | 480,000 | | Christian Fong | | $ | 650,000 | | 100 | % | | $ | 429,000 | (1) | Colleen Calhoun | | $ | 375,000 | | 45 | % | | $ | 168,750 | | James Berklas | | $ | 375,000 | | 40 | % | | $ | 150,000 | | Thomas (Tod) Hynes III | | $ | 372,500 | | * | (2) | | | — | |
19 Table of Contents 2022 Organizational Performance Metrics. In 2022, the Committee identified revenue, gross margin and EBITDA as the organizational performance metrics in the Annual Incentive Plan because we believe it is important to focus our NEOs on top line growth and profitability. Revenue ensures we are delivering an appropriate level of top-line growth, while gross margin keeps us focused on efficient delivery and execution, and EBITDA focuses our NEOs on cash generated by the Company’s operations. Annual Incentive Plan Structure. The Annual Incentive Plan provides each of our NEOs with a bonus opportunity that can range from 0% to 150% of target award amounts. The plan as contemplated in 2022 was structured as follows: Plan Goal Component | | Organizational and Individual Plan
Weighting | | Weighting
Within
Metric
Group | |
Payouts
| Min* | | Target | | Max | Organizational Performance Metrics | | 60 | % | | | | | | | | | | | | | Revenue | | | | | 25 | % | | 75 | % | | 100 | % | | 150 | % | Gross Margin | | | | | 25 | % | | 75 | % | | 100 | % | | 150 | % | EBITDA | | | | | 50 | % | | 75 | % | | 100 | % | | 150 | % | Individual Performance Metrics | | 40 | % | | | | | | | | | | | | | Discrete objectives established for each NEO | | | | | 100 | % | | 75 | % | | 100 | % | | 150 | % |
Minimum payouts are subject to the achievement of a pre-determined “threshold” metric — such as revenue or gross margin, that was set at 75% of the relevant organization or individual target. Annual Incentive Plan Results. In determining bonus target achievement, the Committee measured results against goals, and additionally considered other events that occurred during the fiscal year, for which NEO leadership was critical. Notably, in September, 2022, the Company consummated the transformational acquisition of Spruce Power, strategically repositioning the Company’s business focus to a distributed clean energy provider. Additionally, the Company, in late December, 2022, announced its exit from the drivetrain segment and the sale of certain drivetrain assets to a third party. NEOs were instrumental in planning and executing the actions required to achieve this transformational shift of the Company during 2022. Additionally, certain NEOs received guaranteed bonus payments pursuant to the Executive Severance Policy, discussed below. Long-Term Equity Incentives In 2022, the Committee determined that all long-term equity incentives would be granted in the form of restricted stock units (“RSUs”), with a four year vesting schedule of twenty-five percent (25%) per year on the anniversary date of grant. The Committee believes that RSUs best align the interests of award recipients with those of our stockholders based on recommendations from our independent consultant. The long term nature of the RSUs creates performance and retention incentive for recipients. As we continue to evolve as a business, we recognize that the structure of our equity program must evolve with the transition of our business strategy. The Compensation Committee is currently evaluating its approach to long-term equity incentive compensation and is committed to putting forth a program that aligns the interests of our executives and stockholders each year. The 2022 awards for each NEO were as follows: Name | | RSUs | | Grant Date
Fair Value(1)
($) | Eric Tech | | 806,452 | | $ | 1,000,000 | Christian Fong(2) | | 3,484,848 | | $ | 3,730,606 | Colleen Calhoun | | 440,000 | | $ | 598,800 | James Berklas(3) | | 190,000 | | $ | 288,800 | Thomas (Tod) Hynes III(4) | | — | | | — |
20 Table of Contents OTHER PRACTICES, POLICIES & GUIDELINES Anti-Hedging & Pledging Policies Our insider trading policy prohibits our employees, including officers, and directors from pledging or engaging in hedging or similar transactions in our securities, including but not limited to prepaid variable forwards, equity swaps, collars, exchange funds, puts, calls and short sales. Other Benefits and Perquisites All of our NEOs are eligible to participate in our employee benefit plans, including medical, dental, vision, and life insurance plans, in each case on the same basis as all of our other employees. We pay the premiums for the life, disability, accidental death, and dismemberment insurance for all employees, including our NEOs. We generally do not provide perquisites or personal benefits. 401(k) Plan and Employee Stock Purchase Plan We maintain a 401(k) plan that provides eligible employees with an opportunity to save for retirement on a tax advantaged basis. Eligible employees are able to defer eligible compensation up to certain Code limits, which are updated annually. The Company provides for safe harbor matching contributions equal to 100% on the first 3% of an employee’s eligible earnings deferred and an additional 50% on the next 2% of an employee’s eligible earnings deferred. Employee elective deferrals and safe harbor matching contributions are 100% vested at all times. The 401(k) plan is intended to be qualified under Section 401(a) of the Code, with the related trust intended to be tax exempt under Section 501(a) of the Code. As a tax-qualified retirement plan, contributions to the 401(k) plan are deductible by us when made, and contributions and earnings on those amounts are not generally taxable to the employees until withdrawn or distributed from the 401(k) plan. Impact of Tax and Accounting We regularly consider the various tax and accounting implications of our compensation plans. When determining the amount of long-term incentives and equity grants to executives and employees, the compensation costs associated with the grants are reviewed, as required by FASB ASC Topic 718. While considering tax deductibility as only one of several considerations in determining compensation, the Committee believes that the tax deduction limitation should not compromise its ability to structure compensation programs that provide benefits to the Company that outweigh the potential benefit of a tax deduction and, therefore, may approve compensation that is not intended to meet the “Compensation Discussion and Analysis” disclosure requireddeductible for tax purposes. 21 Table of larger reporting companies.Contents Executive Compensation Tables 2022 Summary Compensation Table The following table sets forth information regarding the compensation to our NEOs for the years ended December 31, 2022 and 2021. Name | | Year | | Salary
($) | | Bonus
($)(1) | | Stock Awards
($)(2) | | Option Awards ($)(3) | | All Other Compensation ($)(4) | | Total
($) | Eric Tech | | 2022 | | $ | 600,440 | | $ | 520,000 | | $ | 1,000,000 | | | — | | $ | 465,414 | | $ | 2,585,854 | Former CEO | | 2021 | | | 50,000 | | | 250,000 | | | 1,260,000 | | $ | 540,000 | | | — | | | 2,100,000 | Christian Fong | | 2022 | | | 200,000 | | | 203,014 | | | 3,730,606 | | | — | | | 12,200 | | | 4,145,820 | President and CEO | | | | | | | | | | | | | | | | | | | | | Colleen Calhoun | | 2022 | | | 375,440 | | | 182,812 | | | 598,800 | | | — | | | 45,112 | | | 1,202,164 | Former VP and General Manager of XL Grid | | | | | | | | | | | | | | | | | | | | | Thomas (Tod) Hynes III(5) | | 2022 | | | 83,445 | | | — | | | — | | | — | | | 494,075 | | | 577,520 | Former President | | 2021 | | | 352,500 | | | — | | | — | | | — | | | 11,600 | | | 364,100 | James Berklas(6) | | 2022 | | | 187,796 | | | — | | | 288,800 | | | — | | | 1,254 | | | 477,850 | Former VP – Corporate Development & General Counsel | | 2021 | | | 312,000 | | | 200,000 | | | 208,998 | | | 328,080 | | | 1,456 | | | 1,050,534 |
22 Table of Contents Outstanding Equity Awards at 2022 Fiscal Year-End The following table shows (i) the number of outstanding stock option awards that are vested and unvested as of December 31, 2022; (ii) the exercise price and expiration date of these options; and (iii) the aggregate number and value as of December 31, 2022 of all unvested restricted stock or units. The values ascribed to the awards in the table below may or may not be realized by their recipients, depending on share prices at the time of vesting or exercise. Outstanding Equity Awards at Fiscal Year-End | Option Awards | | Restricted Stock
Unit Awards | Name | | Number of
Securities
Underlying
Unexercised
Options –
Exercisable
(#) | | Number of
Securities
Underlying
Unexercised
Options –
Unexercisable
(#) | | Option
Exercise
Price
($)(1) | | Option
Expiration
Date(1) | | Equity
Award
Grant
Date | | Equity
Award
Vesting
Dates(2) | | Number of
Units of
Stock Held
That Have
Not Vested
(#)(3) | | Market
Value of
Units of
Stock
Held that
Have Not
Yet Vested
($)(3) | Eric Tech | | 105,476 | | 316,429 | | 4.09 | | 12/02/31 | | 12/01/21 | | (b) | | — | | — | | | | — | | — | | — | | — | | 12/01/22 | | (b) | | 99,022 | | 91,001 | | | | — | | — | | — | | — | | 05/10/22 | | (c) | | 483,871 | | 444,677 | | | | — | | — | | — | | — | | 05/10/22 | | (d) | | 322,581 | | 296,452 | Christian Fong | | — | | — | | — | | — | | 09/09/22 | | (a) | | 909,091 | | 835,455 | | | | — | | — | | — | | — | | 09/09/22 | | (e) | | 1,666,666 | | 1,531,666 | Colleen Calhoun | | 8,750 | | 11,250 | | 14.54 | | 01/04/2031 | | 02/25/21 | | (a) | | — | | — | | | | — | | — | | — | | — | | 04/16/21 | | (c) | | 21,957 | | 20,178 | | | | — | | — | | — | | — | | 04/21/22 | | (d) | | 190,000 | | 174,610 | | | | — | | — | | — | | — | | 05/20/22 | | (c) | | 250,000 | | 229,750 | Thomas (Tod) Hynes III | | 595,111 | | — | | 0.22 | | 11/21/2023 | | 07/01/18 | | (f) | | — | | — | James Berklas | | — | | — | | — | | — | | — | | | | — | | — |
Employment Agreements and Severance Agreements Fong Employment Agreement. The Company entered into an Employment Agreement with Mr. Fong on September 9, 2022 (the “Fong Employment Agreement”). Under the Fong Employment Agreement, Mr. Fong’s position with the Company is President and (effective on February 1, 2023) Chief Executive Officer. The Fong Employment Agreement provides for a term of employment that commenced on September 9, 2022, and that will continue until terminated by the Company or Mr. Fong. If Mr. Fong’s employment is terminated by the Company without Cause (as defined in the Fong Employment Agreement) (other than due to his death or Disability (as defined in the Fong Employment Agreement)) or he resigns without Good Reason, then either the Company or Mr. Fong will provide the other party with at least thirty days’ prior written notice of such termination. In the event that Mr. Fong’s employment with the Company is terminated as a result of his Disability or death, he will receive the following severance benefits: (a) a lump sum payment of a pro-rata portion of his target bonus for the calendar year in which such termination 23 Table of Contents occurs based on the period worked by Mr. Fong during such calendar year prior to termination and (b) acceleration of unvested equity grants with time-based vesting that would have vested during the twelve month period following termination. The Fong Employment Agreement provides for (i) an initial annual base salary of $650,000 and (ii) an annual cash bonus with a target of 100% of his base salary based on achieving annual performance metrics determined by the Compensation Committee (the “Compensation Committee”) of the Board or the Board after consultation with him; provided, that, (x) any payments above the target bonus amount (if the metrics are achieved) will be in the sole discretion of the Compensation Committee or the Board and (y) any annual cash bonus for calendar year 2022 will be prorated for the period between September 9, 2022 to December 31, 2022. For the calendar year 2023 annual bonus only, if Mr. Fong is employed by the Company as of the date such bonus is due to be paid to other executive management team members, the annual bonus will be no less than the target bonus amount. The Company will provide Mr. Fong with up to $25,000 for attorneys’ fees with respect to the negotiations and all documentation relating to his becoming employed by the Company. In addition, the Fong Employment Agreement provides that if Mr. Fong’s employment with the Company is terminated not in connection with a Change of Control (as defined in the Fong Employment Agreement) (i) by the Company without Cause or (ii) by Mr. Fong for Good Reason and he executes and does not revoke a release of claims, he will receive the following severance benefits: (a) continuing payments in an amount equal to the sum of eighteen months of his then-current annual base salary and 1.5 times his target bonus, payable ratably over an eighteen month period, (b) acceleration of unvested equity grants with time-based vesting that would have vested during the twelve month period following termination, and (c) a lump sum payment equal to COBRA premiums at active employee rates for eighteen months. If Mr. Fong’s employment with the Company is terminated within a period of two years following a Change of Control or within a period of ninety days preceding a Change in Control, if the termination is related to the Change of Control, and (i) by the Company without Cause, or (ii) by Mr. Fong for Good Reason and, in all cases, he executes and does not revoke a release of claims, he will receive the following severance benefits: (a) a payment equal to twice the sum of his then-current annual base salary and target bonus, payable ratably over a twenty-four month period, (b) acceleration of all unvested equity grants, and (c) a lump sum payment equal to COBRA premiums at active employee rates for eighteen months. Executive Severance Policy. Effective May 11, 2022, the Company adopted an Executive Severance Policy (the “ESP”) which provides severance benefits to management and other key employees designated as participants by the board of directors. The ESP provides for severance benefits following a “Qualifying Termination” and enhanced severance benefits if there is a Qualifying Termination 90 days before or 12 months after a change of control of the Company. In September 2022, the Company Board of Directors determined that the Spruce Power acquisition qualified as a change in control of the Company, due to the nature of the transaction under which all executive management was scheduled to transition, and the pivoting of the strategic and operational focus of the Company away from its legacy business. On October 26, 2022, the Company entered into a letter agreement (the “Calhoun Severance Letter”) with Colleen Calhoun confirming the severance Ms. Calhoun would be entitled to receive under the ESP following the Spruce Power acquisition. Pursuant to the Calhoun Severance Letter, following the termination of her employment as of February 1, 2023, and receipt by the Company of a separation agreement which included a customary release of claims, Ms. Calhoun is receiving severance benefits equal to eighteen months of base salary; payment of her 2022 annual performance bonus at 100% of target and payment of her 2023 annual performance bonus pro-rata based on the number of days Ms. Calhoun was employed in calendar year 2023; eighteen months of COBRA premiums; and immediate vesting of unvested, time-based equity awards that had been granted prior to the date of employment separation, along with an immediate ability to exercise any outstanding stock options. Tech Employment Agreement. The Company entered into an employment agreement with Mr. Tech on November 1, 2021 (the “Tech Employment Agreement”). Consistent with the determination of the Board of Directors determination to treat the Spruce Power acquisition as a change of control under the ESP, the Board of Directors also determined to pay severance benefits to Mr. Tech following the termination of his employment as Chief Executive Officer as of February 1, 2023 in accordance with the provisions under the Tech Employment Agreement for severance after a change of control. As a result, Mr. Tech is entitled to, and is receiving, the following severance under the Tech Employment Agreement, after receipt by the Company of a separation agreement which included a customary release of claims: • lump sum payment of base salary for 18 months; • the cost of COBRA continuation coverage for all health plans and programs for such 18 months periods, as applicable; 24 Table of Contents • a pro rata portion of his annual performance bonus; and • immediate vesting of all outstanding options and RSUs. Hynes Separation Agreement. The Company entered into a letter agreement with Mr. Hynes on March 21, 2022 pursuant to which the Company agreed to pay Mr. Hynes: (a) a severance payment of $279,375; (b) $200,000 in lieu of annual director compensation; and (c) nine months of COBRA premium payments. Pay Versus Performance The Company and its Compensation Committee are committed to ensuring alignment between Company performance and executive compensation to encourage and reward management for the creation of stockholder value. This Pay versus Performance disclosure provides an additional perspective on our pay and performance alignment. This perspective is enhanced by the inclusion of Compensation Actually Paid (CAP) to our named executive officers, which captures the annual change in management’s total, company-derived wealth. This provides a distinct view from total compensation for our named executive officers as set forth in the “Summary Compensation Table” (SCT) pay, which captures the annual economic cost of compensation to the Company. 2022 was a transformational and transitional year for the Company. In part due to the replacement of a number of executive officers of the Company and the severance triggered in connection with the change in control resulting from the Spruce Power acquisition, the Company’s compensation metrics do not reflect direct alignment with 2022 performance. Going forward, the Company’s compensation programs are designed to align payout opportunities for our named executive officers with the Company’s long-term performance. Pay Versus Performance Table The following table shows the past two fiscal years’ of SCT pay, CAP, our indexed total shareholder return (TSR), and our net income. Pay vs. Performance Table Year | | Summary
Compensation
Table Total for
PEO(1&2) | | Summary of
Compensation
Table Total for
former
PEO(1&2) | | Compensation
Actually Paid
to PEO(1&3) | | Compensation
Actually Paid
to former
PEO(1&3) | | Average
Summary
Compensation
Table Total
for Non-PEO
NEOs(1&2) | | Average
Compensation
Actually Paid
to Non-PEO
NEOs(1&3) | | Value of
Initial
Fixed $100
Investment
Based
On Total
Shareholder
Return(4) | | Net Income
(Loss)
(thousands)(5) | 2022 | | 2,585,854 | | — | | 1,194,099 | | — | | | 1,600,839 | | 1,850,267 | | $ | 3.87 | | $ | (93,931 | ) | 2021 | | 2,100,000 | | 4,839,218 | | 1,7719,966 | | (46,892,889 | ) | | 767,896 | | 1,287,320 | | $ | 13.95 | | $ | 28,790 | |
Year | | PEO | | Non-PEO NEOs | 2022 | | Eric Tech | | Christian Fong, Thomas (Tod) Hynes III, James Berklas and Colleen Calhoun | 2021 | | Eric Tech and Dimitri Kazarinoff | | Thomas (Tod) Hynes III, Cielo Hernandez and James Berklas |
25 Table of Contents | | PEO | | Former PEO | | NEO Average | | | | 2022 | | 2021 | | 2022 | | 2021 | | 2022 | | 2021 | Summary Compensation Table Total | | $ | 2,585,854 | | | | 2,100,000 | | | — | | | 4,839,218 | | | $ | 1,600,839 | | | $ | 767,896 | Less: Reported Fair Value of Equity Awards(a) | | | (1,000,000 | ) | | | (1,800,000 | ) | | — | | | — | | | | (710,752 | ) | | | 379,039 | Add: Year-End Fair Value of Equity Awards Granted in the Year(b) | | | 741,129 | | | | 1,417,945 | | | — | | | — | | | | 607,037 | | | | 138,364 | Add: Fair Value of Equity Awards Granted in the Year that Vested in the Year(b) | | | — | | | | — | | | — | | | — | | | | 400,833 | | | | — | Add: Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year(b) | | | (282,983 | ) | | | — | | | — | | | (31,201,780 | ) | | | (7,171 | ) | | | — | Add: Change in Fair Value of Outstanding and Unvested Equity Awards(b) | | | (849,901 | ) | | | — | | | — | | | — | | | | (16,286 | ) | | | — | Less: Fair Value at end of Prior Year of Equity Awards Granted in Prior Years that Forfeited During the Year(b) | | | — | | | | — | | | — | | | (20,530,327 | ) | | | (24,234 | ) | | | — | Compensation Actually Paid | | $ | 1,194,099 | | | $ | 1,719,966 | | | — | | $ | (46,892,889 | ) | | $ | 1,850,267 | | | $ | 1,287,320 |
Name and
Principal Position | Year | Salary
($) | Bonus
($) | Stock
Awards
($) | Option
Awards
($)(1) | Non-Equity
Incentive Plan
Compensation
($) | Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($) | All Other
Compensation
($) | Total
($) | | Dimitri N. Kazarinoff, | 2020 | 292,500 | — | — | — | 358,000(2) | — | — | 650,500 | | Chief Executive Officer | 2019 | 74,048(3) | 17,325(4) | — | 633,710 | — | — | 57,241(5) | 782,324 | | Thomas J, Hynes, III, | 2020 | 225,000 | — | — | — | 302,860(6) | — | — | 527,860 | | President | 2019 | 250,000 | 40,000 | — | — | — | — | — | 290,000 |
| (1) | The amounts in this column represent the aggregate grant-date fair value of awards granted to each named executive officer, computed in accordance with Financial Accounting Standards Board’s Accounting Standards Codification Topic 718. See Note 2 to our audited consolidated financial statements included in our Annual Report on Form 10-K for a discussion of the assumptions made by XL Fleet in determining the grant-date fair value of our equity awards. |
| (2) | Includes the bonus payment made to Mr. Kazarinoff on March 31, 2021 in connection with services provided in fiscal 2020. |
| (3) | Mr. Kazarinoff joined XL Hybrids in October 2019 and the salary amount included in the table represents the prorated portion of his $325,000 annual salary received in 2019. |
| (4) | Reflects the prorated portion of the bonus payment made to Mr. Kazarinoff on March 15, 2020 in connection with services provided in fiscal 2019. |
| (5) | Consists of (i) $50,000 paid to Mr. Kazarinoff in connection with relocation expenses and (ii) $7,241 paid to Mr. Kazarinoff in connection with temporary living expenses. |
| (6) | Includes the bonus payment made to Mr. Hynes on March 31, 2021 in connection with services provided in fiscal 2020. |
Narrative Disclosure To Summary Compensation Table and Grants of Plan-Based Awards Table
Narrative Disclosure to Summary Compensation Table
For 2020 and 2019, the compensation program for XL Fleet’s named executive officers consisted of base salary and incentive compensation delivered in the form of cash bonuses and stock option awards.
Annual Base Salary
Base salary is set at a level that is commensurate with the executive’s duties and authorities, contributions, prior experience and sustained performance.
Bonus Compensation
From time to time, our board of directors or its compensation committee, in its discretion, may approve bonuses for our named executive officers based on individual performance, company performance or as otherwise determined to be appropriate. Bonuses are set at a level that is commensurate with the executive’s duties and authorities, contributions, prior experience and sustained performance. With respect to Mr. Kazarinoff, we have entered into an offer letter agreement, described below, which sets forth his cash bonus.
Health and Welfare Benefits and Perquisites
We provide benefits to our named executive officers on the same basis as provided to all of our employees, including: health, dental and vision insurance; life insurance; accidental death and dismemberment insurance; and short-and long-term disability insurance. We do not maintain any executive-specific benefit or perquisite programs.
Retirement Benefits
We provide a tax-qualified Section 401(k) plan for all employees, including the named executive officers. We do not provide a match for participants’ elective contributions to the 401(k) plan, nor do we provide to employees, including our named executive officers, any other retirement benefits, including but not limited to tax-qualified defined benefit plans, supplemental executive retirement plans and nonqualified defined contribution plans.
Employment Agreements with Named Executive Officers
We currently maintain the following:
Offer Letter with Dimitri N. Kazarinoff
We entered into an offer letter with Mr. Kazarinoff on September 30, 2019. Pursuant to the terms of the offer letter, Mr. Kazarinoff received a base salary at an annual rate of $325,000 for fiscal 2019, which base salary is to be reviewed on a periodic basis in accordance with our practices. Mr. Kazarinoff is eligible to receive an annual bonus, which bonus is based on established performance variables. The target bonus is equal to 30% of base salary and is expected to typically be earned at between 70% and 130% of that amount based on the performance variables. Mr. Kazarinoff also received payment of temporary living expenses through December 31, 2019 and, after 60 days of employment, $50,000 in relocation assistance. Pursuant to the terms of the offer letter, Mr. Kazarinoff also received an option to purchase 5,030,400 shares of our common stock. Such option vests in equal monthly installments over a 48 month period from the date of grant. In the event of a change of control (as defined in the 2010 Plan), provided that Mr. Kazarinoff has been employed by us for at least two years, the vesting of the option will be accelerated such that the greater of (i) 50% of the remaining unvested portion of the option, or (ii) the portion of the option that would have vested during the one-year period following the change of control, shall become immediately vested. In February 2021, our board of directors approved an increase of Mr. Kazarinoff’s base salary from $325,000 to $440,000 and an increase of Mr. Kazarinoff’s target cash bonus amount from 30% to 70% of base salary for the fiscal year ending December 31, 2021. The salary increase for Mr. Kazarinoff became effective as of March 16, 2021.
Agreements with Thomas J. Hynes, IIIapplicable year.
In February 2021, Director Compensationour board of directors approved an increase of Mr. Hynes’ base salary from $225,000 to $372,500. The salary increase for Mr. Hynes became effective as of March 16, 2021. Mr. Hynes is eligible to receive an annual bonus, which bonus is based on established performance variables. The target bonus for 2020 was equal to $80,000. Also in February 2021, our board of directors approved a target cash bonus amount equal to 70% of Mr. Hynes’ base salary for the fiscal year ending December 31, 2021. Mr. Hynes has entered into an Employee Covenants Agreement containing customary restrictive provisions including covenants related to confidentiality and non-disclosure, assignment of inventions and a one-year non-solicitation and non-competition. Mr. Hynes was granted an option in May 2018 to purchase 785,948 shares of our common stock.
Potential Payments and Benefits upon Termination or Change in Control
Pursuant to the terms of Mr. Kazarinoff’s offer letter, if we terminate Mr. Kazarinoff’s employment without “Cause,” we will provide Mr. Kazarinoff with severance benefits equal to six months of his then current base salary, subject to the execution and non-revocation of a release of claims in a form satisfactory to the Company. “Cause” is defined in the offer letter as conduct by Mr. Kazarinoff which harms or would reasonably be expected to harm us, including the commission of fraud, misappropriation of funds, misconduct in the performance of duties, material breach of any of our policy’s, failure to perform the duties of the position, commission of a felony, or any criminal act involving dishonesty or theft, or material non-compliance with applicable business and legal standards, including with respect to workplace discrimination or harassment. On September 20, 2019, Mr. Kazarinoff entered into our standard Employee Covenants Agreement, which contains certain customary restrictive covenants.
Pursuant to the terms of Mr. Hynes’ agreement with the Company, in the event of a change of control (as defined in the 2010 Plan), the vesting of the option granted to Mr. Hynes will be accelerated such that the greater of (i) 50% of the remaining unvested portion of the option, or (ii) the portion of the option that would have vested during the one-year period following the change of control, shall become immediately vested.
Outstanding Equity Awards at 2020 Fiscal Year-End
The following table presents information regarding outstanding equity awards held by our named executive officers as of December 31, 2020.
| | Option Awards | | Name | Number
of
Securities
Underlying
Unexercised
Options
(#)
Exercisable | Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable | Equity Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#) | Option
Exercise
Price
($) | Option
Expiration
Date | | Dimitri Kazarinoff, Chief Executive Officer | 1,110,948 | 2,698,018(2) | — | 0.24 | 12/5/2029 | | Thomas J. Hynes, III, President | 595,111 | — | — | 0.24 | 11/21/2023 | | Thomas J. Hynes, III, President | 483,527 | 111,548(3) | — | 0.24 | 05/24/2028 |
| (1) | Each option was granted under the 2010 Plan, the terms of which are described below under “Equity Benefit Plans—XL Hybrids, Inc. 2010 Equity Incentive Plan.” In addition, each option originally covered shares of XL Hybrids common stock, and in connection with the Business Combination (as defined below), was assumed by XL Fleet and converted into an option to purchase shares of our common stock on the same terms applicable to the option immediately prior to being assumed, except adjustments to the number of shares subject to and the exercise price of the option were made in order to reflect the Business Combination and to preserve the value of the option, as described in more detail below under “Equity Benefit Plans—XL Hybrids, Inc. 2010 Equity Incentive Plan.” |
| (2) | Options vest over four years in equal monthly installments subject to continued service with us through each applicable vesting date. |
| (3) | Options vest over four years, with 25% vesting on the first anniversary of the vesting commencement date, and 6.25% vesting each quarter thereafter, subject to continued service with us through each applicable vesting date. |
Equity Benefit Plans
XL Fleet Corp. 2020 Equity Incentive Plan
In December 2020, our board of directors adopted, and our stockholders approved, the XL Fleet Corp. 2020 Equity Incentive Plan (the “2020 Plan”). The 2020 Plan became effective immediately upon the closing of the business combination between Pivotal Investment Corporation II (“Pivotal”) and XL Hybrids pursuant to that certain Agreement and Plan of Reorganization, dated as of September 17, 2020 (the “Business Combination”). As of December 31, 2020, there were no awards outstanding under the 2020 Plan.
Eligibility. The 2020 Plan allows for grants, under the directionNo member of our board of directors or compensation committee, as the plan administrator,who is also a member of stock options, stock appreciation rights, restricted and unrestricted stock awards, restricted stock units and other stock or cash-based awards to employees, consultants and directors who, in the opinion of the plan administrator, are in a position to make a significant contribution to our long-term success. All our and our affiliates employees, directors and consultants are eligible to participate in the 2020 Plan.
Shares Available for Issuance. The 2020 Plan provides for the future issuance of up to 12,800,000 shares of our common stock, plus (i) a number of additional shares to be issued if awards outstanding under the 2010 Plan are cancelled or expire on or after December 21, 2020, and (ii) an annual increase on the first day of each fiscal year during the period beginning on the first day of fiscal year 2021, and ending on the second day of fiscal year 2030, equal to the lesser of: (a) 5% of the number of outstanding shares of our common stock on such date; and (b) an amount determined by the plan administrator. Generally, shares of our common stock reserved for awards under the 2020 Plan that lapse or are forfeited will be added back to the share reserve available for future awards, and shares of our common stock tendered in payment for an award or shares of our common stock withheld for taxes are available again for future awards.
The aggregate grant date fair value of shares granted to any non-employee director under the 2020 Plan and any other cash compensation paid to any non-employee director in any calendar year may not exceed $750,000; increased to $1,000,000 in the year in which such non-employee director initially joins our board of directors.
Stock Options. Stock options granted under the 2020 Plan may either be incentive stock options (“ISOs”), which are intended to satisfy the requirements of Section 422 of the Internal Revenue Code (the “Code”), or non-qualified stock options, which are not intended to meet those requirements. ISOs may be granted to our and our affiliates employees. A maximum of 260,000,000 shares may be granted as ISOs under the 2020 Plan.
Non-qualified options may be granted to our affiliates and our affiliates’ employees, directors and consultants and the term of the option may not be longer than ten years. The exercise price of a stock option may not be less than 100% of the fair market value of our common stock on the date of grant. If an incentive stock option is granted to an individual who owns more than 10% of the combined voting power of all classes of our capital stock, the exercise price may not be less than 110% of the fair market value of our common stock on the date of grant and the term of the option may not be longer than five years.
Award agreements for stock options include rules for exercise of the stock options after termination of service. Options may not be exercised unless they are vested, and no option may be exercised after the end of the term set forth in the award agreement. Generally, stock options will be exercisable for three months after termination of service for any reason other than death or total and permanent disability, and for one year after termination of service on account of death or total and permanent disability, but will not be exercisable if the termination of service was due to cause.
Restricted Stock. Restricted stock is common stock that is subject to restrictions, including a prohibition against transfer and a substantial risk of forfeiture, until the end of a “restricted period” during which the grantee must satisfy certain time or performance-based vesting conditions. If the grantee does not satisfy the vesting conditions by the end of the restricted period, the restricted stock is forfeited. During the restricted period, the holder of restricted stock has the rights and privileges of a regular stockholder, except that generally dividend equivalents may accrue but shall not be paid during the restricted period, and the restrictions set forth in the applicable award agreement apply. For example, the holder of restricted stock may vote the restricted shares, but he or she may not sell the shares until the restrictions are lifted.
Other Stock-Based Awards. The 2020 Plan also authorizes the grant of other types of stock-based compensation including, but not limited to stock appreciation rights, phantom stock awards, and stock unit awards. The plan administrator may award such stock-based awards subject to such conditions and restrictions as it may determine. These conditions and restrictions may include continued employment through a specified restricted period or achievement of one or more performance goals.
Restricted Stock Units. Restricted stock units are phantom shares that vest in accordance with terms and conditions established by the plan administrator and when the applicable restrictions lapse, the grantee shall be entitled to receive a payout in cash, shares or a combination thereof based on the number of restricted stock units as specified in the award agreement. Dividend equivalents may accrue but shall not be paid prior to and only to the extent that, the restricted stock unit award vests.
Plan Administration. In accordance with the terms of the 2020 Plan, our board of directors may authorize our compensation committee to administer the 2020 Plan. The compensation committee may delegate part of its authority and powers under the 2020 Plan to one or more of our directors and/or officers, but only the compensation committee can make awards to participants who are subject to the reporting and other requirements of Section 16 of the Exchange Act. In accordance with the provisions of the 2020 Plan, the plan administrator determines the terms of awards, including:
| · | which employees, directors and consultants will be granted awards; |
| · | the number of shares subject to each award; |
| · | the vesting provisions of each award; |
| · | the termination or cancellation provisions applicable to awards; and |
| · | all other terms and conditions upon which each award may be granted in accordance with the 2020 Plan. |
In addition, the plan administrator may, in its discretion, amend any term or condition of an outstanding award provided (i) such term or condition as amended is permitted by the 2020 Plan, and (ii) any such amendment shall be made only with the consent of the participant to whom such award was made, if the amendment is adverse to the participant unless such amendment is required by applicable law or necessary to preserve the economic value of such award.
Stock Dividends and Stock Splits. If our common stock shall be subdivided or combined into a greater or smaller number of shares or if we issue any shares of our common stock as a stock dividend, the number of shares of our common stock deliverable upon exercise of an option issued or upon issuance of an award shall be appropriately increased or decreased proportionately, and appropriate adjustments shall be made in the exercise price per share of stock options or purchase price, if any, and performance goals applicable to performance-based awards, if any, to reflect such subdivision, combination or stock dividend.
Corporate Transactions. Upon a merger or other reorganization event, our board of directors, may, in its sole discretion, take any one or more of the following actions pursuant to the 2020 Plan, as to some or all outstanding awards:
| · | provide that all outstanding options shall be assumed or substituted by the successor corporation; |
| · | upon written notice to a participant provide that the participant’s unexercised options will terminate immediately prior to the consummation of such transaction unless exercised by the participant; |
| · | in the event of a merger pursuant to which holders of our common stock will receive a cash payment for each share surrendered in the merger, make or provide for a cash payment to the participants equal to the difference between the merger price times the number of shares of our common stock subject to such outstanding options, and the aggregate exercise price of all such outstanding options, in exchange for the termination of such options; |
| · | provide that outstanding awards shall be assumed or substituted by the successor corporation, become realizable or deliverable, or restrictions applicable to an award will lapse, in whole or in part, prior to or upon the merger or reorganization event; and |
| · | with respect to stock grants and in lieu of any of the foregoing, our board of directors or an authorized committee may provide that, upon consummation of the transaction, each outstanding stock grant shall be terminated in exchange for payment of an amount equal to the consideration payable upon consummation of such transaction to a holder of the number of shares of our common stock comprising such award (to the extent such stock grant is no longer subject to any forfeiture or repurchase rights then in effect or, at the discretion of our board of directors or an authorized committee, all forfeiture and repurchase rights being waived upon such transaction). |
Amendment and Termination. The 2020 Plan may be amended by our stockholders. It may also be amended by our board of directors or the compensation committee, provided that any amendment which is of a scope that requires stockholder approval as required by (i) the rules of the New York Stock Exchange or (ii) in order to ensure favorable federal income tax treatment for any ISOs under Section 422 of the Code, is subject to obtaining such stockholder approval. However, no such action may adversely affect any rights under any outstanding award without the holder’s consent unless such amendment is required by applicable law or necessary to preserve the economic value of such award.
Duration of Plan. The 2020 Plan will expire by its terms on December 20, 2030.
XL Hybrids, Inc. 2010 Equity Incentive Plan
XL Hybrids’ board of directors adopted, and XL Hybrids’ stockholders approved, the 2010 Equity Incentive Plan (the “2010 Plan”) in 2010. In connection with our Business Combination, our board of directors approved the assumption of the 2010 Plan. The 2010 Plan has been periodically amended, most recently in 2020 in order to increase the number of shares of our common stock available for issuance pursuant to the 2010 Plan. The 2010 Plan permitted the grant of ISOs, non-qualified stock options and restricted stock awards. ISOs may have been granted only to our employees and to any of our subsidiary corporation’s employees. All other awards may have been be granted to our employees, directors and consultants and to any of our subsidiary corporation’s employees or consultants. As of December 31, 2020, stock options to purchase 10,975,222 shares of XL Fleet’s common stock with a weighted-average exercise price of $0.57 per share were outstanding.
Administration. Our board of directors or a committee delegated by our board of directors will administer the 2010 Plan. Subject to the terms of the 2010 Plan, the administrator has the power to, among other things, determine the eligible persons to whom, and the times at which, awards were granted, to determine the terms and conditions of each award (including the number of shares subject to the award, the exercise price of the award, if any, and when the award will vest and, as applicable, become exercisable), to modify or amend outstanding awards, or accept the surrender of outstanding awards and substitute new awards, to accelerate the time(s) at which an award may vest or be exercised, and to construe and interpret the terms of the 2010 Plan and awards granted thereunder.
Options. Our employees and service providers historically received stock options pursuant to the 2010 Plan. With respect to the options granted to Mr. Kazarinoff, the awards were granted in the form of ISOs. The exercise price per share of options granted under the 2010 Plan must be at least 100% of the fair market value per share of our common stock on the grant date or, in the case of ISOs that are subsequently modified, on the date of such modification. Subject to the provisions of the 2010 Plan, the administrator will determine the other terms of options, including any vesting and exercisability requirements, the method of payment of the option exercise price, the option expiration date, and the period following termination of service during which options may remain exercisable.
Changes to Capital Structure. In the event of certain changes to our capital structure, such as a stock dividends, stock splits or reverse stock splits, appropriate adjustments will be made to (a) the number of shares available for issuance under the 2010 Plan, and (b) the number of shares covered by and, as applicable, the exercise price and the kind of underlying security of each outstanding award granted under the 2010 Plan. In the event of a change of control, our board of directors or committee administering the 2010 Plan can take one or more of the following actions to provide for: (i) the purchase of outstanding options for an amount equal to the amount that could have been obtained upon the exercise of the option and sale of the underlying stock had such option been currently exercisable, or the replacement of options with other rights or property, (ii) the accelerated vesting of options prior to the change of control, (iii) the assumption of options by the successor or surviving corporation, or (iv) the termination of options prior to the change of control.
Plan Amendment or Termination. Our board of directors has the power to amend, modify, or terminate the 2010 Plan at any time. Our board of directors must obtain stockholder approval of any plan amendment to the extent required.
Nonqualified Deferred Compensation
We do not have any nonqualified defined contribution plans or other deferred compensation plan.
Director Compensation
In 2019, no director receivedmanagement receives cash, equity or other non-equitynon-equity compensation for service on our board of directors. In 2022 we approved the following Non-Employee Director Compensation Policy that is designed to align compensation with our business objectives and the creation of stockholder value, while enabling us to attract, retain, incentivize and reward directors who contribute to our long-term success.
Non-Employee Director Compensation Policy Annual Equity Award. Under the non-employeenon-employee director compensation policy, each non-employeenon-employee director of the Company will receive a $150,000 annual equity award, such award comprisingcomprised solely of equal parts stock options and restricted stock units.RSUs. The chair of our board of directors will receive an additional $20,000 annual equity award, such grant comprisingcomprised solely of equal parts stock options and restricted stock units. The value of the annual equity awards will be calculated using a Black-Scholes valuation. The awards will be granted on the date of each annual meeting of stockholders at which the director is elected to our board of directors or continues to serve as a director. Each grant will vest in full on the first anniversary of the grant date. 26 Table of Contents Initial Equity Award.Upon initial election to our board of directors, each new non-employeenon-employee director of the Company will receive an initial equity award equal to 150% of the annual equity award, such award comprising of equal parts stock options and restricted stock units. The value of the initial equity award will be calculated using a Black-Scholes valuation. The initial equity award will vest in equal installments on the first, second and third anniversary of the date of the grant. The initial equity award will not be granted to any new non-employee director of the Company who served as a director of Pivotal or XL Hybrids immediately prior to the consummation of our Business Combination. Annual Cash Retainer. Each non-employeenon-employee director of the Company will receive an annual cash retainer of $50,000 for his or her service on our board of directors, and the chair of our board will receive an additional $20,000 cash retainer. Each member of the audit, compensation and nominating and corporate governance committees will receive an annual cash retainer of $10,000, $7,500 and $5,000, respectively. In addition, the chair of each of the audit, compensation and nominating and corporate governance committees will receive an additional cash retainer of $20,000, $15,000 and $10,000, respectively. The annual cash retainers, as applicable, will be payable in quarterly installments, in arrears, at the end of each calendar quarter for the duration of such non-employeenon-employee director’s service on our board of directors or committee. Director Compensation Name | | Fees earned or
paid in cash
($) | | Stock
awards
($)(4) | | Total
($) | (a) | | (b) | | (c) | | (h) | Christopher Hayes | | 77,500 | | 150,000 | | 227,500 | Deb Frodl(1) | | 95,000 | | 150,000 | | 245,000 | Jon Ledecky | | 50,000 | | 150,000 | | 200,000 | Kevin Griffin | | 57,500 | | 150,000 | | 207,500 | Niharika Ramdev(2) | | 30,000 | | 70,497 | | 100,497 | Sarah Sclarsic(3) | | 60,000 | | 150,000 | | 210,000 | John P. Miller | | 92,500 | | 375,000 | | 467,500 |
(2) Ms. Ramdev’s term as a director expired on the date of the 2022 annual meeting. She received, pursuant to the approval of the Board, a pro rata RSU award of 10,352 shares for service rendered prior to the expiration of her term as director. The following table shows the total compensation accrued during the fiscal year endedsummarizes share information, as of December 31, 2020 to the members of our board of directors. | Name | Fees Earned or
Paid in Cash
($)(1) | Stock
Awards
($) | Option
Awards
($) | Total
($) | | Debora M. Frodl, Chair of the Board | 31,770.83(2) | — | — | 31,770.83 | | Declan Flanagan, Director | 1,510.42 | — | — | 1,510.42 | | Kevin Griffin, Director | 1,041.67 | — | — | 1,041.67 | | Christopher Hayes, Director | 6,614.58(2) | — | — | 6,614.58 | | Jon Ledecky, Director | 1,041.67 | — | — | 1,041.67 | | Niharika Ramdev, Director | 1,822.92 | — | — | 1,822.92 | | Sarah Sclarsic, Director | 1,250.00 | — | — | 1,250.00 |
| (1) | Includes the pro rata portion of the annual cash retainer paid to each director2022, for services rendered in December 2020. |
| (2) | Includes cash compensation paid in connection with services rendered to XL Hybrids in fiscal year 2020. |
EQUITY COMPENSATION PLAN INFORMATION
The following table provides certain aggregate information with respect to all of the Company’s equity compensation plans in effect as of December 31, 2020.
| Plan category | Number of
securities to be
issued upon
exercise of
outstanding
options,
warrants
and rights | Weighted-average
exercise price
of outstanding
options, warrants
and rights | Number of
securities
remaining
available for
future issuance
under equity
compensation plans
(excluding securities
reflected in the
second column) | | Equity compensation plans approved by security holders (1) | 10,975,222 | $ 0.57 | 12,800,000 | | Equity compensation plans not approved by security holders | — | — | — | | Total | 10,975,222 | $ 0.57 | 12,800,000 |
| (1) | These plans consist of: (i) the 2020 Plan, which includes 12,800,000 shares of our common stock available for issuance, and (ii) the 2010 Plan, which has no shares of our common stock available for issuance. |
Our only equity compensation plans are the 2020 Plan and 2010 Plan. A detailed descriptionarrangements, consisting of the terms of the 2020 Plan and 2010 Plan are included above under the headings “Equity Benefit Plans – XL Fleet Corp. 2020 Equity Incentive Plan” and “Equity Benefit Plans – XL Hybrids, Inc. 2010 Equity Incentive Plan.” New awards may only be made under the 2020 Equity Incentive Plan.
Equity Plan Category | | Number of
Shares To Be
Issued Upon
Exercise Of
Outstanding
Options and
Vesting of
Outstanding
RSUs(1) | | Weighted-
Average
Exercise Price
Of
Outstanding
Options(1) | | Shares
Remaining
Available For
Future
Issuance
Under Equity
Compensation
Plans | Equity compensation plans approved by shareholders | | 15,923,978 | | $ | 1.39 | | 16,673,046 | Equity compensation plans not approved by shareholders | | — | | | — | | — | Total | | 15,923,978 | | $ | 1.39 | | 16,673,046 |
27 Table of Contents REPORT OF AUDIT COMMITTEE The audit committee of our board of directors is currently composed of three members, each of which consists entirely of directors who meetis independent as required by the independence and experience requirementslisting standards of the New York Stock Exchange and the rules of the Securities and Exchange Commission. The Board has furnisheddetermined that each member of the following report:Audit Committee is financially literate. The Audit Committee operates under a written charter adopted by the board of directors, found at the Company’s website, www.sprucepower.com, under the Governance tab. The Audit Committee reviews and assesses the adequacy of its charter and the Audit Committee’s performance on an annual basis. The audit committee assistsManagement has primary responsibility for our financial statements and the reporting process, including the systems of internal control over financial reporting. As more fully described in its charter adopted by our board of directors, the primary purpose of the Audit Committee is to assist the board of directors in overseeing and monitoring the integrity of our financial reporting process,statements, compliance with legal and regulatory requirements and the qualityqualifications, performance and independence of internal andthe external audit processes. This committee’s role and responsibilities are set forth in our charter adopted by our board of directors,auditors.
Marcum LLP (“Marcum”), which is available on our website at www.xlfleet.com. This committee reviews and reassesses our charter annually and recommends any changes to our board of directors for approval. The audit committee isserved as the Company’s independent registered public accounting firm through March 30, 2023, was responsible for overseeing our overallplanning and conducting an audit of the Company’s annual financial statements and a review of the Company’s quarterly financial statements. Further, Marcum was responsible for expressing opinions on the Company’s financial statements and internal control over financial reporting process, and for the appointment, compensation, retention, and oversightbased on its audits. As part of the work of Marcum LLP. In fulfilling its responsibilities, for the Audit Committee meets periodically with Company management, Marcum and members of the internal audit function (established in during the fiscal year 2022), both separately and collectively. The Audit Committee reviewed and discussed the Company’s audited financial statements for the fiscal year December 31, 2020,2022 with management and Marcum and discussed with Marcum those matters required to be discussed by the audit committee tookapplicable requirements of the following actions: | · | ReviewedPublic Company Accounting Oversight Board (“PCAOB”) and the SEC. The Audit Committee received the written disclosures and the letter from Marcum required by applicable requirements of the PCAOB regarding Marcum’s communications with the Audit Committee concerning independence, and has discussed the audited financial statements for the fiscal year ended December 31, 2020, with management and Marcum LLP, our independent registered public accounting firm; |
| · | Discussed with Marcum LLP the matters required to be discussed in accordance with Auditing Standard No. 1301- Communications with audit committees; and |
| · | Received written disclosures and the letter from Marcum LLP regarding its independence as required by applicable requirements of the Public Company Accounting Oversight Board regarding Marcum LLP’s communications with the audit committee and the audit committee further discussed with Marcum LLP their independence. The audit committee also considered the status of pending litigation, taxation matters and other areas of oversight relating to the financial reporting and audit process that the committee determined appropriate. |
Based on the audit committee’s review of the audited financial statementsthese reviews and discussions with management and Marcum, LLP, the audit committeeAudit Committee recommended to ourthe board of directors that the Company’s audited financial statements be included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 for filing2022 be included in its Annual Report on Form 10-K filed with the SEC.Securities and Exchange Commission. Members of the XL Fleet audit committee
Niharika Ramdev
Debora M. Frodl
Sarah Sclarsic
| | Members of the Company’s Audit Committee |
25
28 Table of Contents CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS Our audit committee charterAudit Committee Charter requires all future transactions between us and any director, executive officer, holder of 5% or more of any class of our capital stock or any member of the immediate family of, or entities affiliated with, any of them, or any other related persons, as defined in Item 404 of Regulation S-K,S-K, or their affiliates, in which the amount involved is equal to or greater than $120,000, be approved in advance by our audit committee. Any request for such a transaction must first be presented to our audit committee for review, consideration and approval. In approving or rejecting any such proposal, our audit committee is to consider all available information deemed relevant by the audit committee, including, but not limited to, the extent of the related person’s interest in the transaction, and whether the transaction is on terms no less favorable to us than terms we could have generally obtained from an unaffiliated third party under the same or similar circumstances. Related Party Transactions Our board of directors adopted a written related person transactions policy that sets forth policies and procedures regarding the identification, review, consideration and oversight of related person transactions. For purposes of this policy only, a related person transaction is a transaction, arrangement or relationship (or any series of similar transactions, arrangements or relationships) in which we or any of its subsidiaries, are participants involving an amount that exceeds $120,000, in which any related person has a material interest. Transactions involving compensation for services provided to us or any of our subsidiaries as an employee, consultant or director will not be considered related person transactions under this policy. A related person is any executive officer, director, nominee to become a director or a holder of more than 5% of any class of our voting securities (including our common stock), including any of their immediate family members and affiliates, including entities owned or controlled by such persons. Under the related person transaction policy, the related person in question or, in the case of transactions with a holder of more than 5% of any class of our voting securities, an officer with knowledge of a proposed transaction, will be required to present information regarding the proposed related person transaction to our audit committee (or to another independent body of our board of directors) for review. To identify related person transactions in advance, we expect to rely on information supplied by our executive officers, directors and certain significant stockholders. In considering related person transactions, our audit committee is expected to take into account the relevant available facts and circumstances, which may include, but are not limited to: • the risks, costs, and benefits to us; | · | the risks, costs, and benefits to us; |
| · | the impact on a director’s independence in the event the related person is a director, immediate family member of a director or an entity with which a director is affiliated; |
| · | the terms of the transaction; |
| · | the availability of other sources for comparable services or products; and |
| · | • the impact on a director’s independence in the event the related person is a director, immediate family member of a director or an entity with which a director is affiliated; • the terms of the transaction; • the availability of other sources for comparable services or products; and • the terms available to or from, as the case may be, unrelated third parties. |
Our audit committee will approve only those transactions that it determines are fair to us and in our best interests. All of theThe transactions described above were entered into prior tobelow occurred after the adoption of suchthe Company’s related persons transactions policy. Lock-Up Agreement
In connection with the consummation of the Business Combination, certain of XL Hybrids’ stockholders and each initial stockholder of Pivotal entered into a Lock-Up Agreement dated September 17, 2020 with Pivotal which provides that the common stock issued to such holders in the Business Combination is subject to a 12-month lock-up period during which the holders have agreed, subject to certain restrictions, not to, directly or indirectly, sell, transfer or otherwise dispose of their shares to be issued in the Business Combination, which period may be earlier terminated if the reported closing sale price of our common stock equals or exceeds $15.00 per share (subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations or other similar transactions) for a period of 20 trading days during any 30-trading day period commencing at least 150 days following the consummation of the Business Combination, subject to certain exceptions.
Registration Rights Agreement
In connection with the consummation of the Business Combination and as contemplated by that certain Agreement and Plan of Reorganization, dated as of September 17, 2020, by and among Pivotal, PIC II Merger Sub Corp., a wholly owned subsidiary of Pivotal, and XL Hybrids (the “Merger Agreement”), certain stockholders of XL Hybrids and certain stockholders of Pivotal, including the holders of the Pivotal Class B Common Stock (such Pivotal Class B Common Stock was reclassified on the closing date of the Business Combination as XL Fleet common stock) entered into a Registration Rights Agreement with us, dated September 17, 2020 (the “Registration Rights Agreement”). Pursuant to the Registration Rights Agreement, we agreed that, no later than 45 calendar days after the closing of the Business Combination, we would file with the SEC (at our sole cost and expense) a registration statement registering the resale of the registrable securities, and we will use our reasonable best efforts to have such registration statement declared effective by the SEC as soon as reasonably practicable after the filing thereof. Such stockholders were also granted certain demand registration rights and piggyback registration rights. The Registration Rights Agreement does not provide for the payment of any cash penalties by us if we fail to satisfy any of our obligations under the Registration Rights Agreement.
Indemnification Agreements On December 21, 2020, in connection with the consummation of the Business Combination, and as contemplated by the Merger Agreement, weWe have entered into indemnification agreements with each of our directors and executive officers. These indemnification agreements require us to indemnify such directors and executive officers for certain expenses, including reasonable attorneys’ fees, judgments (including any pre and post-judgmentpost-judgment interest) penalties, fines, liabilities, and settlement amounts incurred by a director or executive officer in any action or proceeding arising out of their services as one of our directors or executive officers or any other company or enterprise to which the person provides services at our request.
29 Table of Contents Lease Agreement On March 16, 2012, wethe Company entered into a lease agreement with Red Line Limit, LLC, as landlord, in connection with ourthe lease of certain property located in Brighton, Massachusetts. The property is personally owned by James Davis, a holder of more than 5% of our common stock. Mr. Davis’ interest is limited to his ownership of the property. The lease agreement has been extended through February 29, 2022. Pursuant toCompany vacated this location at the termsexpiration of the lease, agreement, we currently pay monthlyon July 31, 2022. For fiscal 2022, the Company paid rent installments of $19,473 for this property. We made payments of approximately $235,000$136,311; in 2019 and2021 the amount was approximately $235,000 in 2020 in connection with the lease agreement. 30 Table of Contents Proposal No. 1 ELECTION OF DIRECTORS (Notice Item 1) On February 26, 2021 our board of directors nominated Declan P. Flanagan, Debora M. Frodl and Sarah Sclarsic for election at the Annual Meeting. Our board of directors currently consists of ninesix members, classified into three classes as follows: Kevin Griffin, Christopher Hayes and Niharika Ramdev constitute a class with a term ending in 2022; Thomas J. Hynes III, Dimitri N. KazarinoffChristian Fong and Jonathan J. Ledeckyconstitute a class with a term ending in 2023; and Declan P. Flanagan, Debora M. Frodl and Sarah Sclarsic constitute a class with a term which expires at the upcoming Annual Meeting.annual meeting; stockholders are asked to elect Mr. Fong and Mr. Ledecky for a three year term expiring in 2026. Eric Tech and John P. Miller constitute a class with a term which expires in 2024; due to the need to rebalance the classes to ensure equal director classes, Mr. Tech has been moved into this class, and stockholders are requested to elect Mr. Tech for a one year term which expires in 2024. Kevin Griffin and Christopher Hayes constitute a class with a term which expires in 2025. At each annual meeting of stockholders, directors are elected for a full term of three years to succeed those directors whose terms are expiring.
Our board of directors has voted to nominate Declan P. Flanagan, Debora M. FrodlMr. Fong and Sarah SclarsicMr. Ledecky for election at the Annual Meetingannual meeting for a term of three years to serve until the 2026 annual meeting of stockholders, and Mr. Tech for a one year term to expire at the 2024 annual meeting of stockholders, and until their respective successors are elected and qualified. TheMr. Miller, a Class A director, and the Class B directors (Kevin(Kevin Griffin and Christopher Hayes and Niharika Ramdev) and the Class C directors (Thomas J. Hynes III, Dimitri N. Kazarinoff and Jonathan J. Ledecky)Hayes) will serve until the Annual Meetings of Stockholders to be held in 20222024 and 2023,2025, respectively, and until their respective successors have been elected and qualified. Unless authority to vote for any of these nominees is withheld, the shares represented by the enclosed proxy will be voted FOR the election of Declan P. Flanagan, Debora M. FrodlChristian Fong, Jonathan J. Ledecky and Sarah SclarsicEric Tech as directors. In the event that any nominee becomes unable or unwilling to serve, the shares represented by the enclosed proxy will be voted for the election of such other person as our board of directors may recommend in that nominee’s place. We have no reason to believe that any nominee will be unable or unwilling to serve as a director. A plurality of the shares voted for each nominee at the Annual Meeting is required to elect each nominee as a director. Our board of directors Recommends
The Election Of Declan P. Flanagan, Debora M. Frodl and Sarah Sclarsic
CHRISTIAN FONG, Jonathan J. Ledecky AND ERIC TECH As Directors, And Proxies Solicited By Our board of directors
Will Be Voted In Favor Thereof Unless A Stockholder
Has Indicated Otherwise On The Proxy. 31 Table of Contents Proposal No. 2 ratification of selection of INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (Notice Item 2) Change and Engagement of Independent Registered Public Accounting Firms The audit committeeAudit Committee has appointed MarcumDeloitte & Touche LLP (“Marcum”Deloitte & Touche”), as our independent registered public accounting firm, to audit our financial statements for the fiscal year ending December 31, 2021. Marcum LLP has served as our independent registered public accounting firm since March 20, 2019.2023. Our board of directors proposes that the stockholders ratify this appointment. Marcum audited our financial statements for the fiscal years ended December 31, 2020 and 2019. We expect that representatives of MarcumDeloitte & Touche will be present at the annual meeting, will be able to make a statement if they so desire, and will be available to respond to appropriate questions. On April 5, 2023, we filed a Current Report on Form 8-K (the “Form 8-K”) with the SEC reporting that, on March 30, 2023, we dismissed Marcum LLP (“Marcum”) as our independent registered public accounting firm and appointed Deloitte & Touche as our new independent registered public accounting firm, subject to the completion of Deloitte & Touche’s customary client acceptance procedures, which were completed on April 19, 2023, and Deloitte & Touche was engaged as our new independent registered public accounting firm on April 19, 2023. The decision to dismiss Marcum and to retain Deloitte & Touche was approved by our Audit Committee. Marcum’s reports on the Company’s consolidated financial statements for each of the fiscal years ended December 31, 2022 and December 31, 2021 did not contain an adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope or accounting principles. During the Company’s two most recent fiscal years and through March 30, 2023, there were no disagreements with Marcum on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure which, if not resolved to Marcum’s satisfaction, would have caused them to make reference to the subject matter in connection with their report on the Company’s consolidated financial statements for such years; and there were no reportable events, as listed in Item 304(a)(1)(v) of SEC Regulation S-K, except that Marcum concurred with the Company’s assessment of material weaknesses related to the Company’s internal control over financial reporting as of December 31, 2022 and 2021. In deciding to appoint Marcum,Deloitte & Touche, the audit committeeAudit Committee reviewed auditor independence issues and existing commercial relationships with MarcumDeloitte & Touche and concluded that MarcumDeloitte & Touche has no commercial relationship with the Company that would impair its independence for the fiscal year ending December 31, 2021.2023. We provided Marcum with a copy of the disclosures in the Form 8-K prior to filing the Form 8-K with the SEC. We requested that Marcum furnish us with a letter addressed to the SEC stating whether Marcum agrees with the statements made by us regarding Marcum in the Form 8-K and, if not, stating the respects in which it does not agree. A copy of Marcum’s letter dated April 5, 2023 to the SEC, stating that it agrees with the statements made in the Form 8-K, was filed as Exhibit 16.1 to an amendment to the Form 8-K filed on April 7, 2023. During the fiscal years ended December 31, 2022 and December 31, 2021, and the subsequent interim period through April 19, 2023, the Company did not consult with Deloitte & Touche regarding any of the matters or events set forth in Item 304(a)(2)(i) and (ii) of SEC Regulation S-K. Fees Billed by Marcum The following table presents fees for professional audit services rendered by Marcum for the audit of the Company’s annual financial statements for the years ended December 31, 20202022, and 2019,December 31, 2021, and fees billed for other services rendered by Marcum during those periods. | | 2022 | | 2021 | Audit Fees:(1) | | $ | 633,450 | | $ | 573,385 | Audit Related Fees:(2) | | $ | 22,660 | | $ | 31,190 | Tax Fees:(3) | | | — | | $ | — | Total Aggregate Fees: | | $ | 656,110 | | $ | 604,575 |
| | | 2020 | | 2019 | | Audit fees:(1) | | 346,080 | | 306,445 | | Audit related fees:(2) | | 106,070 | | – | | Tax fees:(3) | | 689 | | 7,210 |
| (1) | Fees for both years consisted of fees for professional services associated with the annual consolidated financial statement audits, statutory filings, consents and assistance with and review of documents filed with the SEC. |
| (2) | Consists of fees associated with services related to the review of accounting for significant transactions and other services that were reasonably related to the performance of audits or reviews of our financial statements and were not reported above under “Audit fees.” |
| (3) | Tax fees consist principally of assistance with matters related to corporate tax compliance and reporting. |
32 Table of Contents There were no other fees incurred during the 2022 or 2021 fiscal year. The percentage of services set forth above in the categories audit fees, audit(audit related fees and tax fees,fees), that were approved by the audit committeeAudit Committee pursuant to Rule 2-01(c)2-01(c)(7)(i)(C) (relating to the approval of a de minimis amount of non-auditnon-audit services after the fact but before completion of the audit), was 0%. Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Public Accountant Consistent with SEC policies regarding auditor independence, the audit committeeAudit Committee has responsibility for appointing, setting compensation and overseeing the work of our independent registered public accounting firm. In recognition of this responsibility, the audit committeeAudit Committee has established a policy to pre-approvepre-approve all audit and permissible non-auditnon-audit services provided by our independent registered public accounting firm. Prior to engagement of an independent registered public accounting firm for the next year’s audit, management will submit an aggregate of services expected to be rendered during that year for each of four categories of services to the audit committeeAudit Committee for approval. 1. Audit services include audit work performed in the preparation of financial statements, as well as work that generally only an independent registered public accounting firm can reasonably be expected to provide, including comfort letters, statutory audits, and attest services and consultation regarding financial accounting and/or reporting standards. | 1. | Audit services include audit work performed in the preparation of financial statements, as well as work that generally only an independent registered public accounting firm can reasonably be expected to provide, including comfort letters, statutory audits, and attest services and consultation regarding financial accounting and/or reporting standards. |
| 2. | Audit-Related services are for assurance and related services that are traditionally performed by an independent registered public accounting firm, including due diligence related to mergers and acquisitions, employee benefit plan audits, and special procedures required to meet certain regulatory requirements. |
| 3. | Tax services include all services performed by an independent registered public accounting firm’s tax personnel except those services specifically related to the audit of the financial statements, and includes fees in the areas of tax compliance, tax planning, and tax advice. |
| 4. | Other Fees2. Audit-Related services are for assurance and related services that are traditionally performed by an independent registered public accounting firm, including due diligence related to mergers and acquisitions, employee benefit plan audits, and special procedures required to meet certain regulatory requirements. 3. Tax services include all services performed by an independent registered public accounting firm’s tax personnel except those services specifically related to the audit of the financial statements, and includes fees in the areas of tax compliance, tax planning, and tax advice. 4. Other Fees are those associated with services not captured in the other categories. The Company generally does not request such services from our independent registered public accounting firm. |
Prior to engagement, the audit committee pre-approvesAudit Committee pre-approves these services by category of service. The fees are budgeted and the audit committeeAudit Committee requires our independent registered public accounting firm and management to report actual fees versus the budget periodically throughout the year by category of service. During the year, circumstances may arise when it may become necessary to engage our independent registered public accounting firm for additional services not contemplated in the original pre-approval.pre-approval. In those instances, the audit committeeAudit Committee requires specific pre-approvalpre-approval before engaging our independent registered public accounting firm. The audit committeeAudit Committee may delegate pre-approvalpre-approval authority to one or more of its members. The member to whom such authority is delegated must report, for informational purposes only, any pre-approvalpre-approval decisions to the audit committeeAudit Committee at its next scheduled meeting. The percentage of the hours expended on Marcum’s engagement to audit our financial statements for the fiscal year ended December 31, 20202022 that was attributed to work performed by persons other than Marcum full-time,full-time, permanent employees was 0%. In the event the stockholders do not ratify the appointment of MarcumDeloitte & Touche as our independent registered public accounting firm, the audit committeeAudit Committee will reconsider its appointment. 33 Table of Contents Vote Required for Approval and Board Recommendation The affirmative vote of a majority of the votes cast for this proposal is required to ratify the appointment of the independent registered public accounting firm. Our board of directors Recommends A Vote To
Ratify The Appointment Of MarcumDELOITTE & TOUCHE LLP
As Our Independent Registered Public Accounting Firm
FOR FISCAL YEAR 2023, And Proxies Solicited By Our board of directors
Will Be Voted In Favor Of Such Ratification
Unless A Stockholder Indicates Otherwise On The Proxy. 34 Table of Contents Proposal No. 3 ADVISORY VOTE ON EXECUTIVE COMPENSATION (Notice Item 3) Proposal No. 3 provides stockholders the opportunity to cast an advisory vote to approve the compensation of our named executive officers. Please see the “Summary Compensation Table,” starting on page 22, for full details. Stockholders are being given the opportunity to endorse or not endorse our executive compensation programs and policies, and the total compensation paid to our named executive officers. This proposal is often called the “Say on Pay” proposal. Accordingly, our board of directors is asking our stockholders to indicate their support for the compensation of our named executive officers, as described in this proxy statement, by casting a non-binding advisory vote “FOR” the following resolution: “RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed pursuant to Item 402 of Securities and Exchange Commission Regulation S-K, including the compensation tables, narrative disclosures, and other related disclosure, is hereby approved.” Although this vote is non-binding, the Board values the opinions of our stockholders, and will consider the outcome of this vote when making future compensation decisions for our named executive officers. Approval of this advisory proposal will require the affirmative vote of a majority of the votes cast in person or represented by proxy. Abstentions will not count as votes cast on this Proposal, so abstentions will have no effect on the outcome. Broker non-votes will not be considered to have voted on this Proposal, so will have no effect on the outcome. Our board of directors Recommends THAT YOU, ON A non-binding advisory basis, APPROVE THE COMPENSATION OF the named EXECUTIVE OFFICERS OF THE COMPANY BY VOTING “FOR” THIS PROPOSAL. Proxies Solicited By Our board of directors Will Be Voted In Favor OF THIS PROPOSAL Unless A Stockholder Has Indicated Otherwise On The Proxy. 35 Table of Contents CODE OF CONDUCT AND ETHICS We have adopted a code of conduct and ethics that applies to all of our employees, including our chief executive officer and chief financial and accounting officers. The text of the code of conduct and ethics is posted on our website at www.xlfleet.comwww.sprucepower.com under the Governance, Documents and Charters section of our Investors page and will be made available to stockholders without charge, upon request, in writing to the attention of our Corporate Secretary at XL Fleet Corp., 145 NewtonSpruce Power Holding Corporation, 1875 Lawrence Street, Boston, Massachusetts 02135.Suite 320, Denver, Colorado 80202. Disclosure regarding any amendments to, or waivers from, provisions of the code of conduct and ethics that apply to our directors, principal executive officer and principal financial officer will be included in a Current Report on Form 8-K8-K within four business days following the date of the amendment or waiver, unless website posting or the issuance of a press release of such amendments or waivers is then permitted by the rules of the New York Stock Exchange. DELINQUENT SECTION 16(A) REPORTS Section 16(a) of the Securities and Exchange Act of 1934 (the “Exchange Act”) requires Company directors, executive officers and other persons who beneficially own more than 10% of our common stock, to file reports with the SEC regarding their initial stock ownership and any changes in their stock ownership. Based solely on a review of the reports filed for the fiscal year and related written representations, we believe that all of our executive officers and directors filed the required reports on a timely basis under Section 16(a), with the exception of a Form 4 report filed by Mr. Tech on March 23, 2023 reporting transactions on December 9, 2022, February 21, 2023, March 1, 2023, March 2, 2023, March 6, 2023, and March 13, 2023, which were made to cover tax withholding obligations in connection with the vesting of restricted stock units. OTHER MATTERS Our board of directors knows of no other business which will be presented to the Annual Meeting.annual meeting. If any other business is properly brought before the Annual Meeting,annual meeting, proxies will be voted in accordance with the judgment of the persons named therein. 36 Table of Contents STOCKHOLDER PROPOSALS AND NOMINATIONS FOR DIRECTOR AT 2024 ANNUAL MEETING To be consideredAny stockholder who desires to submit a proposal for inclusion in the proxy statement relating to our 2022materials for the 2024 Annual Meeting of Stockholders wein accordance with Rule 14a-8 must submit the proposal in writing c/o Corporate Secretary, Spruce Power Holding Corporation, 1875 Lawrence Street, Suite 320, Denver, Colorado 80202. We must receive stockholder proposals (other than for director nominations) no later thana proposal by December 16, 2021. To be considered for presentation at the 2022 Annual Meeting, although not included in the proxy statement, proposals (including director nominations that are not requested to be included in our proxy statement) must be received no earlier than 12022, 2023 (120 days prior to the anniversary of the mailing date thatof this Proxy Statement) in order to consider it for inclusion in the proxy materials for the 2024 Annual Meeting of Stockholders.
Nominations for election of directors and proposals for other business intended to be presented at the 2024 Annual Meeting of Stockholders but not included in our Proxy Statement and proxy must be received at our principal offices no later than February 25, 2024, which is one year from90 calendar days prior to the anniversary of this year’s meeting date, and no laterearlier than 90January 26, 2024, which is 120 calendar days prior to the anniversary of this year’s meeting date, provided, however, that in the event that the 2024 Annual Meeting is called for a date that is one year fromnot within 30 days before or after the anniversary date of this year’s meeting date. Proposals that are notdate, such proposal must be received by us no later than the 10th day following the day on which the notice of the date of the 2024 Annual Meeting was mailed or public disclosure of the date of the 2024 Annual Meeting was made, whichever first occurs. The persons named as proxies in a timely mannerour proxy for the 2024 Annual Meeting will not be votedhave discretionary authority to vote the shares represented by such proxies on any such stockholder proposals, if presented at the 20222024 Annual Meeting.Meeting, without including information about the proposal in our materials. If the chairman of the meeting decides to present a proposal is received on time,despite its untimeliness, the people named in the proxies that management solicitssolicited by the Board of Directors for the meeting may still2024 Annual Meeting of Stockholders will have the right to exercise discretionary voting authoritypower with respect to such proposal. Any nominations or other proposals received from stockholders must be in full compliance with applicable laws and with our Bylaws. A copy of the full text of the Company’s current bylaws may be obtained upon written request to the Corporate Secretary at the address provided in the next sentence and online on the proposal under circumstances consistent with the proxy rules of the SEC.SEC’s website, www.sec.gov. All nominations and other stockholder proposals should be marked for the attention of Corporate Secretary, XL Fleet Corp.Spruce Power Holding Corporation, 1875 Lawrence Street, Suite 320, Denver, Colorado 80202. In addition to satisfying the requirements under our by-laws, 145 Newton Street, Boston Massachusetts 02135.to comply with the universal proxy rules, stockholders who intend to solicit proxies in support of director nominees other than the Company’s nominees must also provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act no later than March 26, 2024, which is 60 calendar days prior to the anniversary of this year’s meeting date. BY ORDER OF THE BOARD OF DIRECTORS | | | Stacey S. Constas | | | Corporate Secretary | | |  Denver, Colorado
Jim Berklas
General Counsel
Boston, Massachusetts
| | | April 15, 202120, 2023 | | |
37 Table of Contents 32
SPRUCE POWER HOLDING CORP. 1875 LAWRENCE ST SUITE 320 DENVER, CO 80202 SCAN TO VIEW MATERIALS & VOTE VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.com or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time on May 24, 2023. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. During The Meeting - Go to www.virtualshareholdermeeting.com/SPRU2023 You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time on May 24, 2023. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: V11327-P92930 KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. SPRUCE POWER HOLDING CORP. The Board of Directors recommends you vote FOR the following: For All Withhold All For All Except 1. To consider and act upon a proposal to elect to the Company’s Board of Directors the following three (3) nominees nominated by the Board of Directors: Nominees: 01) Christian Fong for a three (3) year term, expiring in 2026 02) Jonathan Ledecky for a three (3) year term, expiring in 2026 03) Eric Tech, for a one (1) year term, expiring in 2024 To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below. The Board of Directors recommends you vote FOR proposals 2 and 3: For Against Abstain 2. To ratify the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2023. 3. To approve a non-binding advisory proposal on executive compensation. NOTE: In their discretion, the proxies are authorized to vote upon such other matters as may properly come before the meeting. Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date Table of Contents |
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:The CEO Letter, Proxy Statement, and Annual Report are available at www.proxyvote.com. V11328-P92930 SPRUCE POWER HOLDING CORP. ANNUAL MEETING OF SHAREHOLDERS MAY 25, 2023 10:00 AM ET THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS The shareholder(s) hereby appoint(s) Christian Fong and Stacey Constas, or either of them, as proxies, each with the power to appoint (his/her) substitute, and hereby authorize(s) them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of Common and Preferred stock of SPRUCE POWER that the shareholder(s) are entitled to vote at the Annual Meetingof Shareholders to be held at 10:00 AM ET on May 25, 2023 virtually at www.virtualshareholdermeeting.com/SPRU2023and any adjournment or postponement thereof. This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors’ recommendations. The undersigned hereby acknowledges receipt of the Notice of Annual Meeting of Stockholders and accompany¬ing Proxy Statement, ratifies all that said proxies or their substitutes may lawfully do by virtue hereof, and re¬vokes all former proxies. Please sign exactly as your name appears hereon, date and return this proxy. Continued and to be signed on reverse side 
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