KEY ACHIEVEMENTS

Stakeholder Engagement

Engaged in Open Dialogue with Our Stakeholders
We identify our stakeholders as any individuals or group who are directly affected by Capstone’s business operations. These include: employees, investors, and the local communities where our businesses operate. We use a number of different means to communicate with our stakeholders.

Capstone’s stakeholder engagement mechanisms include:

Employees

• Employee satisfaction surveys
• Annual performance reviews
• Intranet site and quarterly employee newsletter used for internal communications
• Professional development opportunities
• Employee social and team-building events

 

Investors

• Retail and institutional roadshows
• Quarterly Reports
• Quarterly investor calls covering company performance and future outlook, including Q&A with senior management
• Dedicated IR team that responds to investor requests
• Timely disclosure announcing significant business activity
• Social media platforms updated regularly
• Annual General Meeting
• Participated in industry conferences

 

Communities

• Interaction with communities before, during and after the completion of development projects
• Employee volunteerism
  
• Donations to non-profit and charitable organizations
• Held community liaison committee (CLC) forums at wind development sites in accordance with Renewable Energy Approval policies to create a foundation for meaningful dialogue between local residents and Capstone

 

Philanthropy and Sponsorships

Created Meaningful Employee Engagement Opportunities Throughout the Organization
At our corporate office, we sponsored TREC Education’s Kids’ World of Energy Festival, which offers elementary school students in Toronto a unique range of hands-on workshops involving renewable energy, conservation, electricity and art. In addition to the sponsorship, five employees from our team volunteered at the festival.

Employees also participated in the Holiday Helpers program, a charity that provides personalized holiday packages to low income families in Toronto with young children; ran a Thanksgiving food drive in support of the Daily Bread Food Bank; and bought the right to dress casually on Fridays in support of local charities, including Second Harvest, Sick Kids Hospital, Covenant House, and the Toronto Humane Society.

Whitecourt Power donated to the Alberta Junior Forest Warden Association, an organization that provides opportunities for children ages 6–18 to get outdoors and participate in activities such as camping, canoeing and tree planting.

Erie Shores Wind Farm participated in Green Energy Doors Open Ontario, an initiative of the Ontario Sustainable Energy Association.

Cardinal Power provided two bursaries to graduating high school students, and made contributions to local charities and community events.

Glen Dhu Wind Farm provided financial support to two local fire departments — Barney’s River Fire Department and Merigomish and District Volunteer Fire Department.

The Sechelt Hydro power facility returned as a sponsor of the Annual Sechelt Arts Festival, a multi-dimensional celebration of art, film, comedy, theatre, music and dance in Sechelt, BC.

Bristol Water donated holiday gift baskets to eight families in need, and participated on a board to help improve five schools in low income areas.

Värmevärden sponsored local youth sports teams for activities such as soccer, hockey and cross country skiing.

 

Training and Development

Invested in the Continual Growth of Our Employees
Capstone is committed to career development. We encourage our people to seek learning opportunities that provide personal and professional growth. Our tuition reimbursement program allows employees to receive financial assistance when taking courses related to their area of expertise.

In 2014, Capstone spent approximately $116,000 on training and development for employees at our power assets, and $28,000 at our corporate office.

 

Health and Safety

Achieved High Safety Performance
A key value of Capstone is to foster a safe work environment where our people have the tools and resources to succeed in their roles. The safety and well-being of our employees, contractors and partners is of utmost importance to our company. We have four health and safety goals that we strive to meet:

• Achieving zero accidents. Together, we build on our safety accomplishments to make zero accidents our goal.
• Preventing accidents and near misses from occurring. All safety incidents are preventable. By thoroughly assessing the risks of planned activities and tasks, we are building a foundation for safe work practices and procedures.
• Identifying the root causes of all incidents. If an incident occurs, we require everyone who works for us or with us to cooperate with and learn from our investigation.
• Assessing and improving our performance. We assess our health and safety performance quarterly and annually and are committed to continually improving our record.

 

Our businesses have extensive health and safety practices as well as training programs to protect employees and encourage ongoing professional development. At our corporate office, employees received standard first aid training, including CPR for adults and automated external defibrillation (AED). At our power businesses, employees received 168 hours of safety training on a range of topics including First Aid and CPR, WHMIS, AED and fall protection. In 2014, both Cardinal Power and Erie Shores Wind Farm maintained strong safety records and celebrated their 18th and 9th consecutive years, respectively, without any lost-time injuries. Whitecourt Power had one lost-time injury related to an onsite collision, where an employee sustained minor injuries. Lost-time injuries at Whitecourt are infrequent. In the last ten years, the plant has recorded just four incidents of employee lost-time and one contractor injury. In the future, Whitecourt will provide modified work duties for individuals involved in minor accidents to avoid lost time.

At our utilities businesses, employees received approximately 4,700 hours of safety training on a range of subjects, including asbestos awareness, electrical and fire safety, and working in confined spaces. Värmevärden did not record any lost-time injuries in 2014. Bristol Water recorded six safety incidents of lost time. The facility took the following preventative measures to avoid the recurrence of these issues:

• Performed relevant risk assessments
• Conducted trials of new safety equipment on the market and replaced old equipment with new ones, where required
• Issued safety alerts and usage instructions
• Implemented changes to the maintenance program to minimize safety hazards

 

Employee and Family Assistance

Capstone’s employee benefit program includes access to an Employee Family and Assistance Program (EFAP), which offers confidential counselling to employees and their dependents for personal, family and work-related issues.
Employees and their families can receive support with life challenges, including:

• Mental health issues, including anxiety, depression and substance abuse
• Work stress and crises such as conflict, diversity issues and the illness or death of a family member, friend or co-worker
• Legal and financial advice including questions related to wills, separation, divorce and personal debt
• Family issues involving relationships, parenting, alternative families and bereavement
• Anger management assistance for employees, colleagues and managers

 

Emergency Preparedness

Capstone has put corporate and site-specific contingency plans in place to prepare our employees for emergency situations. Our contingency planning includes:

Crisis Simulation Exercises: At our corporate office the senior team participates in regular crisis simulation exercises with a reputable communications consulting firm.

Crisis Communications Plans: We have a crisis communications plan that defines our framework for effectively managing corporate communications, to internal and external audiences, during a crisis.

Business Continuity and Emergency Procedures Plan: Our Business Continuity Plans contain emergency action plans, including evacuation procedures, protocols for maintaining access to electronic data and emails, and local responder contact details.

External Communications Policy: Employees are required to follow the guidelines of Capstone’s External Communications and Disclosure Policy, when communicating to the public during a crisis.

 

Labour Practices

Share Ownership Guidelines
Executive Share Ownership
In order to further align the interests of the company’s senior executives and the company’s shareholders, our senior executives are required to hold Common Shares or RSUs with a value equal to a percentage of their salaries within five years of the date they commenced their employment with Capstone.

Remuneration
Our employees are compensated at an amount that is comparable to other organizations in the same industry. Capstone works to ensure that all employees are paid at market value by regularly conducting industry research.

Short-Term Incentive Plan (STIP)
Capstone has a short-term incentive plan in place to encourage and reward the achievement of (a) annual business objectives of the company and (b) personal objectives for eligible employees, by clearly articulating the specific measures required to achieve such objectives. In addition to personal and career objectives, there are three primary categories that are assessed as a part of each employee’s annual and individual performance objectives: financial, strategy, and operations. The CEO’s annual individual performance objectives also include: leadership, reputation, and community and industry involvement. Each employee’s objectives are reviewed at year-end to determine whether they have been successfully completed. The STIP is paid in cash or in the form of deferred share units (DSUs).

Long-Term Incentive Plan (LTIP)
The purpose of the LTIP is to promote the long-term success of the company by providing equity-based incentive awards to employees. The plan is designed to provide participants with financial instruments related to common shares of the company and thereby encourage such participants to perform the duties of their employment to the best of their abilities and to devote their business time and efforts to further the growth and development of the company. The plan is also intended to assist the company in attracting and retaining individuals with superior experience and ability. Each LTIP award consists of 50% restricted stock units (RSUs) and 50% performance stock units (PSUs). RSUs are subject to a three-year vesting period, and PSUs are subject to both a three-year vesting period and performance-related vesting.

Employee Share Purchase Plan (ESPP)
Capstone has an Employee Share Purchase Plan (ESPP), which is aimed at enabling employees to fully benefit from our company’s growth and success by becoming shareholders. In most instances, a participating employee can choose to have up to 15% of his or her annual base salary withheld, through regular pay deductions to buy common shares. Capstone matches 50% of the employees contribution, up to a maximum of $3,000 per year. Capstone’s ESPP features the following:

• A convenient, systematic and cost-effective way — through automatic payroll deductions — to purchase common shares of Capstone without incurring brokerage fees
• The flexibility for employees to select the level of contribution that is right for them; and
• A contribution from Capstone to match a portion of each employee's own ESPP contribution, thereby increasing their total investment.

Our goal with the ESPP program is to encourage, strengthen and reward the interest of our employees in Capstone’s operations, growth opportunities and continuing development.

 

Economic Impact

Provided Essential Services that People Rely On — Clean Safe Drinking Water, Dependable Heating, and Reliable Electricity to Illuminate Homes and Businesses and Power the Economy.
The services we deliver translate into steady long-term cash flow for our investors, and provide employment for locals and opportunities for contractors, businesses and other vendors in the community.

In Canada, Capstone supports the growing clean energy sector in five provinces by having ownership interest in:

• 13 wind power facilities
• One gas co-generation plant
• Four hydro power facilities
• Two biomass facilities
• One solar facility

 

Internationally:

• Capstone holds a 33% interest in Swedish district heating business Värmevärden; and
• A 50% interest in UK water utility Bristol Water, which serves a population of 1.2 million and delivers 282 million litres of water per day.

 

EMPLoYEE STATISTICS

*These percentages are based on our corporate office and power businesses.