EXHIBIT (a)(1)(x) [CAPSTONE LOGO] ________________________________________________________________________________ The Voluntary Employee Stock Option Exchange Offer June 25, 2003 (c) 2003 Capstone Turbine Corporation - www.microturbine.com [CAPSTONE LOGO] Overview & Purpose ________________________________________________________________________________ What is the Voluntary Stock Option Exchange Program? ____________________________________________________ All non-executive U.S. employees can exchange option grants with exercise prices of $2.00 per share or more, for new options to be granted no earlier than 6 months and 1 day from cancellation. We currently expect to cancel the options on July 25th and grant the new options on January 26, 2004 unless the offer is extended by us. (c) Capstone Turbine Corporation - www.microturbine.com [CAPSTONE LOGO] OVERVIEW & PURPOSE ________________________________________________________________________________ WHY IS CAPSTONE MAKING THE OFFER? _________________________________ - - WE BELIEVE THIS WILL CREATE BETTER PERFORMANCE INCENTIVES FOR EMPLOYEES AND ENHANCE STOCKHOLDER VALUE. - - ADDRESS THE FACT THAT MOST OF OUR OUTSTANDING OPTIONS ARE UNDERWATER. - - POTENTIALLY BRING MORE VALUE TO EMPLOYEES WITH STOCK OPTION GRANTS. (C) 2003 CAPSTONE TURBINE CORPORATION - WWW.MICROTURBINE.COM [CAPSTONE LOGO] OVERVIEW OF THE EXCHANGE ________________________________________________________________________________ MAIN FEATURES _______________________ - - YOU CAN ELECT TO TENDER ANY OPTION GRANT WITH AN EXERCISE PRICE EQUAL OR GREATER THAN $2.00 FOR EXCHANGE BETWEEN JUNE 25, 2003 AND JULY 24, 2003 (OR LONGER IF WE EXTEND THE OFFERING PERIOD). - - THE SAME NUMBER OF NEW OPTIONS WILL BE GRANTED TO YOU NO EARLIER THAN 6 MONTHS AND 1 DAY AFTER THE CANCELLATION DATE. AGAIN, CURRENTLY WE ANTICIPATE THE NEW GRANTS TO BE ON JANUARY 26, 2004. - - THE EXERCISE PRICE PER SHARE OF THE NEW OPTIONS WILL BE THE CLOSING PRICE OF OUR COMMON STOCK REPORTED BY NASDAQ ON THE DATE OF GRANT OF THE NEW OPTIONS. (C) 2003 CAPSTONE TURBINE CORPORATION - WWW.MICROTURBINE.COM [CAPSTONE LOGO] OVERVIEW OF THE EXCHANGE ________________________________________________________________________________ Main Features -- Continued __________________________ - - As for vesting, 12.5% of the new option grants will be vested on the date you are granted the New Option and 1/48 of the new options will vest monthly over the next 42 months, subject to your continued employment. (c) 2003 Capstone Turbine Corporation - www.microturbine.com [CAPSTONE LOGO] Procedure to Participate ________________________________________________________________________________ How do I participate? _____________________ 1. If you choose to participate in the Exchange Offer, complete the Election Form and return it to Debbie Bernard by 5:00 p.m., Pacific Time, on July 24, 2003 (or any extended period we communicate) by fax or hand delivery. Note: email is not sufficient. 2. Robin Deyo has provided a Personnel Option Status for each of you. You can find the information required for the Election Form in Robin's summary. 3. HR will email you a confirmation of receipt of your Election Form within two business days of receipt. If you have not received a confirmation of receipt, contact HR. It is your responsibility to ensure that your Election Form has been received by us. (c) 2003 Capstone Turbine Corporation - www.microturbine.com [CAPSTONE LOGO] Procedure to Withdraw ______________________________________________________________________________ How do I withdraw if I change my mind? ______________________________________ - - If you choose to participate in the Exchange Offer and then decide not to participate at all, you must complete the "Notice to Withdraw from the Offer Form." If you don't withdraw by July 24, 2003 (or any extension period we later communicate) your election to participate will remain effective. - - The Notice to Withdraw must be completed and returned to Debbie Bernard by 5:00 p.m., Pacific Time, on July 24, 2003 via fax or hand delivery. Note: email is not sufficient. - - HR will email you a confirmation of receipt of your Notice within two business days of receipt. If you have not received a confirmation of receipt, contact HR. It is your responsibility to ensure that your Notice has been received by us. (c) 2003 Capstone Turbine Corporation -- www.microturbine.com [CAPSTONE LOGO] Procedure to Amend ___________________________________________________________________________ How do I change my election? ____________________________ 1. If you choose to participate in the Exchange Offer and then change your mind regarding the grants you want to tender, you must complete a new "Election Form." 2. The completed Election Form must be returned to Debbie Bernard by 5:00 p.m., Pacific Time, on July 24, 2003 (or any extension period we communicate) via fax or hand delivery. Note: email is not sufficient. 3. HR will email you a confirmation of receipt of your Election Form within two business days of receipt. If you have not received a confirmation of receipt, contact HR. It is your responsibility to ensure that your Election Form has been received by us. (c) 2003 Capstone Turbine Corporation -- www.microturbine.com [CAPSTONE LOGO] Example ______________________________________________________________________________ Original Grant as of June 25, 2003