Capstone Turbine CFO Announces Decision to Resign.

Business Editors

CHATSWORTH, Calif.--(BUSINESS WIRE)--Dec. 20, 2001

Jeffrey Watts, Chief Financial Officer, announced today his plans to retire from Capstone Turbine Corporation (Nasdaq:CPST).

Watts joined Capstone in 1995, becoming the company's first CFO. He helped to steer the company from an early venture stage through its initial public offering, and initial commercial operations. During his tenure, Capstone has seen the microturbine develop from the prototype stage to become a commercial product and has also seen the build up of a strong portfolio of distribution partners.

Watts has agreed to remain with Capstone until the beginning of 2002 and will be available to assist in the transition to his successor. The company has retained an executive search firm and is well under way in the process of identifying candidates.

Of his decision to leave Capstone, Watts said, "I am more firmly a believer in Capstone and opportunities in distributed generation than ever before. The organization is changing and gaining new momentum and that is exciting. Additionally, our product is passing key endurance and application milestones. This provides me with an opportune time to seamlessly transition to pursue other interests, including focusing on other start-up companies. I am very proud of the work we have done at Capstone and look forward to staying in touch as our team continues to develop and expand the market for distributed resources."

On Watts' plans to retire, Dr. Ake Almgren, Capstone President and CEO, said, "Jeff has been an exceptional asset to Capstone over the long haul. His expertise was instrumental in guiding us through some very challenging times in our pre-commercial phases including multiple private placements, our successful Initial Public Offering and first Secondary Offering last year. We could not have gotten to where we are without him. Jeff has exciting interests on the horizon and, while he will certainly be missed, we respect his decision and wish him all the best in his new endeavors."

About Capstone Turbine

Capstone Turbine Corporation (www.microturbine.com; Nasdaq: CPST) is the world's leading producer of low-emission microturbine systems. In 1998, Capstone was the first to offer commercial power products utilizing microturbine technology, the result of more than ten years of focused research. Capstone Turbine has shipped more than 1,800 commercial production Capstone MicroTurbine systems to customers worldwide. These award-winning systems have logged more than one million hours of operation serving, among others, the following applications:

-- Hybrid electric vehicles (HEVs): onboard generation

-- Resource recovery: converting oilfield, landfill and sewage waste gases into
electricity

-- Micro-cogeneration: combined heat/power/chilling/drying solutions

-- The 9s market: power security, quality and reliability

This press release contains "forward-looking statements," as that term is used in the federal securities laws, about Capstone's business, with regard to expanding the market for distributed resources. These forward-looking statements are subject to numerous assumptions, risks and uncertainties that may cause Capstone's actual results to be materially different from any future results expressed or implied in such statements. Such factors include, but are not limited to: 1) market acceptance of Capstone's technology and products; 2) the size, timing and shipment of individual orders; 3) the ability of Capstone to successfully execute its production and marketing plans; 4) the Company's ability to develop additional microturbine product releases; and other factors detailed in the Company's filings with the Securities and Exchange Commission. Capstone cautions readers not to place undue reliance on these statements, which speak only as of the date of this release. Capstone undertakes no obligation, and specifically disclaims any obligation, to release any revisions to any forward-looking statements to reflect events or circumstances after the date of this release or to reflect the occurrence of unanticipated events.