CORPORATE GOVERNANCE
The Board carries out its general oversight responsibility both by acting as a whole as well as through its committees. Among other things, the Board periodically reviews our processes for identifying, ranking, and assessing risks that affect our organization as well as the output of those processes. The Board also receives periodic reports from our management on various risks, including risks of the types mentioned facing our businesses, risks presented by transactions that are presented to the Board for approval, and risks arising out of our corporate strategy.
The Board also maintains several standing committees with risk oversight responsibility for various Board functions. Although the Board has ultimate responsibility for overseeing risk, its standing committees perform certain of its risk oversight responsibilities. For example, the Audit Committee engages in ongoing discussions regarding major financial and accounting risk exposures and the process and system employed to monitor and control such exposures. In addition, the Audit Committee engages in periodic discussions with management concerning the process by which risk assessment and management are undertaken, and it exercises oversight regarding the risk assessment and management processes related to, among other things, internal controls, credit, capital structure, liquidity, cybersecurity, and insurance programs. In carrying out these responsibilities, the Audit Committee, among other things, regularly reviews with the Internal Audit Director the audits or assessments of significant accounting and audit risks conducted by Internal Audit personnel based on their audit plan, and the Audit Committee regularly meets in executive sessions with the Internal Audit Director. The Audit Committee also regularly reviews with management our internal control over financial reporting, including any significant deficiencies or material weaknesses. As part of these reviews, the Audit Committee reviews steps taken by management to monitor, control, and mitigate risks. The Audit Committee also regularly reviews with the Chief Legal Officer (or other head legal officer) significant legal, regulatory, and compliance matters that could have a material impact on our financial statements or business. Finally, from time-to-time, executives who are responsible for managing particular risks, such as cybersecurity, report to the Audit Committee on how those risks are being controlled and mitigated.
Other Board committees also exercise responsibility to oversee risk within their areas of responsibility and expertise. For example, as noted in the section entitled “Risk Assessment of Compensation Policies and Practices,” the Compensation Committee oversees risk assessment and management with respect to our compensation policies and practices, and it exercises oversight with respect to our 401(k) plan; the Corporate Governance and Sustainability Committee engages in periodic discussions with our Chief Compliance Officer regarding major environment, health, and safety risks; and the Compliance Committee engages in ongoing discussion with the Chief Compliance Officer and the Chief Legal Officer (or other head legal officer) regarding regulatory and compliance matters, including compliance with applicable export controls, government contracts, FDA compliance, and similar governmental regulatory regimes.
In those cases where committees have risk oversight responsibilities, the Chairs of the committees regularly report to the full Board the significant risks facing the Company, as identified by management, and the measures undertaken by management for controlling and mitigating those risks.
RISK ASSESSMENT OF COMPENSATION POLICIES AND PRACTICES
Our Compensation Committee has reviewed our incentive compensation programs, discussed the concept of risk as it relates to our compensation program, considered various mitigating factors, and reviewed these items with its independent consultant, Meridian Compensation Partners, LLC (“Meridian”). In addition, our Compensation Committee asked Meridian to conduct an independent risk assessment of our executive compensation program. Based on these reviews and discussions, the Compensation Committee does not believe our compensation program creates risks that are reasonably likely to have a material adverse effect on our business.
For more information regarding our compensation program, see the section entitled “Compensation Discussion and Analysis” beginning on page 24.
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12 |
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2024 PROXY STATEMENT |
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CORPORATE GOVERNANCE
SUSTAINABILITY
We deliver leading additive manufacturing solutions for industrial and healthcare applications using innovative 3D printing technologies, powered by the expertise of our global team. Innovation is core to who we are and how we work. Our solutions enable our customers to meet key product needs and advance their business models. Looking to the future, sustainability will be an integral part of our innovation to address the evolving needs of our customers.
The effects of climate change and the heightened social, economic, and health challenges around the globe are transforming our business. We are considering these important topics as we design and execute our sustainability strategy. Our sustainability strategy is organized into four pillars: Empowering our Innovation, Evolving the Future of Manufacturing, Advancing Customer Solutions, and Upholding Responsible Business Practices.
Empowering Our Innovation
We are focused on empowering innovation through our people to drive industry-leading solutions to maintain a competitive edge in additive manufacturing. We have instituted core talent strategies to prioritize the development of people, the diversity of talent to expand technology innovation, and the engagement of our global workforce.
Talent Development: We invest in talent programs to support employees with opportunities to grow, contribute, develop, and thrive. In 2023, we launched more robust talent management guidance and tools to further enable leaders to consistently develop and provide employee feedback through performance reviews, goal setting, and career development planning. We also perform strategic workforce and succession planning, as well as ongoing reviews of our organizational design, culture, and values, to address the evolving needs of our business.
Connection and Engagement: We are committed to fostering an environment where inclusion and belonging are central to how we work across our global teams and create opportunities for our diverse global workforce to connect. In 2023, we regularly engaged with employees to provide updates on our strategic priorities and company progress, as well as solicit feedback through ongoing communications, global all-hands meetings, and business town hall updates. We promoted participation in our Employee Resource Groups across the globe, coordinated various women networking sessions, and launched educational resources and dedicated space on our Company intranet to celebrate the unique perspectives of colleagues around the world. We extended our focus of inclusion within our local communities and strive to make a positive impact by serving the underserved in our communities through our 3D Gives Back volunteer program.
Innovation Rewards: One of the core values of our Company is to ‘Innovate with Purpose’ to drive long-term value. As such, we are focused on encouraging and recognizing impactful innovation through several key initiatives. In 2023, we hosted a global Technology Summit which brought engineering and operations teams around the world together to further drive collaboration, refine strategic ideas, and explore future additive manufacturing solutions as a collective team, leveraging our diverse technical expertise. We also have a Technical Fellow Program, which recognizes and establishes a career path for highly skilled engineers, designed to foster technical excellence and innovative leadership in the field of additive manufacturing.
Cross-Functional Collaboration: We are enabling cross-functional collaboration to bring together diverse expertise across engineering, operations, and customer-facing teams to harness the collective problem solving of our teams. This allows us to accelerate the transition from engineering design to manufacturing, improve operational performance and efficiency, and timely deliver comprehensive solutions to address our customers’ needs.
Evolving the Future of Manufacturing
We offer a broad portfolio of additive manufacturing products and services and are evolving the future of manufacturing for our customers. Innovation and speed to market are critical for our customers, and leveraging additive manufacturing capabilities enables our customers to shorten their innovation cycle while reducing their environmental impact.
Optimize Supply Chains and Reduce Lead Times: Our products and solutions enable on-demand production, which can help our customers to reduce on-hand inventory levels and minimize product lead times. By reducing the constraints of traditional manufacturing, our solutions empower customers to respond more quickly to business needs.
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2024 PROXY STATEMENT |
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13 |
CORPORATE GOVERNANCE
Enable Localized Production: We enable customers to manufacture products closer to their end markets, which can support our customers in reducing transportation emissions, lowering logistics costs, enhancing supply chain resilience, and taking advantage of incentives for domestic manufacturing, where applicable.
Advancing Material Design: Our additive manufacturing solutions focus on advancing material design and engineering capabilities to meet customers’ unique needs and requirements, with the ability to select the most suitable materials for their specific applications.
Utilizing Digitization for Prototyping: Our digitized prototyping processes enable rapid iteration and customization of product designs, which can minimize waste and optimize material usage. This empowers our customers to iterate quickly, test concepts efficiently, and refine designs, thereby reducing the generation of physical prototypes and associated waste.
We are a member of the Additive Manufacturing Green Trade Association (AMGTA), which has a mission to educate and share knowledge amongst members about the positive environmental benefits of additive manufacturing, develop best practices, and promote the adoption of additive manufacturing as an alternative to traditional manufacturing.
Advancing Customer Solutions
We provide solutions to empower our customers to address their evolving sustainability priorities. Our unique offerings of hardware, software, materials, and services provide application-specific solutions powered by the expertise of our global team of application engineers. We are maturing our product development activities to address our customers’ key environmental and social priorities.
Circular Economy Solutions: We are contributing to a circular economy by evaluating the recyclability of materials, reducing parts and components in our products, and working on opportunities to extend product lifespans. By evolving our product design, we are adopting modular technology and interchangeable components, supporting longevity and ease of repair.
Decarbonization Solutions: We are focusing on decarbonization solutions for our products by reducing material use and weight, improving energy and resource efficiency, and driving carbon capture and storage technologies. 3D Systems is working with leading innovators in the direct air capture space to create components that remove carbon from the atmosphere through a system of filters, heat exchangers, condensers, gas separators, and compressors using our additive manufacturing solutions. The benefits of 3D printing solutions can accelerate the effectiveness of carbon capture, through attributes such as design optimization, long service life, speed of iteration, scalability, and supply chain efficiencies.
Patient-Centered Healthcare Solutions: Customers leverage our additive manufacturing solutions to deliver high-quality, patient-centered healthcare solutions. Our personalized solutions can optimize patient care by enhancing patient comfort, functionality, and accuracy, which may result in increased patient satisfaction, well-being, and quality of life. Personalization can promote healthcare accessibility with the capability of addressing unique individual needs.
Upholding Responsible Business Practices
We operate in a responsible and ethical manner and leverage corporate governance standards to operate with resiliency and to sustain the long-term value of our Company. We leverage this foundation to influence our sustainability strategy, including utilizing our governance structure for oversight of our sustainability program.
Program Governance: Our sustainability program is led by our Chief People Officer and Chief Administrative Officer, and the Board of Directors has delegated oversight of the Company’s sustainability program to its Corporate Governance and Sustainability Committee. In 2023, we provided periodic updates on our sustainability program strategy, annual priorities, and progress to the Committee, with materials available to the full Board.
Workplace Safety: We operate responsibly across our sites through practices to promote a safe, secure, healthy, and injury-free workplace. To fulfill this commitment, we provide annual global and site-specific safety communications and company-wide safety trainings. We also have robust, site-specific safety programs in place, which includes
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14 |
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2024 PROXY STATEMENT |
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EXECUTIVE COMPENSATION MATTERS
Michael Turner
Mr. Turner’s employment agreement provided for a minimum base annual salary of $450,000 and a target bonus opportunity of not less than 60% of his base salary, with the exact amount of any such bonus to be based upon the achievement of performance goals to be determined by the Compensation Committee. The employment agreement entitled Mr. Turner to participate in all other benefits generally available to our other executive employees, including participation in the Company’s health benefit plans and equity award programs. Pursuant to Mr. Turner’s employment agreement he was granted the following equity awards:
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a signing bonus of $225,000, provided that he was not terminated for cause within the first 24 months of his employment with the Company, and |
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a time-based restricted stock award for shares of Common Stock with a value of $1,500,000 that scheduled to vest in three equal annual installments on each of the first, second and third anniversaries of August 29, 2023, the date of grant, subject to his continued employment. |
On September 18, 2023, Mr. Turner notified the Company of his resignation as Executive Vice President and Chief Financial Officer of the Company, effective October 15, 2023. In connection with his departure, Mr. Turner forfeited his participation in the fiscal 2023 Annual Bonus Program and all outstanding unvested equity awards, including restricted stock and PSU. Mr. Turner retained his signing bonus on his departure as consideration for ongoing consulting services to the Company.
Change of Control Severance Policy
On February 22, 2018, the Compensation Committee adopted the Company’s Change of Control Severance Policy (the “COC Severance Policy”). The COC Severance Policy is intended to provide eligible officers with reasonable financial security in their employment and position with the Company without distraction from uncertainties regarding their employment created by the possibility of a potential or actual change of control. The COC Severance Policy applies to our CEO and all Executive Vice Presidents and Senior Vice Presidents, which includes all our NEOs. For a more detailed discussion of the benefits payable to our NEOs under the COC Severance Policy, see “Potential Benefits upon Termination or Change of Control” beginning on page 48.
OTHER COMPENSATION MATTERS
Benefits and Perquisites
We provide our employees, including the NEOs, with a benefit program that we believe is reasonable, competitive, and consistent with the objectives of our compensation program. As a matter of policy, the Compensation Committee does not award personal benefits or perquisites to our NEOs that are unrelated to our business and strives to mitigate the use of non-performance-based forms of compensation. However, under certain circumstances, the Compensation Committee has approved certain personal benefits or perquisites that are either provided to a NEO by contract or that it deemed to be in our interests to induce executives to commence or maintain employment with us. Those amounts are reported in the “Summary Compensation Table” on page 44.
Our executives, including the NEOs, are eligible to participate in employee benefit programs that we provide to our employees generally, which include a group insurance program providing group health, dental, vision, life and long-term disability insurance. Other benefits include a Section 401(k) plan, health savings accounts, flexible spending accounts for health and dependent care expenses, sick leave, holiday time, and vacation time. Our NEOs are eligible for a comprehensive annual executive physical, a benefit that is capped at $5,000 annually.
We also reimburse certain commuting expenses for executives. For Mr. Puthenveetil, these commuting expenses included rent reimbursement for temporary housing in Rock Hill, South Carolina, certain past mileage expenses and a tax gross-up for federal, state and other income taxes resulting from imputed income relating to these commuting expenses.
For Ms. Nordstrom, these commuting expenses included airfare between Minneapolis, Minnesota and Charlotte, North Carolina, lodging, and car rental charges and a tax-gross up for federal, state and other income taxes resulting from imputed income related to these commuting expenses.
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2024 PROXY STATEMENT |
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41 |
EXECUTIVE COMPENSATION MATTERS
We also maintain an employee relocation policy, offering different tiers of benefits based on job level, for employees who are requested to relocate their primary residence in connection with their employment. For a further discussion, see Note 5 to the “Summary Compensation Table.” Relocation assistance is necessary to induce executives to join the Company.
We believe the cost of providing perquisites in 2023 was reasonable and represents a relatively small percentage of each NEO’s overall compensation package.
EXECUTIVE STOCK OWNERSHIP GUIDELINES
Our executive officers and certain other senior members of management are required to maintain a minimum equity stake in the Company. This policy reflects the Board’s belief that our most senior executives should maintain a significant personal financial stake in the Company to promote long-term stockholder value. In addition, the policy helps align executive and stockholder interests, which reduces the incentive for excessive short-term risk taking. Each of our NEOs and certain other senior officers are required to acquire and maintain ownership of shares of our Common Stock equal to a specified multiple of his or her base salary, as shown in the table below. Each officer subject to a share ownership requirement must retain 50% of all net shares (post-tax) that vest until achieving his or her minimum share ownership requirement.
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Title |
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Minimum Stock Ownership Requirement |
Chief Executive Officer |
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6x annual base salary |
Chief Financial Officer |
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3x annual base salary |
Other Executive Officers (EVPs) |
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2x annual base salary |
Other Senior Officers (SVPs) |
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1x annual base salary |
Shares owned for the purposes of determining compliance with our stock ownership policy are defined as shares of Common Stock held outright (by the executive or his/her spouse), restricted stock units, restricted stock awards, and shares or share equivalents held in a Company savings plan or deferred compensation plan. Stock options, stock appreciation rights, and PSUs are excluded from the definition of shares owned.
All NEOs currently comply with their respective ownership requirements or are retaining 50% of all net shares (post-tax) that vest until achieving their minimum share ownership requirement. Our NEOs are expected to achieve the required stock-ownership levels within five years from the time they are appointed to or promoted to an executive position of Senior Vice President or higher.
POLICY ON HEDGING AND PLEDGING TRANSACTIONS
Our Policy Statement Governing Insider Trading (the “Insider Trading Policy”) prohibits any director, officer, employee, or consultant of the Company or any of its subsidiaries or affiliates from engaging in short-term or speculative transactions in our securities. This policy includes within its coverage short sales, which for directors and executive officers of the Company are prohibited by Section 16 of the Exchange Act. It also prohibits transactions in publicly traded options, such as puts, calls, and other derivative securities, or purchase financial investments (including prepaid variable forward contracts, equity sweeps, collars, and exchange funds), or the engagement in transactions that hedge or offset, or are designed to hedge or offset, any decrease in the market value of our Common Stock.
The Insider Trading Policy also prohibits any director or executive officer from holding Company securities in a margin account or pledging (or hypothecating) Company securities as collateral for a loan.
The Insider Trading Policy requires that our directors and executive officers pre-clear any transactions in our securities with our Chief Legal Officer (or other head legal officer) or Assistant General Counsel.
CLAWBACKS OF INCENTIVE COMPENSATION
Each of our NEOs is subject to our clawback policy. In response to the SEC’s adoption of final clawback rules and the NYSE’s publication of corresponding listing standards, the Board recently amended and restated our clawback policy to comply with final stock exchange listing standards, effective October 2, 2023.
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42 |
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2024 PROXY STATEMENT |
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EXECUTIVE COMPENSATION MATTERS
bonus, (ii) a pro rata portion of his target annual bonus for the fiscal year in which the termination occurs, (iii) accelerated vesting of the unvested shares under all outstanding time-based equity award and conversion of outstanding PSUs into immediately accelerated restricted stock awards (“RSAs”), and (vi) the difference between the monthly COBRA rate and the active employee premium rate for the applicable group health coverage (i.e., medical, dental and vision) for 24 months.
Creech, Puthenveetil, Ellis, Nordstrom, Johnson and Turner Employment Agreements
Under their employment agreements, Messrs. Creech, Puthenveetil, Ellis, Johnson and Turner and Ms. Nordstrom would, upon termination by the Company without “cause” or resignation for “constructive discharge” (in each case as defined in their respective agreements), become entitled to receive the following:
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An amount equal to the NEO’s base salary, payable in 12 equal monthly installments; |
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Any accrued but unpaid base salary as of the termination date; |
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Any accrued but unpaid performance bonus as of the termination date, on the same terms and at the same times as would have applied had the NEO’s employment not terminated; and |
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If the NEO elects COBRA coverage for health and/or dental insurance, Company-paid monthly premium payments for such coverage such that the NEO’s contributions to such plans will remain the same as if the NEO were employed by the Company until the earliest of: (1) 12 months from the termination date; or (2) the date the NEO is no longer eligible for COBRA coverage. |
On September 18, 2023, Mr. Turner notified the Company of his voluntary resignation effective October 15, 2023. In connection with his resignation, Mr. Turner received no special benefits.
Mr. Johnson resigned from his role and position within the Company, effective April 30, 2024. In connection with his resignation, Mr. Johnson received (i) a severance amount equal to $400,000, paid in 12 monthly installments following his separation date, (ii) Company-paid monthly premium payments for COBRA health and dental insurance coverage such that Mr. Johnson’s contributions to such plans remain the same as if he were employed by the Company until the earlier of (1) 12 months following the Separation Date and (2) the date Mr. Johnson is no longer eligible for COBRA coverage, and (iii) a one-time $300,000 cash retention bonus. Mr. Johnson forfeited all outstanding unvested equity awards, including restricted stock and PSUs, upon his resignation on April 30, 2024. Mr. Johnson continues to provide executive transition consulting services to the Company at the rate of $250 per hour (plus expenses) under a Consulting Agreement dated May 1, 2024.
Mr. Ellis’s role and position within the Company were eliminated, effective April 30, 2024. In connection with his departure from the Company, Mr. Ellis received (i) a severance payment in the amount of $412,000, and (ii) Company-paid monthly premium payments for COBRA health and dental insurance coverage such that Mr. Ellis’ contributions to such plans remain the same as if he were employed by the Company until the earlier of (1) 12 months following his separation date and (2) the date Mr. Ellis is no longer eligible for COBRA coverage. Mr. Ellis forfeited all outstanding unvested equity awards, including restricted stock and PSUs, upon his separation. Mr. Ellis continues to provide executive transition consulting services to the Company at the rate of $375 per hour (plus expenses) under a Consulting Agreement dated May 1, 2024 with The Kaminda Group, an entity controlled by Mr. Ellis.
See “Change of Control Severance Policy” for a description of payments to be received by these NEOs upon a termination in connection with a change of control.
Change of Control Severance Policy
On February 22, 2018, the Compensation Committee adopted the Company’s the COC Severance Policy. The COC Severance Policy is intended to provide eligible officers with reasonable financial security in their employment and position with the Company, without distraction from uncertainties regarding their employment created by the possibility of a potential or actual change of control. The COC Severance Policy applies to our CEO and all Executive Vice Presidents and Senior Vice Presidents (each, a “Participant”), which includes all of our NEOs.
A Participant is entitled to benefits under the COC Severance Policy in the event of a termination of the Participant’s employment by the Company without “Cause” or by the Participant for “Constructive Discharge” either (a) on or
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2024 PROXY STATEMENT |
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49 |
AMEND AND RESTATE STOCK INCENTIVE PLAN
PROPOSAL 3: Approval of the Amendment and Restatement of the 2015 Incentive Plan
OVERVIEW
We currently maintain the 2015 Incentive Plan, which was originally adopted by the Board of Directors on March 11, 2015, and approved by stockholders at our 2015 Annual Meeting on May 19, 2015. On March 26, 2020, the Board of Directors amended and restated the 2015 Incentive Plan to, among other items, add new shares of our Common Stock to the pool of shares available to award, and stockholders approved such amendment and restatement at our 2020 Annual Meeting on May 19, 2020.
On February 15, 2022, the Board further amended and restated the 2015 Incentive Plan again to, among other items, add new shares of our Common Stock to the pool of shares available to award, and stockholders approved such amendment and restatement at our 2022 Annual Meeting on May 24, 2022 (as amended and restated through the date hereof, the “2015 Incentive Plan”).
At this Annual Meeting, we are asking stockholders to approve an amendment and restatement of the 2015 Incentive Plan (the “Amendment and Restatement”) that would (i) add 4,000,000 new shares of our Common Stock to the pool of shares available for awards; (ii) make available under the 2015 Incentive Plan any shares of Common Stock withheld or remitted to satisfy tax withholding liabilities; and (iii) extend the term of the 2015 Incentive Plan until July 29, 2034. The Amendment and Restatement was adopted by the Board of Directors on July 30, 2024, subject to stockholder approval.
Under the 2015 Incentive Plan, the Company may issue shares of Common Stock to employees, officers, non-employee directors, consultants and advisors of the Company, or of any affiliate, as the Compensation Committee may determine and designate from time to time, in the form of restricted stock, restricted stock units, stock options, stock appreciation rights (“SARs”), performance awards and incentive awards.
The Board and the Compensation Committee believe that the 2015 Incentive Plan is a key part of the Company’s compensation philosophy and programs. Our ability to attract, retain and motivate highly qualified officers, non-employee directors, key employees, consultants and advisors is critical to our success. The Board and the Compensation Committee believe that the interests of the Company and its stockholders will be advanced if we can continue to offer our officers, non-employee directors, key employees, consultants and advisors the opportunity to acquire or increase a direct proprietary interest in the operations and future success of the Company.
The Company reserved 25,235,011 shares of Common Stock for issuance pursuant to awards under the 2015 Incentive Plan. As of the date of this Proxy Statement, 2,062,130 shares of Common Stock remained reserved for issuance. Additionally, as of July 30, 2024, there were 3,365,414 outstanding full value awards and 160,000 outstanding options with a weighted average exercise price of $13.26 and a weighted average remaining contractual life of 2.1 years under the 2015 Incentive Plan.
In order to increase the pool of shares available for future equity award grants to continue to operate our compensation program in a manner consistent with past practices and to accommodate anticipated growth, on July 30, 2024, the Board adopted, subject to stockholder approval, the Amendment and Restatement, to (i) add 4,000,000 shares of Common Stock to the pool of shares available for equity awards; (ii) make available under the 2015 Incentive Plan any shares of Common Stock withheld or remitted to satisfy tax withholding liabilities; and (iii) extend the term of the 2015 Incentive Plan until July 29, 2034. The proposed increase to the share pool and the extension of the term of the 2015 Incentive Plan are the only substantive changes to the 2015 Incentive Plan included in the Amendment and Restatement.
The Amendment and Restatement will become effective on August 30, 2024, the date of the Annual Meeting, if approved by our stockholders, and will remain in effect until July 29, 2034, unless terminated earlier by the Board of Directors. If the Amendment and Restatement is not approved by our stockholders, the Company’s existing equity plans, including the 2015 Incentive Plan, will remain in effect in accordance with their terms and the Company may continue to make awards under such plan.
The affirmative vote of a majority of the shares of Common Stock present or represented by proxy at the Annual Meeting and entitled to vote is required to approve this proposal. Abstentions from voting on this proposal will have the same effect as a vote against this proposal. Broker non-votes will not be treated as votes cast on this matter, and therefore will not have any effect on determining the outcome.
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2024 PROXY STATEMENT |
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57 |
EQUITY COMPENSATION PLAN INFORMATION
Clawback Policy. All awards made under the 2015 Incentive Plan are subject to the Company’s clawback policy described in the “Clawbacks of Incentive Compensation” section on page 42.
Independent Oversight. The 2015 Incentive Plan is administered by a committee of independent Board members.
Summary of 2015 Incentive Plan, as Amended by the Amendment and Restatement
The summary of the 2015 Incentive Plan, as amended by the Amendment and Restatement, is not intended to be a complete description of the Amendment and Restatement and is qualified in its entirety by the actual text of the 2015 Incentive Plan, as amended by the Amendment and Restatement, which is attached as Appendix A to this proxy statement.
ADMINISTRATION
The 2015 Incentive Plan is administered by the Compensation Committee of our Board of Directors or a subcommittee thereof, which consists of at least two directors who are both “Non-Employee Directors” within the meaning of Rule 16b-3 of the Exchange Act. The Compensation Committee has the authority to grant awards under the 2015 Incentive Plan and has broad discretion to determine the terms and conditions of such awards, subject to the provisions of the 2015 Incentive Plan. Notwithstanding the foregoing, only the full Board of Directors may grant and administer awards under the 2015 Incentive Plan to non-employee directors. The “plan year” is the calendar year. See “Meetings and Committees of the Board of Directors—Compensation Committee.”
ELIGIBILITY AND TYPES OF AWARDS UNDER THE 2015 INCENTIVE PLAN
The 2015 Incentive Plan permits the granting of restricted stock, restricted stock units, stock options, SARs, performance awards and incentive awards. Employees (including employee directors and executive officers) and consultants of the Company and its subsidiaries and affiliates and our non-employee directors are eligible to participate in the 2015 Incentive Plan.
Accordingly, each non-employee member of the Board of Directors, each executive officer, and each person who previously served as an executive officer during fiscal year 2023 and remains employed by us has an interest in Proposal 3. As of the record date, 1,110 employees (including executive officers) would be eligible to participate in the 2015 Incentive Plan. In addition, eight non-employee director nominees will be eligible to participate in the 2015 Incentive Plan.
As of July 30, 2024, the per share closing price of our Common Stock as reported on the NYSE was $3.63 and there were 133,585,613 shares of our Common Stock issued and outstanding.
SHARES AVAILABLE FOR ISSUANCE
Subject to adjustment (in connection with certain changes in capitalization), the total number of shares of our Common Stock reserved and available for issuance under the 2015 Incentive Plan is 29,235,011, which reflects a 4,000,000 share increase in the total number of shares of Common Stock available prior to the original effective date of the 2015 Incentive Plan (subject to stockholder approval).
If any award is cancelled, forfeited, expires or otherwise terminates without the issuance or delivery of nonforfeitable shares of Common Stock, or is withheld by, or otherwise remitted to, the Company to satisfy a participant’s tax withholding liabilities, or if any award is settled for cash or otherwise does not result in the issuance of all or a portion of the shares of Common Stock subject to such award, then the shares of Common Stock subject to the award shall, to the extent of such cancellation, forfeiture, expiration, termination, withholding, remittance, cash settlement or non-issuance, again be available for issuance under the 2015 Incentive Plan.
In the event of any change in the outstanding shares of Common Stock or other securities then subject to the 2015 Incentive Plan by reason of any stock split, reverse stock split, stock dividend, recapitalization, merger, consolidation, combination or exchange of shares or other similar corporate change, or if the outstanding securities of the class then subject to the 2015 Incentive Plan are exchanged for or converted into cash, property or a different kind of security, or if cash, property or securities are distributed in respect of such outstanding securities (other than a regular cash dividend), then, unless the terms of such transaction shall provide otherwise, such
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2024 PROXY STATEMENT |
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59 |
EQUITY COMPENSATION PLAN INFORMATION
equitable adjustments shall be made in the 2015 Incentive Plan and the awards thereunder (including appropriate and proportionate adjustments in (i) the number and type of shares or other securities that may be acquired pursuant to awards theretofore granted under the 2015 Incentive Plan; (ii) the maximum number and type of shares or other securities that may be issued pursuant to awards thereafter granted under the 2015 Incentive Plan; (iii) the number of shares of restricted stock and shares of Common Stock under restricted stock units that are outstanding and the terms thereof; and (iv) individual grant limits as the Compensation Committee determines are necessary or appropriate, including, if necessary, any adjustment in the maximum number of shares of Common Stock available for distribution under the 2015 Incentive Plan.
In the event that (i) any stock option granted under the 2015 Incentive Plan is exercised through the tendering of shares of Common Stock or by the withholding of shares of Common Stock by the Company or (ii) withholding tax liabilities resulting from an award are satisfied by the withholding of shares of Common Stock, then the number of shares tendered or withheld shall be available for future grants of awards. If Common Stock is issued in settlement of a SAR, the number of shares of Common Stock available under the 2015 Incentive Plan shall be reduced by the number of shares of Common Stock issued in settlement of the SAR rather than the number of shares of Common Stock for which the SAR is exercised.
INDIVIDUAL GRANT LIMITS
No participant in the 2015 Incentive Plan may be granted awards during any plan year in excess of any of the following limits: options covering in excess of 500,000 shares; SARs covering in excess of 500,000 shares; performance awards in excess of 500,000 shares; or incentive awards covering in excess of 500,000 shares or $3,500,000 if such incentive award is denominated in cash. In addition, non-employee directors may only be granted awards under the 2015 Incentive Plan equal to the number of shares of Common Stock that has a fair market value on the date of grant equal to $250,000 per year.
AWARDS
Restricted Stock. Restricted stock, i.e., shares of Common Stock that may be subject to vesting requirements, transfer restrictions or both, may be awarded under the 2015 Incentive Plan. Restricted stock may be granted subject to such restrictions and provisions as may be established by the Compensation Committee, consistent with the terms of the 2015 Incentive Plan. The restrictions may be based on performance standards, periods of service, retention by the participant of ownership of specified shares of Common Stock or other criteria.
The Compensation Committee may condition awards of restricted stock on the participant paying a price set by the Compensation Committee at the time and in the manner prescribed by the Compensation Committee.
A participant has all of the rights of a stockholder with respect to shares of Common Stock subject to a restricted stock award. Accordingly, the participant has the right to vote the shares. A participant has the right to receive dividends with respect to shares of Common Stock subject to a restricted stock award, except that dividends on the restricted shares will be accumulated and paid when, and to the extent that, the vesting requirements are satisfied.
Restricted stock will be forfeited and returned to the Company, and all rights of the participant with respect to such restricted stock will terminate unless the participant continues in the service of the Company, a subsidiary or an affiliate until the expiration of the restricted period for such restricted stock and satisfies any and all other conditions established by the Compensation Committee. The Compensation Committee will determine the restricted period (which may, but need not, lapse in installments) and any other terms and conditions applicable with respect to any restricted stock.
Restricted Stock Units. Restricted stock units, i.e., a notional bookkeeping entry that represents the equivalent of a share of Common Stock, may be granted under the 2015 Incentive Plan. Restricted stock units may be granted subject to such restrictions and provisions, whether based on performance standards, periods of service, retention by the participant of ownership of specified shares of Common Stock or other criteria, not inconsistent with the terms of the 2015 Incentive Plan, as may be established by the Compensation Committee.
Restricted stock units that are earned and vested may be settled in cash or Common Stock, as determined by the Compensation Committee.
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60 |
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2024 PROXY STATEMENT |
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EQUITY COMPENSATION PLAN INFORMATION
granted in tandem with the SAR. The Compensation Committee may specify that the exercise of a SAR will entitle the participant to receive a lesser amount than described.
If the SAR is granted independently of a stock option, the maximum term of the SAR will be 10 years. If the SAR is granted in tandem with a stock option, the maximum term of the SAR is the same as the term of the stock option. The Compensation Committee may specify that the term of a SAR will be less than the applicable maximum term.
The amount payable as a result of the exercise of a SAR may be settled in cash, Common Stock or a combination of cash and Common Stock.
Except as otherwise expressly approved by the Compensation Committee, if a participant terminates employment or service with the Company by reason of death or disability (as defined in the 2015 Incentive Plan), any SAR held by that participant may be exercised by the participant or the participant’s beneficiary in the case of death, for the number of shares that the participant was eligible to exercise, until the expiration of 12 months after the date of such death or disability, provided that such SAR was exercisable on such date, but no later than the expiration date of the SAR. Except as otherwise expressly approved by the Compensation Committee, if a participant is terminated without cause (as defined in the 2015 Incentive Plan), retires or resigns from employment or service, any SAR held by that participant will be exercisable, for the number of shares that the participant was eligible to exercise on the date of such termination, retirement or resignation, until the expiration of 90 days from the date of such participant’s termination, retirement or resignation, provided that such SAR was exercisable on such date, but no later than the expiration date of the SAR. Unless otherwise determined by the Compensation Committee, any unexercised SAR held by a participant who is terminated for cause will be cancelled on the date of such termination, whether or not exercisable on such date.
Performance Awards. Participants may be granted performance awards under the 2015 Incentive Plan. Performance awards will vest only upon the achievement of certain performance goals that are specified in advance by the Compensation Committee, and that relate to the following business criteria, either individually or in combination, applied to the participant or to the Company, a subsidiary or an affiliate of the Company as a whole or to individual units thereof, and measured either absolutely or relative to a designated group of comparable companies: (i) cash flow, (ii) earnings per share, (iii) earnings before interest, taxes, depreciation, and amortization (EBITDA), (iv) return on equity, (v) TSR, (vi) return on capital, (vii) return on assets or net assets, (viii) revenue, (ix) income or net income, (x) operating income or net operating income, (xi) operating profit or net operating profit, (xii) operating margin, (xiii) return on operating revenue, (xiv) customer satisfaction, (xv) market share, (xvi) expenses, (xvii) credit rating, (xviii) mergers and acquisitions or divestitures, (xix) product development, (xx) intellectual property, (xxi) manufacturing, production or inventory, (xxii) price/earnings ratio, (xxiii) liquidity, (xxiv) financings, (xxv) cash, (xxvi) cost of goods sold, (xxvii) economic value added, (xxviii) accounts receivable, (xxix) number of customers and (xxx) gross profit margin.
Incentive Awards. Incentive awards may be granted under the 2015 Incentive Plan. Incentive awards entitle the participant to receive a payment in Common Stock and/or cash if the terms and conditions established by the Compensation Committee are satisfied. Such terms and conditions may include requirements that the participant complete a specified period of employment, or that the Company, or one of its subsidiaries or affiliates, or the participant attain stated objectives or goals, including objectives stated with respect to performance goals listed as a condition to earning an incentive award. The period for determining whether such requirements are satisfied shall be at least one year.
CHANGE IN CONTROL; VESTING ACCELERATION
Unless an outstanding award is assumed by the surviving entity in the event of a Change of Control (as defined in the 2015 Incentive Plan), the Compensation Committee, in its discretion, may provide that (i) a stock option and SAR will be fully exercisable thereafter, (ii) restricted stock will become transferable and nonforfeitable thereafter, (iii) restricted stock units will be earned in their entirety and converted into transferable and nonforfeitable restricted stock, (iv) the performance goals to which the vesting of performance awards are subject will be deemed to be met at target, such that performance awards immediately become fully vested, and (v) an incentive award will be earned, in whole or in part.
In the event of a Change in Control, the Compensation Committee, in its discretion and without the need for a participant’s consent, may provide that an outstanding award will be assumed by, or a substitute award granted
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62 |
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EQUITY COMPENSATION PLAN INFORMATION
by, the surviving entity in the Change in Control. Unless an outstanding award is assumed by the surviving entity, in the event of a Change in Control, the Compensation Committee, in its discretion and without the need of a participant’s consent, may provide that each award will be cancelled in exchange for a payment.
In addition, in general the Compensation Committee has the discretion to accelerate vesting for outstanding and unvested equity awards.
CLAWBACK
Each award granted under the 2015 Incentive Plan is subject to the condition that we may require that such award be returned, and that any payment made with respect to such award must be repaid, if such action is required under the terms of the Company’s clawback policy described in the “Clawbacks of Incentive Compensation” section and any other compensation recoupment or clawback policy (or policies) that the Company may have in effect from time to time, subject to the terms and conditions of such policy (or policies).
CERTAIN REDUCTION OF PARACHUTE PAYMENTS
The benefits that a participant may be entitled to receive under the 2015 Incentive Plan and other benefits that a participant is entitled to receive under other plans, agreements and arrangements, may constitute “parachute payments” that are subject to the Internal Revenue Code Sections 280G and 4999. The 2015 Incentive Plan provides that such “parachute payments” will be reduced pursuant to the 2015 Incentive Plan if, and only to the extent that, a reduction will allow a participant to receive a greater net after tax amount than a participant would receive absent a reduction.
AMENDMENT AND TERMINATION
The Board of Directors may amend, alter or discontinue the 2015 Incentive Plan at any time and for any reason, provided that (i) no amendment, alteration or discontinuation will be made that would materially impair the rights of a participant in respect of any outstanding award thereunder without such participant’s prior consent, and (ii) an amendment will be contingent on approval of our stockholders to the extent stated by the Compensation Committee or required by applicable law or stock exchange listing requirements.
Subject to the stated provisions, the Board of Directors will have broad authority to amend the 2015 Incentive Plan to take in to account changes in applicable securities and tax laws and accounting rules, as well as other developments. The 2015 Incentive Plan became effective on May 19, 2015, and the Amendment and Restatement will become effective upon approval by our stockholders and will continue in effect until July 29, 2034, unless earlier terminated by the Board of Directors.
NEW 2015 INCENTIVE PLAN BENEFITS
All awards to directors, executive officers, employees and consultants are made at the discretion of the Compensation Committee. As discussed in the “Long-Term Equity Compensation” portion of the Compensation Discussion and Analysis in this proxy statement, the Compensation Committee awarded restricted stock and performance-based restricted stock units to our named executive officers as part of our executive compensation program for 2023-2025. All other future awards to our directors, executive officers, employees and consultants under the 2015 Incentive Plan are discretionary and cannot be determined at this time. As a result, the benefits and amounts that will be received or allocated under the 2015 Incentive Plan are not determinable at this time. We have therefore not included a table that reflects such awards.
FEDERAL INCOME TAX CONSEQUENCES
The following is a brief summary of the federal income tax consequences applicable to awards granted under the 2015 Incentive Plan based on federal income tax laws in effect on the date of this Proxy Statement.
This summary is not intended to be exhaustive and does not address all matters that may be relevant to a particular participant based on his or her specific circumstances. The summary expressly does not discuss the income tax laws of any state, municipality, or non-U.S. taxing jurisdiction, or the gift, estate, excise (including the rules applicable to deferred compensation under Internal Revenue Code Section 409A), or other tax laws other than
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2024 PROXY STATEMENT |
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63 |
RATIFICATION OF AUDITORS
Appointment of Independent Registered Public Accounting Firm
GENERAL
The Audit Committee, with the assistance of management, issued a request for proposal (RFP) regarding the Company’s engagement of an independent registered public accounting firm to audit the Company’s consolidated financial statements for its fiscal year ending December 31, 2024. As a result of the RFP process, the Audit Committee appointed Deloitte to serve as our independent registered public accounting firm for the fiscal year ending December 31, 2024. It is anticipated that a representative of Deloitte and BDO will attend the Annual Meeting, will have an opportunity to make a statement, and will be available to respond to appropriate questions.
CHANGE OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee, with the assistance of management, issued a Request for Proposal (“RFP”) regarding the Company’s engagement of an independent registered public accounting firm for the audit of the Company’s consolidated financial statements as of and for the fiscal year ending December 31, 2024. Thereafter, the Audit Committee conducted a comprehensive, competitive RFP process. The Audit Committee invited several firms to participate in this RFP process. As a result of the RFP process, on December 4, 2023, the Audit Committee approved the appointment of Deloitte as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2024, and notified BDO of Deloitte’s appointment. Deloitte’s engagement as our independent registered public accounting firm began, and BDO’s engagement ended, on August 13, 2024 (the “Engagement Date”), the date that BDO issued its audit reports on our financial statements as of and for the fiscal year ended December 31, 2023, and our internal control over financial reporting as of December 31, 2023.
The audit reports of BDO on our consolidated financial statements for each of the two most recent fiscal years ended December 31, 2023, and December 31, 2022, did not contain an adverse opinion or a disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope, or accounting principles.
Except as discussed below, during the Company’s two most recent fiscal years ended December 31, 2023, and December 31, 2022, and during the subsequent interim period through the Engagement Date, there were no disagreements (as defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions thereto) between the Company and BDO on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures, which disagreements, if not resolved to BDO’s satisfaction, would have caused BDO to make reference to the subject matter of the disagreements in connection with its reports on the Company’s consolidated financial statements for such fiscal years. During the subsequent interim period through the Engagement Date, there was a disagreement between the Company and BDO with respect to the Company’s proposed accounting treatment concerning an adjustment to incremental non-reimbursed expenses incurred in connection with a revenue contract. The Audit Committee and BDO discussed the matter prior to the filing of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023. The disagreement was resolved to the satisfaction of BDO.
During the Company’s two most recent fiscal years ended December 31, 2023, and December 31, 2022, and during the subsequent interim period through the Engagement Date, there were no reportable events (as described in Item 304(a)(1)(v) of Regulation S-K), other than the two material weaknesses in the Company’s internal control over financial reporting that were initially disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020 and an additional three material weaknesses that were disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023. These material weaknesses involved a failure to design or maintain effective controls in response to the risks of material misstatement, including designing and maintaining formal accounting policies, procedures, and controls over significant accounts and disclosures to achieve complete, accurate and timely financial accounting, reporting and disclosures, with respect to: (1) the revenue process, including the review of contract terms input into the Company’s information systems that support the determination of revenue recognition, the accounting for, and the monitoring of the timing of revenue recognition; (2) the financial close, accounting, and reporting processes, as specifically related to management’s review of internally prepared reports and analyses utilized in these processes in reviewing certain financial statement disclosures; (3) the design and implementation of controls over the review of revenue pricing
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2024 PROXY STATEMENT |
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69 |
FREQUENTLY ASKED QUESTIONS
When and where is the Annual Meeting?
We will hold our Annual Meeting on Friday, August 30, 2024, at 2:30 PM Eastern. Our meeting will be held virtually; you will not be able to attend the meeting in person.
How can I attend the Annual Meeting?
In order to attend the Annual Meeting, you must register at www.proxydocs.com/DDD. Upon completing your registration, you will receive further instructions via a confirmation email that includes a unique link that will allow you access to the Annual Meeting and to vote and submit questions during the Annual Meeting. Confirmation emails are sent one hour prior to the start of the Annual Meeting.
As part of the registration process, you must enter the control number located on your proxy card or voting instruction form. If you are a beneficial owner of shares registered in the name of a bank, brokerage firm, broker-dealer, or similar organization, you will also need to provide the registered name on your account and the name of your bank, brokerage firm, broker-dealer, or similar organization as part of the registration process.
On the day of the Annual Meeting, August 30, 2024, stockholders may begin to log in to the Annual Meeting platform 15 minutes prior to the Annual Meeting. The Annual Meeting will begin promptly at 2:30 PM Eastern.
We will have technicians ready to assist you with any technical difficulties you may encounter accessing the virtual-only Annual Meeting platform, including any difficulties voting or submitting questions. Technical support contact information including links to an FAQ Knowledgebase and a meeting specific technical support telephone number will be provided on the meeting invitation sent one hour prior to the meeting and will be available until the meeting concludes.
How do I ask a question at the Annual Meeting?
Our virtual Annual Meeting will allow stockholders to submit questions before and during the Annual Meeting. Please follow the instructions in the email you receive upon registering. Questions pertinent to meeting matters will be answered during the meeting subject to time constraints. Questions regarding personal matters, including those related to employment, product or service issues, or suggestions for product innovations, are not pertinent to meeting matters and, therefore, will not be answered.
What is included in our proxy materials?
Our proxy materials, which are available at www.proxydocs.com/DDD, include: our Proxy Statement and our 2023 Annual Report to Stockholders. If you received these materials by mail (rather than by electronic delivery), these materials also included a proxy card or voting instruction form.
Who can vote and what is the quorum requirement?
A quorum, or the presence of the majority of the outstanding shares of Common Stock as of the record date, is required to transact business at the Annual Meeting. The record date is July 2, 2024. Abstentions and broker non-votes are treated as present for quorum purposes.
Our Common Stock is our only outstanding class of voting securities. As of July 2, 2024, the record date for the Annual Meeting, there were 133,575,269 shares of Common Stock issued and outstanding. Each such share of Common Stock is entitled to one vote on each matter to be voted on at the Annual Meeting.
What is the difference between holding shares as a stockholder of record and as a beneficial owner of shares held in street name?
Stockholder of Record. If your shares of Common Stock are registered directly with Computershare, our transfer agent, you are considered a “stockholder of record” of those shares.
Beneficial Owner of Shares Held in Street Name. If your shares are held in an account at a bank, brokerage firm, broker-dealer, or similar organization, then you are a “beneficial owner of shares held in street name.” In that case, you will have received these proxy materials from the bank, brokerage firm, broker-dealer, or similar organization
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2024 PROXY STATEMENT |
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71 |
FREQUENTLY ASKED QUESTIONS
proxy cards or voting instruction forms will likely relate to shares that you own in different accounts, in different names, or with different banks, brokerage firms, broker-dealers, or similar organizations.
Please vote the shares covered by each proxy card or voting instruction form that you receive. This will ensure that all your shares are represented and voted at the Annual Meeting.
How do I vote?
Please refer to the instructions on your proxy card or voting instruction form to cast your vote. To be valid, your vote by Internet, telephone, or mail must be received by the deadline specified on the proxy card or voting instruction form, as applicable. Whether or not you plan to attend the Annual Meeting, we urge you to vote and submit your proxy in advance of the meeting.
Can I change my vote after I have voted?
Any stockholder may vote during the Annual Meeting whether or not he or she has previously voted and regardless of whether the prior vote was cast by Internet, telephone or mail. Since the Annual Meeting will be conducted solely online via live webcast, you will be able to vote electronically on the Internet during the Annual Meeting at www.proxydocs.com/DDD until the Chair of the Annual Meeting declares the polls closed. Instructions on voting during the Annual Meeting will be provided once you access the meeting webcast. If you attend in the Annual Meeting virtually on the Internet, your shares will be counted as present for quorum purposes.
If you wish to revoke your proxy, you may do so at any time before your shares are voted at the Annual Meeting by voting electronically at a later time, voting by telephone at a later time, submitting a properly signed proxy or voting instruction form with a later date, or voting live during the Annual Meeting.
Who counts the votes?
Representatives of Mediant, a BetaNXT company, will tabulate the votes and act as the inspector of election.
Where can I find the voting results of the Annual Meeting?
We expect to announce the preliminary voting results at the Annual Meeting. The final voting results will be reported in a Current Report on Form 8-K that we will file with the SEC after the Annual Meeting.
Who pays the expenses of this proxy solicitation?
This Proxy Statement is being delivered to you on our behalf. We are bearing the expenses of preparing, printing, web hosting, and mailing this Proxy Statement and other proxy materials and all other expenses of soliciting proxies. In addition, our directors, officers, and employees may solicit proxies by personal interview, mail, telephone, Internet, or other means of electronic transmission, although they will receive no additional compensation for such solicitation.
We have retained Georgeson Inc. (“Georgeson”) to solicit proxies and to request banks, brokerage firms, broker-dealers, or similar organizations to forward soliciting material to our beneficial owners. We agreed to pay Georgeson a fee of $32,100 for these services and will reimburse it for payments made to banks, brokerage firms, broker-dealers, or similar organizations for their expenses in forwarding soliciting material. We have also agreed that Georgeson’s fees may increase if certain changes in the scope of its services occur.
What is householding?
Some brokers and other nominee record holders may be “householding” our proxy materials. This means a single proxy statement and annual report with separate proxy cards will be delivered to multiple stockholders who share an address, unless we receive other instructions. If you are a beneficial owner and receive multiple copies of our proxy materials and you would like to receive only one copy, or if you and another shareholder receive only one copy and would like to receive multiple copies, contact your bank, broker, or other nominee.
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2024 PROXY STATEMENT |
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73 |
APPENDIX A
2015 INCENTIVE PLAN OF
3D SYSTEMS CORPORATION
As Amended and Restated Effective August 30, 2024
Section 1. Purpose; Effective Date; Definitions
The purpose of the 3D Systems Corporation 2015 Incentive Plan (the “Plan”) is to assist the Company and its Subsidiaries and Affiliates in attracting and retaining employees and consultants of outstanding competence by providing an incentive that permits the persons responsible for the Company’s growth to share directly in that growth and to further the identity of their interests with the interests of the Company’s stockholders.
For purposes of the Plan, the following terms shall be defined as set forth below:
(a) “Affiliate” means any current or future entity other than the Company and its Subsidiaries that is designated by the Board as a participating employer under the Plan.
(b) “Award” means a grant of a Stock Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit, a Performance Award or an Incentive Award under the Plan.
(c) “Award Agreement” means a written agreement between the Company and a Participant or a written notice from the Company to a Participant specifically setting forth the terms and conditions of an Award granted under the Plan.
(d) “Beneficiary” means the person designated by the Participant prior to the Participant’s death in a form acceptable to the Committee to exercise Awards or receive benefits pursuant to the terms of this Plan. If no beneficiary is designated by the Participant, the Beneficiary shall be the Participant’s estate.
(e) “Board” means the Board of Directors of the Company.
(f) “Cause” means, but is not limited to, any of the following actions: embezzlement; fraud; nonpayment of any obligation owed to the Company, a Subsidiary or an Affiliate; breach of fiduciary duty; deliberate disregard of the Company’s rules resulting in loss, damage or injury to the Company; unauthorized disclosure of any trade secret or confidential information; conduct constituting unfair competition; and the inducement of any customer of the Company to breach a contract with the Company. The determination of whether Cause exists shall be made in the Company’s sole discretion.
(g) “Code” means the Internal Revenue Code of 1986, and the regulations promulgated thereunder, as amended from time to time, and any successor thereto.
(h) “Committee” means the Committee referred to in Section 2 of the Plan.
(i) “Common Stock” means the common stock, $0.001 par value per share, of the Company.
(j) “Company” means 3D Systems Corporation, a corporation organized under the laws of the State of Delaware, or any successor corporation.
(k) “Date of Grant” means the date as of which the Committee grants an Award. If the Committee contemplates an immediate grant to a Participant, the Date of Grant shall be the date of the Committee’s action. If the Committee contemplates a date on which the grant is to be made other than the date of the Committee’s action, the Date of Grant shall be the date so contemplated and set forth in or determinable from the records of action of the Committee; provided, however, that the Date of Grant shall not precede the date of the Committee’s action.
(l) “Detrimental Activity” means: (i) the rendering of services for any organization or engaging directly or indirectly in any business which is or becomes competitive with the Company, or which organization or business, or the rendering of services to such organization or business, is or becomes otherwise prejudicial to or in conflict with the interests of the Company; (ii) the disclosure to anyone outside the Company, or the use in other than the Company’s business, without prior written authorization from the Company, of any confidential information or material relating to the business of the Company, acquired by the Participant either during or after employment with the Company; (iii) the failure or refusal to disclose promptly and to assign to the Company all right, title and interest in any invention or idea, patentable or not, made or conceived by the Participant during employment by the Company, relating in any manner to the actual or anticipated business, research or development work of the
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2024 PROXY STATEMENT |
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A-1 |
APPENDIX A
Company or the failure or refusal to do anything reasonably necessary to enable the Company to secure a patent where appropriate in the United States and in other countries; (iv) a violation of any rules, policies, procedures or guidelines of the Company; (v) any attempt directly or indirectly to induce any employee of the Company to be employed or perform services elsewhere or any attempt directly or indirectly to solicit the trade or business of any current or prospective customer, supplier or partner of the Company; (vi) the Participant being convicted of, or entering a guilty plea with respect to, a crime, whether or not connected with the Company; or (vii) any other conduct or act determined in the sole discretion of the Committee or the Board to be injurious, detrimental or prejudicial to any interest of the Company.
(m) “Disability” means disability as determined under procedures established by the Committee for purposes of this Plan.
(n) “Dividend Equivalent Account” means a bookkeeping account in accordance with Section 18 and related to a grant of Restricted Stock Units that is credited with the amount of any ordinary cash dividends or stock distributions that would be payable with respect to the shares of Common Stock subject to such Awards had such shares been outstanding shares of Common Stock.
(o) “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, and any successor thereto.
(p) “Fair Market Value” means, as of any given date, unless otherwise determined by the Committee in good faith, the closing price of the Common Stock on the principal stock exchange on which the Company’s shares are listed on such date.
(q) “Incentive Award” means an Award granted under Section 8 that, subject to such terms and conditions as may be prescribed by the Committee, entitles the Participant to receive a payment in Common Stock and/or cash from the Company or a Subsidiary or Affiliate.
(r) “Incentive Stock Option” means any Stock Option designated as an “incentive stock option” within the meaning of Section 422 of the Code. No Stock Option that is intended to be an Incentive Stock Option shall be invalid for failure to qualify as an Incentive Stock Option.
(s) “Nonqualified Stock Option” means any Stock Option that is not an Incentive Stock Option.
(t) “Participant” means a member of the Board, an employee or a consultant who receives an Award under this Plan.
(u) “Performance Award” means an Award under Section 8 that is based on the level of attainment of performance goals related to objective business criteria.
(v) “Person” means “person” as defined in Section 3(a)(9) of the Exchange Act and as used in Sections 13(d) and 14(d) thereof, including a “group” as defined in Section 13(d) of the Exchange Act but excluding the Company, any Subsidiary or any Affiliate, and any employee benefit plan sponsored or maintained by the Company or any Subsidiary or Affiliate (including any trustee of such plan acting in the capacity of trustee).
(w) “Plan” means this 3D Systems Corporation 2015 Incentive Plan, and any successor thereto, as amended from time to time.
(x) “Plan Year” shall mean the calendar year.
(y) “Restricted Stock” means shares of Common Stock subject to restrictions imposed in connection with an Award granted under Section 7.
(z) “Restricted Stock Unit” means a notional bookkeeping entry representing the equivalent of a share of Common Stock, subject to restrictions imposed in connection with an Award granted under Section 7.
(aa) “Retirement” means the Termination of the Participant on or after the Participant’s attainment of age 65.
(bb) “Section 409A” means Section 409A of the Code.
(cc) “Stock Appreciation Right” or “SAR” means a right granted under Section 6 to receive payment, in cash and/or Common Stock, equal in value to the excess of the Fair Market Value of the specified number of shares of
Common Stock on the date the Stock Appreciation Right is exercised over the grant price of the Stock Appreciation Right, as determined in accordance with Section 6(a).
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A-2 |
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2024 PROXY STATEMENT |
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APPENDIX A
(dd) “Stock Option” or “Option” means any option to purchase shares of Common Stock (including Restricted Stock, if the Committee so determines) granted pursuant to Section 5.
(ee) “Subsidiary” means those corporations fifty percent (50%) or more of whose outstanding voting stock is owned or controlled, directly or indirectly, by the Company and those partnerships and joint ventures in which the Company owns directly or indirectly a fifty percent (50%) or more interest in the capital account or earnings.
(ff) “Termination” means the complete cessation of services with the Company, a Subsidiary, or an Affiliate with no anticipated resumption of services by the Company, a Subsidiary, or an Affiliate in the capacity as an employee or independent contractor. A Participant’s employment or services relationship with the Company shall be treated as continuing intact while the individual is on military leave, sick leave, or other bona fide Company-approved leave of absence if the period of leave does not exceed three (3) months, or if longer, so long as the individual retains a right to reemployment with the Company under an applicable statute or by agreement. If the period of leave exceeds three (3) months, and the Participant’s right to reemployment is not provided either by statute or by contract, the Participant shall be treated for purposes of this Plan as having experienced a Termination of the Participant’s employment or services relationship with the Company on the first day immediately following such three-month period.
Section 2. Administration
The Plan shall be administered by the Compensation Committee, or a subcommittee thereof (the “Committee”), which consists of two or more members of the Board, each of whom shall be a “Non-Employee Director,” as that term is defined in Rule 16b-3(b)(3)(i) of the Exchange Act, but the failure of a Committee member to satisfy such requirements shall not affect any actions taken by the Committee.
The Committee shall have full authority to grant, pursuant to the terms of the Plan, Awards to employees and consultants eligible under Section 4. The Board shall have full authority to grant, pursuant to the terms of the Plan, Awards to members of the Board.
In particular the Committee shall have the authority, without limitation:
(i) to select the employees and consultants to whom Awards may be granted hereunder, separately or in tandem, from time to time;
(ii) subject to the provisions of Sections 3 and 9, to determine the number of shares of Common Stock to be covered by each such Award granted hereunder;
(iii) to determine the terms and conditions, not inconsistent with the terms of the Plan, of any Award granted hereunder, which terms and conditions are not required to be the same in respect of each Participant;
(iv) to designate the Corporate Secretary of the Company, other officers or employees of the Company or competent professional advisors to assist the Committee in the administration of the Plan, and to grant authority to such persons to execute agreements or other documents on its behalf;
(v) as it pertains to Awards granted to employees and consultants residing in foreign jurisdictions, to adopt such supplements or subplans to the Plan as may be necessary or appropriate to comply with the applicable laws of such foreign jurisdictions and to afford Participants favorable treatment under such laws;
(vi) to approve forms of agreements for use under the Plan;
(vii) to correct administrative errors; and
(viii) to allow Participants to satisfy Withholding Tax Obligations as such manner as may be determined by the Committee in accordance with the terms of the Plan.
The Committee shall have the authority to adopt, alter, and repeal such rules, guidelines and practices governing the Plan as it shall, from time to time, deem advisable; to interpret the terms and provisions of the Plan and any Award issued under the Plan (and any Award Agreement relating thereto); and to otherwise supervise the administration of the Plan.
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2024 PROXY STATEMENT |
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APPENDIX A
All decisions made by the Committee pursuant to the provisions of the Plan shall be made in the Committee’s sole discretion and shall be final and binding on all persons, including the Company and Participants.
The Committee may delegate to officers of the Company its duties, powers, and authority under this Plan pursuant to such conditions and limitations as the Committee may establish, except that only the Committee may administer the Plan and Awards to Participants who are subject to Section 16 of the Securities Exchange Act of 1934 or to officers who are or reasonably may become Covered Employees. In the event of such delegation of authority, any reference in this Plan to Committee shall be to the officer(s) to whom the Committee has delegated authority to administer the Plan.
The Company agrees to indemnify and to defend to the fullest extent permitted by law each member of the Committee against all liabilities, damages, costs and expenses (including attorney’s fees and amounts paid in settlement of any claims approved by the Company) occasioned by any act or omission to act in connection with the Plan or any Award Agreement, if such act or omission is in good faith and not due to willful misconduct or gross negligence. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled under the Company’s Articles of Incorporation, Bylaws, by contract, as a matter of law, or otherwise, or under any power that the Company may have to indemnify them or hold them harmless.
Section 3. Common Stock Subject to Plan
(a) Number of Shares Available for Award. The total number of shares of Common Stock reserved and available for distribution under the Plan and the total number of shares of Common Stock that can be issued under Stock Options shall be twenty-nine million two hundred thirty-five thousand eleven (29,235,011) shares, which reflects a four million (4,000,000) share increase in the total number of shares of Common Stock available immediately prior to the Effective Date.
If any Award is cancelled, forfeited, expires or otherwise terminates without the issuance or delivery of nonforfeitable shares of Common Stock or is withheld by, or otherwise remitted to, the Company to satisfy a Participant’s tax withholding liabilities, or if any Award is settled for cash or otherwise does not result in the issuance of all or a portion of the shares of Common Stock subject to such Award, then the shares of Common Stock subject to the Award shall, to the extent of such cancellation, forfeiture, expiration, termination, withholding, remittance, cash settlement or non-issuance, again be available for issuance under the Plan.
In the event of any change in the outstanding shares of Common Stock or other securities then subject to the Plan by reason of any stock split, reverse stock split, stock dividend, recapitalization, merger, consolidation, combination or exchange of shares or other similar corporate change, or if the outstanding securities of the class then subject to the Plan are exchanged for or converted into cash, property or a different kind of security, or if cash, property or securities are distributed in respect of such outstanding securities (other than a regular cash dividend), then, unless the terms of such transaction shall provide otherwise, such equitable adjustments shall be made in the Plan and the Awards thereunder (including, without limitation, appropriate and proportionate adjustments in (i) the number and type of shares or other securities that may be acquired pursuant to Awards theretofore granted under the Plan; (ii) the maximum number and type of shares or other securities that may be issued pursuant to Awards thereafter granted under the Plan; (iii) the number of shares of Restricted Stock and shares of Common Stock under Restricted Stock Units that are outstanding and the terms thereof; and (iv) the maximum number of shares or other securities with respect to which Awards may thereafter be granted to any Participant in any Plan Year) as the Committee determines are necessary or appropriate, including, if necessary, any adjustment in the maximum number of shares of Common Stock available for distribution under the Plan as set forth in this Section 3. Such adjustments shall be conclusive and binding for all purposes of the Plan.
In the event that (i) any Stock Option granted under the Plan is exercised through the tendering of shares of Common Stock (either actually or by attestation) or by the withholding of shares of Common Stock by the Company or (ii) withholding tax liabilities resulting from an Award are satisfied by the withholding of shares of Common Stock, then the number of shares tendered or withheld shall be available for future grants of Awards.
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2024 PROXY STATEMENT |
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APPENDIX A
Stock Option that is granted to an individual who, on the Date of Grant, owns or is deemed to own Common Stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any of its Subsidiaries, shall be exercisable more than five (5) years after the Date of Grant of such Incentive Stock Option. Stock Options shall be exercisable at such time or times and subject to such terms and conditions as shall be determined by the Committee and set forth in the applicable Award Agreement.
(c) Method of Exercise. Stock Options may be exercised in whole or in part subject to the terms of the applicable Award Agreement by giving written notice of exercise to the Company, or its designated representative, specifying the number of shares to be purchased.
Such notice shall be accompanied by payment in full of the exercise price by check, note or such other instrument as the Committee may accept and, in the case of Nonstatutory Stock Options, payment in full of the Withholding Tax Obligation. As determined by the Committee, in its sole discretion, payment of the exercise price in full or in part also may be made through (a) a “cashless exercise” (which will be conducted in a manner acceptable to the Company through a third party broker, and otherwise in compliance with Section 402 of the Sarbanes-Oxley Act) or in which the exercise price (and any interest thereon) is subtracted from the number of shares of Common Stock received by the Participant upon exercise of the Stock Option (based on the Fair Market Value of the Common Stock on the date the Option is exercised); or (b) the surrender of other Common Stock which (i) in the case of Common Stock acquired upon the exercise of an Award, has been owned by the Participant for more than six months on the date of surrender; and (ii) has a Fair Market Value on the date of surrender that, together with any cash paid, is equal to the aggregate exercise price of the Common Stock as to which said Stock Option shall be exercised.
No shares of Common Stock shall be issued until full payment has been made. No Participant shall have interest in or be entitled to voting rights or dividends or other rights or privileges of stockholders of the Company with respect to shares of Common Stock granted pursuant to the Plan unless, and until, shares of Common Stock actually are issued to such person and then only from the date such person becomes the record owner thereof and, if requested, has given the representation described in Section 15.
(d) Termination by Reason of Death or Disability. Except as otherwise expressly approved by the Committee and set forth in the applicable Award Agreement, if a Participant has a Termination of employment by or service with the Company, a Subsidiary or an Affiliate by reason of death or Disability, any Stock Option held by such Participant thereafter may be exercised by the Participant or the Participant’s Beneficiary in the case of death, for the number of shares that the Participant was eligible to exercise on the date of Termination, until the expiration of twelve (12) months after the date of such Termination, provided such Stock Option was exercisable on such date of Termination, but no later than the expiration date of the Stock Option.
(e) Termination by the Company without Cause, Retirement, Resignation. Except as otherwise expressly approved by the Committee and set forth in the applicable Award Agreement, if a Participant has a Termination of employment by or service with the Company, a Subsidiary or an Affiliate (other than as provided in subsection (d) above) by the Company without Cause, by reason of Retirement, or on account of voluntary resignation provided that it is determined by the Committee that Cause did not exist as of the time of resignation, any Stock Option held by such Participant thereafter may be exercised, for the number of shares that the Participant was eligible to exercise on the date of Termination, until the expiration of ninety (90) days after the date of such Termination, provided such Stock Option was exercisable on such date of Termination, but no later than the expiration date of the Stock Option.
(f) Other Termination. Unless otherwise determined by the Committee, if a Participant’s employment by or service with the Company, a Subsidiary or an Affiliate is terminated for any reason other than as specified in subsections (d) and (e) above, including Termination with Cause, any unexercised Stock Option granted to such Participant shall be cancelled on the date of such termination, whether or not exercisable on such date.
(g) Incentive Stock Options. Anything in the Plan to the contrary notwithstanding, no term of this Plan relating to Incentive Stock Options shall be interpreted, amended or altered, nor shall any discretion or authority granted under the Plan be so exercised, without the consent of the Participant(s) affected, to disqualify any Incentive Stock Option under Section 422 of the Code. If an Incentive Stock Option is exercised other than in accordance with the exercise periods that apply for purposes of Section 422 of the Code or if the aggregate Fair Market Value of the Common Stock with respect to which the Incentive Stock Options are exercisable for the first time during any
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A-6 |
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2024 PROXY STATEMENT |
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APPENDIX A
and until, shares of Common Stock actually are issued to such person and then only from the date such person becomes the record owner thereof and, if requested, has given the representation described in Section 15.
(e) Termination by Reason of Death or Disability. Except as otherwise expressly approved by the Committee and set forth in the applicable Award Agreement, if a Participant has a Termination of employment by or service with the Company, a Subsidiary or an Affiliate by reason of death or Disability, any Stock Appreciation Right held by such Participant thereafter may be exercised by the Participant or the Participant’s Beneficiary in the case of death, for the number of shares that the Participant was eligible to exercise on the date of Termination, until the expiration of twelve (12) months after the date of such Termination, provided such Stock Appreciation Right was exercisable on such date of Termination, but no later than the expiration date of the Stock Appreciation Right.
(f) Termination by the Company without Cause, Retirement, Resignation. Except as otherwise expressly approved by the Committee and set forth in the applicable Award Agreement, if a Participant has a Termination of employment by or service with the Company, a Subsidiary or an Affiliate (other than as provided in subsection (e) above) by the Company without Cause, by reason of Retirement, or on account of voluntary resignation provided that it is determined by the Committee that Cause did not exist as of the time of resignation, any Stock Appreciation Right held by such Participant thereafter may be exercised, for the number of shares that the Participant was eligible to exercise on the date of Termination, until the expiration of ninety (90) days after the date of such Termination, provided such Stock Appreciation Right was exercisable on such date of Termination, but no later than the expiration date of the Stock Appreciation Right.
(g) Other Termination. Unless otherwise determined by the Committee, if a Participant’s employment by or service with the Company, a Subsidiary or an Affiliate is terminated for any reason other than as specified in subsections (e) and (f) above, including Termination with Cause, any unexercised Stock Appreciation Right granted to such Participant shall be cancelled on the date of such termination, whether or not exercisable on such date.
Section 7. Restricted Stock and Restricted Stock Units
(a) Grant of Restricted Stock and Restricted Stock Units. The Committee may grant to any Participant one or more Awards of Restricted Stock or Restricted Stock Units on such terms and subject to such conditions as may be established by the Committee that are set forth in the Award Agreement. Restricted Stock or Restricted Stock Units may be granted subject to such restrictions and provisions, whether based on performance standards, periods of service, retention by the Participant of ownership of specified shares of Common Stock or other criteria, not inconsistent with the terms of this Plan, as may be established by the Committee. Each Award of Restricted Stock or Restricted Stock Units may be subject to a different restricted period and additional restrictions; however, a Participant’s Restricted Stock or Restricted Stock Unit Award shall not be contingent on any payment by or consideration from the Participant other than the rendering of services, except as the Committee may otherwise expressly determine. Neither Restricted Stock nor Restricted Stock Units may be sold, transferred, assigned, pledged or otherwise encumbered or disposed of during the restricted period or prior to the satisfaction of any other applicable restrictions.
(b) Recordkeeping of Award; Lapse of Restrictions. As soon as practicable after the Date of Grant of Restricted Stock or a Restricted Stock Unit by the Committee, the Company shall:
(i) for Restricted Stock Awards, cause to be transferred on the books of the Company or its agent, shares of Common Stock, registered on behalf of the Participant, evidencing the Restricted Stock covered by the Award, subject to forfeiture to the Company as of the Date of Grant if an Award Agreement with respect to the Restricted Stock covered by the Award is not duly executed by the Participant and timely returned to the Company. Until the lapse or release of the restrictions applicable to the shares subject to an Award of Restricted Stock, the share certificates representing such Restricted Stock may be held in custody by the Company or its designee, in physical or book entry form, or, if the certificates bear a restrictive legend, by the Participant. Upon the lapse or release of all restrictions with respect to an Award as described in Section 7(e)(i), one or more share certificates, registered in the name of the Participant, for an appropriate number of shares as provided in Section 7(e)(i), free of any restrictions set forth in the Plan and the related Award Agreement, or a statement from the Company representing such shares in book entry form free of any restrictions set forth in the Plan and the related Award Agreement, shall be delivered to the Participant as provided in Section 7(e);
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2024 PROXY STATEMENT |
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APPENDIX A
of the date the restrictions lapsed, (2) solely in the Committee’s discretion, one or more share certificates registered in the name of the Participant, for the appropriate number of shares of Common Stock, or a statement from the Company representing that such shares have been issued, are in book entry form and are free of all restrictions, except for any restrictions that may be imposed by law, or (3) any combination of cash and shares of Common Stock.
(f) Forfeiture. Restricted Stock shall be forfeited and returned to the Company, and Restricted Stock Units shall be forfeited, and all rights of the Participant with respect to such Restricted Stock or Restricted Stock Units shall terminate unless the Participant continues in the service of the Company, a Subsidiary or an Affiliate until the expiration of the restricted period for such Restricted Stock or Restricted Stock Unit Award and satisfies any and all other conditions set forth in the Award Agreement. The Committee shall determine the restricted period (which may, but need not, lapse in installments) and any other terms and conditions applicable with respect to any Restricted Stock or Restricted Stock Unit Award, which shall be set forth in the Award Agreement.
(g) Committee Discretion. Notwithstanding anything contained in this Section 7 to the contrary, the Committee may, in its sole discretion, waive the forfeiture period and any other conditions set forth in any Award Agreement under appropriate circumstances (including, but not limited to, the death, Disability or Retirement of the Participant or a material change in circumstances arising after the date of an Award) and subject to such terms and conditions (including forfeiture of a proportionate number of the Restricted Stock or Restricted Stock Units) as the Committee shall deem appropriate.
Section 8. Performance Awards and Incentive Awards
(a) Performance Goals. Notwithstanding anything else contained in the Plan to the contrary, the Committee may determine on the Date of Grant, that any Restricted Stock or Restricted Stock Unit granted to a Participant shall be a Performance Award and shall vest only upon the determination by the Committee that Performance Goals established by the Committee have been attained, in whole or in part. Such performance goals, the business criteria upon which they are based, and the weights or other formulas to be applied to any such business criteria shall be set forth in writing by the Committee. A “Performance Goal” means a performance objective that is stated with respect to one or more of the following business criteria, either individually or in combination, applied to the Participant or to the Company, a Subsidiary or an Affiliate as a whole or to individual units thereof, and measured either absolutely or relative to a designated group of comparable companies: (i) cash flow, (ii) earnings per share, (iii) earnings before interest, taxes, depreciation, and amortization (EBITDA), (iv) return on equity, (v) total stockholder return, (vi) return on capital, (vii) return on assets or net assets, (viii) revenue, (ix) income or net income, (x) operating income or net operating income, (xi) operating profit or net operating profit, (xii) operating margin, (xiii) return on operating revenue, (xiv) customer satisfaction, (xv) market share, (xvi) expenses, (xvii) credit rating, (xviii) mergers and acquisitions or divestitures, (xix) product development, (xx) intellectual property, (xxi) manufacturing, production or inventory, (xxii) price/earnings ratio, (xxiii) liquidity, (xxiv) financings, (xxv) cash, (xxvi) cost of goods sold, (xxvii) economic value added, (xxviii) accounts receivable, (xxix) number of customers and (xxx) gross profit margin. The Participant’s rights in the Performance Award shall become exercisable, transferable or nonforfeitable only to the extent that the Committee certifies in writing that such objectives have been achieved. A Performance Goal may be expressed on an absolute basis or relative to the performance of one or more similarly situated companies or a published index. When establishing Performance Goals, the Committee may exclude any or all special, unusual or extraordinary items as determined under U.S. generally accepted accounting principles, including, without limitation, the charges or cost associated with restructurings of the Company, discontinued operations, other unusual or non-recurring items and the cumulative effects of accounting changes. The Committee may also adjust Performance Goals as it deems equitable in recognition of unusual or non-recurring events affecting the Company, changes in applicable tax laws or accounting principles or such other factors as the Committee may determine.
(b) Maximum Performance Award. The maximum, aggregate amount that can be awarded to any one Participant pursuant to Performance Awards in one (1) Plan Year is five hundred thousand (500,000) shares of Common Stock.
(c) Incentive Awards. The Committee shall designate Participants to whom Incentive Awards are made for incentive compensation opportunities. All Incentive Awards shall be finally determined exclusively by the Committee under the procedures established by the Committee.
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2024 PROXY STATEMENT |
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APPENDIX A
(d) Terms And Conditions Of Incentive Awards. The Committee, at the time an Incentive Award is made, shall specify the terms and conditions which govern the award. Such terms and conditions may include, by way of example and not of limitation, requirements that the Participant complete a specified period of employment with the Company or a Subsidiary or Affiliate, or that the Company, a Subsidiary or Affiliate, or the Participant attain stated objectives or goals, including objectives stated with respect to Performance Goals as a condition to earning an Incentive Award. The period for determining whether such requirements are satisfied shall be at least one year. The maximum, aggregate amount that can be awarded to any one Participant for Incentive Awards denominated in shares of Common Stock in one Plan Year is five hundred thousand (500,000) shares of Common Stock and the maximum, aggregate amount that can be awarded to any one Participant under one or more Incentive Awards denominated in cash in one Plan Year is three million five hundred thousand dollars ($3,500,000).
(e) Incentive Awards not subject to Liability. No right or interest of a Participant in an Incentive Award shall be liable for, or subject to, any lien, obligation, or liability of such Participant.
(f) Settlement of Incentive Awards. An Incentive Award that is earned shall be settled with a single lump sum payment which may be in cash, shares of Common Stock or a combination of cash of Common Stock, as determined by the Committee.
(g) Stockholder Rights. No Participant shall, as a result of receiving an Incentive Award, have any rights as a stockholder of the Company until the date that the Incentive Award is settled and then only to the extent that the Incentive Award is settled by the issuance of Common Stock.
(h) Employee Status for Performance Awards and Incentive Awards. Notwithstanding Section 1(ff), if the terms of an Incentive Award or a Performance Award provide that a payment will be made thereunder only if the Participant completes a stated period of employment or continued service the Committee may decide to what extent leaves of absence for governmental or military service, illness, temporary disability or other reasons shall not be deemed interruptions of continuous employment or service.
Section 9. Change in Control
(a) “Change in Control” means:
(i) the Company is merged into or consolidated with another corporation or other entity and as a result of such merger or consolidation less than seventy percent (70%) of the combined voting power of the outstanding voting securities of the surviving or resulting corporation or other entity shall, after giving effect to such merger or consolidation, be “beneficially owned” (within the meaning of Sections 13(d) and 14(d) of Exchange Act) in the aggregate, directly or indirectly, by the former stockholders of the Company (excluding from such computation any such securities beneficially owned, directly or indirectly, by “affiliates” of the Company as defined in Rule 12b-2 under the Exchange Act and such securities so beneficially owned, directly or indirectly, by a party to such merger or consolidation), provided however, that Company securities acquired directly from the Company shall be disregarded for this purpose,
(ii) the Company shall sell all or substantially all of its assets to any other person or entity (other than a wholly owned subsidiary),
(iii) any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act, other than the Company, any trustee or other fiduciary holding securities under an employee benefit plan of the Company, or any Company owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company), is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act) directly or indirectly, of securities of the Company representing thirty percent (30%) or more of the combined voting power of the Company’s then outstanding securities, provided however, that Company securities acquired directly from the Company shall be disregarded for this purpose,
(iv) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board, and any new director (other than a director designated by a person who has entered into an agreement with the Company to effect a transaction described in clause (i), (ii), (iii) or (v) of this Section 9(a) and other than a director initially elected or nominated as a result of an actual or threatened election contest with respect to directors) whose election by the Board or nomination for election by the Company’s stockholders was approved by
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APPENDIX A
a vote of a majority of the directors then still in office who either (x) were directors at the beginning of such period or (y) were so elected or nominated with such approval, cease for any reason to constitute at least a majority of the Board, or
(v) the Company shall become subject for any reason to a voluntary or involuntary dissolution or liquidation.
In addition, if a Change in Control (as defined in clauses (i), (ii), (iii), (iv) or (v) above) constitutes a payment event with respect to any Stock Option, Stock Appreciation Right, Performance Award, Restricted Stock Unit award, Incentive Award or Restricted Stock that provides for the deferral of compensation and is subject to Section 409A of the Code, no payment will be made under that award on account of a Change in Control unless the event described in clause (i), (ii), (iii), (iv) or (v) above, as applicable, constitutes a “change in control event” as defined in Treasury Regulation Section 1.409A-3(i)(5).
(b) “Control Change Date” means the date on which a Change in Control occurs. If a Change in Control occurs on account of a series of transactions, the Control Change Date is the date of the last of such transactions.
(c) Impact Of Change In Control. Unless an outstanding award is assumed in accordance with Section 9(d) and notwithstanding any other provision of the Plan, upon a Control Change Date, the Committee is authorized to, and in its discretion, may provide that (i) a Stock Option and Stock Appreciation Right shall be fully exercisable thereafter, (ii) Restricted Stock will become transferable and nonforfeitable thereafter, (iii) Restricted Stock Units shall be earned in their entirety and converted into transferable and nonforfeitable Restricted Stock, (iv) the performance goals to which the vesting of Performance Awards are subject shall be deemed to be met at target, such that Performance Awards immediately become fully vested, and (v) an Incentive Award shall be earned, in whole or in part, in accordance with the terms of the applicable Agreement.
(d) Assumption Upon Change In Control. In the event of a Change in Control the Committee, in its discretion and without the need for a Participant’s consent, may provide that an outstanding Stock Option, Stock Appreciation Right, award of Restricted Stock, Restricted Stock Unit, Performance Award or Incentive Award shall be assumed by, or a substitute award granted by, the surviving entity in the Change in Control. Such assumed or substituted award shall be of the same type of award as the original Stock Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit, Performance Award or Incentive Award being assumed or substituted. The assumed or substituted award shall have a value, as of the Control Change Date, that is substantially equal to the value of the original award (or the difference between the Fair Market Value and the exercise price in the case of Stock Options and Stock Appreciation Rights) as the Committee determines is equitably required and such other terms and conditions as may be prescribed by the Committee.
(e) Cash-Out Upon Change In Control. Unless an outstanding award is assumed in accordance with Section 9(d), in the event of a Change in Control the Committee, in its discretion and without the need of a Participant’s consent, may provide that each Stock Option, Stock Appreciation Right, Performance Award, Incentive Award, award of Restricted Stock and Restricted Stock Unit shall be cancelled in exchange for a payment. The payment may be in cash, shares of Common Stock or other securities or consideration received by Company stockholders in the Change in Control transaction. The amount of the payment shall be an amount that is substantially equal to (i) the amount by which the price per share received by Company stockholders in the Change in Control exceeds the Stock Option exercise price in the case of a Stock Option and Stock Appreciation Right, or (ii) the price per share received by stockholders for each share of Common Stock subject to an award of Restricted Stock or Restricted Stock Units or an Incentive Award.
Section 10. Transferability; Successors
Awards granted under the Plan may not be sold, pledged, assigned, hypothecated, transferred or disposed of in any manner other than by will or the laws of descent or distribution and may be exercised, during the lifetime of the Participant, only by the Participant. Any act in violation of this Section 10 shall be void. Notwithstanding the foregoing, the Committee may permit further transferability of Awards other than Incentive Stock Options, on a general or specific basis, and may impose conditions and limitations on any permitted transferability.
The provisions of the Plan shall be binding upon and inure to the benefit of all successors of any person receiving Common Stock of the Corporation pursuant to the Plan, including, without limitation, the estate of such
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2024 PROXY STATEMENT |
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APPENDIX A
person and the executors, administrators or trustees thereof, the heirs and legatees of such person, and any receiver, trustee in bankruptcy or representative of creditors of such person.
Section 11. Amendments and Termination
The Board may amend, alter or discontinue the Plan at any time, provided that (i) no amendment, alteration or discontinuation shall be made which would materially impair the rights of a Participant in respect of any outstanding Award hereunder without such Participant’s prior consent; and (ii) an amendment shall be contingent on approval of the Company’s stockholders to the extent stated by the Committee or required by applicable law or stock exchange listing requirements.
Subject to the above provisions, the Board shall have broad authority to amend the Plan to take in to account changes in applicable securities and tax laws and accounting rules, as well as other developments.
Section 12. Company’s Right to Terminate Retention; Exclusivity
Nothing contained in the Plan shall prevent the Board from adopting other or additional compensation arrangements or modifying existing compensation arrangements for Participants, subject to stockholder approval if such approval is required by applicable statute, rule or regulation; and such arrangements either may be generally applicable or applicable only in specific cases. Neither the adoption of the Plan nor a grant to a Participant of any Award shall confer upon any Participant any right to continued employment or service with the Company.
Section 13. Tax Withholding
The Company shall have the power and the right to deduct or withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy federal, state, local or other applicable taxes (including the Participant’s FICA obligation or other social taxes) required by law to be withheld (collectively, the “Withholding Tax Obligation”) (i) with respect to the vesting of or other lapse of restrictions applicable to an Award, (ii) upon the exercise of a Stock Option or Stock Appreciation Right, or (iii) otherwise due in connection with an Award.
At the time of such vesting, lapse, or exercise, the Participant shall pay to the Company any amount that the Company may reasonably determine to be necessary to satisfy the Withholding Tax Obligation. The Committee, in its sole discretion and pursuant to such procedures as it may specify from time to time, may permit the Participant to elect to satisfy the Withholding Tax Obligation, in whole or in part, by (a) paying the Company cash; (b) having the Company withhold shares of Common Stock having a Fair Market Value on the date the tax is to be determined equal to the minimum statutory total tax which could be imposed on the transaction; and/or (c) tendering previously acquired, unencumbered shares of Common Stock having an aggregate Fair Market Value equal to the minimum statutory total tax which could be imposed on the transaction. All such elections shall be irrevocable, made in writing (including by electronic mail), and shall be subject to any restrictions or limitations that the Committee, in its sole discretion, deems appropriate.
If the Participant fails to make an election with respect to the method by which the Withholding Tax Obligation shall be satisfied or fails to pay the Withholding Tax Obligation, in whole or in part, by means of the elected method, the Company may cause the Withholding Tax Obligation to be satisfied by the Company withholding shares of Common Stock otherwise deliverable in connection with the Award that have a Fair Market Value on the date the tax is to be determined equal to the minimum statutory total tax that could be imposed on the transaction.
Section 14. Choice of Law
The Plan and all Awards made and actions taken thereunder shall be governed by and construed in accordance with the laws of the State of Delaware.
Section 15. Governmental and Other Regulations and Restrictions
(a) In General. The issuance by the Company of any shares of Common Stock pursuant to the Plan shall be subject to all applicable laws, rules and regulations and to such approvals by governmental agencies as may be required.
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2024 PROXY STATEMENT |
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APPENDIX A
Company reserves the right to amend the Plan or any Award granted under the Plan, by action of the Committee, without the consent of any affected Participant, to the extent deemed necessary or appropriate for purposes of maintaining compliance with Section 409A and the regulations promulgated thereunder. Notwithstanding the foregoing, neither the Company nor the Committee shall have any obligation to take any action to prevent the assessment of any excise tax or penalty on any Participant under Section 409A and neither the Company nor the Committee will have any liability to any Participant for such tax or penalty.
Section 18. Dividend Equivalents
For any Restricted Stock Units granted under the Plan, the Committee shall have the discretion, upon the Date of Grant or thereafter, to provide for the payment of dividend equivalents to the Participant in connection with such Award or to establish a Dividend Equivalent Account with respect to the Award, and the applicable Award Agreement or an amendment thereto shall confirm the terms of such arrangement. For purposes of payment of dividend equivalents or settlement of any Dividend Equivalent Account, the amount to be paid or otherwise settled (if expressed in cash) shall be rounded to the nearest cent ($0.01). If a Dividend Equivalent Account is established, the following terms shall apply:
(i) Dividend Equivalent Accounts shall be subject to such terms and conditions as the Committee shall determine and as shall be set forth in the applicable Award Agreement. Such terms and conditions may include, without limitation, for the Participant’s Account to be credited as of the record date of each cash dividend on the Common Stock with an amount (expressed either in cash or shares of Common Stock of equivalent Fair Market Value) equal to the cash dividends which would be paid with respect to the number of shares of Common Stock then covered by the related Award if such shares of Common Stock had been owned of record by the Participant on such record date.
(ii) Dividend Equivalent Accounts shall be established and maintained only on the books and records of the Company and no assets or funds of the Company shall be set aside, placed in trust, removed from the claims of the Company’s general creditors, or otherwise made available until such amounts are actually payable as provided hereunder.
(iii) Dividend equivalents and amounts credited to a Dividend Equivalent Account with respect to any Performance Award or Restricted Stock Unit shall be distributed only when, and to the extent that, the underlying Award is earned.
(iv) Notwithstanding the foregoing, the right to any dividends or dividend equivalents declared and paid on the number of shares underlying the Award may not be contingent, directly or indirectly, on the exercise of the Award, and any Award providing a right to dividend equivalents must comply with or qualify for an exemption from Section 409A.
Section 19. Cancellation and Rescission of Awards
The Committee or the Board of Directors may cancel, rescind, suspend or otherwise limit or restrict any unexpired Award at any time if a Participant engages in “Detrimental Activity.”
Section 20. Certain Reduction of Parachute Payments
The benefits that a Participant may be entitled to receive under this Plan and other benefits that a Participant is entitled to receive under other plans, agreements and arrangements (which, together with the benefits provided under this Plan, are referred to as “Payments”), may constitute Parachute Payments that are subject to Code Sections 280G and 4999. As provided in this Section 20, the Parachute Payments will be reduced pursuant to this Section 20 if, and only to the extent that, a reduction will allow a Participant to receive a greater Net After Tax Amount than a Participant would receive absent a reduction.
The Accounting Firm will first determine the amount of any Parachute Payments that are payable to a Participant. The Accounting Firm also will determine the Net After Tax Amount attributable to the Participant’s total Parachute Payments.
The Accounting Firm will next determine the largest amount of Payments that may be made to the Participant without subjecting the Participant to tax under Code Section 4999 (the “Capped Payments”). Thereafter, the Accounting Firm will determine the Net After Tax Amount attributable to the Capped Payments.
|
|
|
|
|
|
|
|
|
|
|
|
|
2024 PROXY STATEMENT |
|
|
|
A-15 |
Pay vs Performance Disclosure - USD ($)
|
4 Months Ended |
8 Months Ended |
12 Months Ended |
Apr. 30, 2020 |
Dec. 31, 2020 |
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
Pay vs Performance Disclosure |
|
|
|
|
|
|
Pay vs Performance Disclosure, Table |
|
|
As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(v) of Regulation S -K, we are providing the following information about the relationship between executive Compensation Actually Paid (“CAP”) to our named executive officers (“NEOs”) and the Company’s financial performance. The Company does not use CAP as a basis for making compensation decisions, nor does it use the performance measures defined by the SEC for the Pay versus Performance table to measure performance for incentive plan purposes. For further information concerning the Company’s variable philosophy and how the Company aligns executive compensation with the Company’s performance, refer to “Executive Compensation Matters – Compensation Discussion and Analysis.” Pay Versus Performance Table
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Summary Compensation Table Total for CEO & Former CEO (1) |
|
|
Compensation Actually Paid (“CAP”) to CEO & Former CEO (3) |
|
|
|
|
|
|
|
|
Value of Initial Fixed $100 Investment Based On: |
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Shareholder Return (4) |
|
|
Peer Group Total Shareholder Return (4) |
|
|
|
|
|
Adjusted EBITDA (in millions) (5) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023 |
|
$ |
6,535,630 |
|
|
|
— |
|
|
$ |
2,603,992 |
|
|
|
— |
|
|
$ |
1,706,156 |
|
|
$ |
492,584 |
|
|
$ |
62 |
|
|
$ |
213 |
|
|
$ |
(362.7 |
) |
|
$ |
|
) |
|
|
|
|
|
|
|
|
|
|
|
2022 |
|
$ |
5,687,163 |
|
|
|
— |
|
|
$ |
(7,091,673 |
) |
|
|
— |
|
|
$ |
1,636,419 |
|
|
$ |
(1,319,015 |
) |
|
$ |
86 |
|
|
$ |
160 |
|
|
$ |
(121.70 |
) |
|
$ |
|
) |
|
|
|
|
|
|
|
|
|
|
|
2021 |
|
$ |
8,574,250 |
|
|
|
— |
|
|
$ |
15,609,540 |
|
|
|
— |
|
|
$ |
3,081,939 |
|
|
$ |
5,899,487 |
|
|
$ |
162 |
|
|
$ |
227 |
|
|
$ |
322.10 |
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
2020 |
|
$ |
5,917,360 |
|
|
$ |
849,757 |
|
|
$ |
8,175,388 |
|
|
$ |
(5,271,672 |
) |
|
$ |
1,248,601 |
|
|
$ |
616,092 |
|
|
$ |
121 |
|
|
$ |
240 |
|
|
$ |
(149.60 |
) |
|
$ |
27.80 |
|
(1) |
Dr. Jeffrey Graves, who joined the Company in May 2020, was the Company’s principal executive officer (“CEO”) for 2020, 2021, 2022 and 2023. Mr. Vyomesh Joshi, who retired in May 2020, was the Company’s former principal executive officer (“Former CEO”) for 2020. |
(2) |
The names of each of the NEOs included for purposes of calculating the average amounts in each applicable year are as follows: (i) for 2023, Michael Turner, Andrew Johnson, Menno Ellis, Reji Puthenveetil, Jeffrey Creech, and Phyllis Nordstrom; (ii) for 2022, Michael Turner, Andrew Johnson, Menno Ellis, Reji Puthenveetil, Jagtar Narula, and Wayne Pensky; (iii) for 2021, Andrew Johnson, Menno Ellis, Reji Puthenveetil, and Jagtar Narula; and (iv) for 2020, Andrew Johnson, Menno Ellis, Reji Puthenveetil, Jagtar Narula, Wayne Pensky, Todd Booth, Philip Schultz, and Herbert Koeck. |
(3) |
SEC rules require certain adjustments be made to the Summary Compensation Table totals to determine CAP as reported herein. The dollar amounts do not reflect the actual amount of compensation earned by or paid to the applicable NEO without restriction during the applicable year but rather are a valuation calculated under applicable SEC rules. |
|
For purposes of the CAP calculation, there was no actuarial change in pension value or pension related adjustments to report. In addition, for purposes of the equity award adjustments shown below, there are no dividends or interest accrued to report. |
(4) |
TSR is determined based on the value of an initial fixed investment of $100. The peer group TSR represents TSR of the S&P SmallCap 600 Information Technology Index, which is the peer group used by the Company for purposes of Item 201(e) of Regulation S-K. |
(5) |
Adjusted EBITDA is the financial measure from the tabular list of 2023 Most Important Measures shown that, in the Company’s assessment, represents for 2023 the most important performance measure used to link compensation actually paid to our CEO and other NEOs to the Company’s performance. The Company selected this measure as the most important because adjusted EBITDA accounted for 50% of target annual bonus award opportunities for our NEOs in 2023. Adjusted EBITDA is defined on page 34 and is a non-GAAP financial measure. |
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add Equity Award Adjustments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Summary Compensation Table (SCT) |
|
|
Subtract Grant Date Fair Value of Awards as Reported in SCT for Covered Year |
|
|
Add Covered Year-End Value of Awards Granted in Covered Year and |
|
|
|
|
|
and Vested in the Covered |
|
|
to Prior Year-End) of Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
2023 |
|
CEO |
|
$ |
6,535,630 |
|
|
$ |
(5,268,229 |
) |
|
$ |
2,094,393 |
|
|
$ |
(1,114,020 |
) |
|
$ |
— |
|
|
$ |
356,218 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
Other NEOs |
|
$ |
1,706,156 |
|
|
$ |
(1,300,976 |
) |
|
$ |
532,787 |
|
|
$ |
(273,623 |
) |
|
$ |
— |
|
|
$ |
(65,805 |
) |
|
$ |
(105,956 |
) |
|
|
|
|
|
|
|
|
|
2022 |
|
CEO |
|
$ |
5,687,163 |
|
|
$ |
(4,765,861 |
) |
|
$ |
1,882,109 |
|
|
$ |
(7,695,443 |
) |
|
$ |
— |
|
|
$ |
(2,199,640 |
) |
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
Other NEOs |
|
$ |
1,636,419 |
|
|
$ |
(1,269,985 |
) |
|
$ |
456,106 |
|
|
$ |
(1,221,213 |
) |
|
$ |
14,940 |
|
|
$ |
(116,787 |
) |
|
$ |
(818,495 |
) |
|
|
|
|
|
|
|
|
|
2021 |
|
CEO |
|
$ |
8,574,250 |
|
|
$ |
(6,378,719 |
) |
|
$ |
5,693,472 |
|
|
$ |
5,445,859 |
|
|
$ |
— |
|
|
$ |
2,274,678 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
Other NEOs |
|
$ |
3,081,939 |
|
|
$ |
(2,302,472 |
) |
|
$ |
2,022,950 |
|
|
$ |
1,973,281 |
|
|
$ |
— |
|
|
$ |
1,224,538 |
|
|
$ |
(100,749 |
) |
|
|
|
|
|
|
|
|
|
2020 |
|
CEO |
|
$ |
5,917,360 |
|
|
$ |
(4,928,697 |
) |
|
$ |
6,616,383 |
|
|
$ |
— |
|
|
$ |
570,343 |
|
|
$ |
— |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
Former CEO |
|
$ |
849,757 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
94,849 |
|
|
$ |
— |
|
|
$ |
(6,858 |
) |
|
$ |
(6,209,420 |
) |
|
|
|
|
|
|
|
|
|
|
|
Other NEOs |
|
$ |
1,248,601 |
|
|
$ |
(844,436 |
) |
|
$ |
772,676 |
|
|
$ |
60,044 |
|
|
$ |
28,603 |
|
|
$ |
(7,240 |
) |
|
$ |
(642,155 |
) |
|
|
|
|
Company Selected Measure Name |
|
|
Adjusted EBITDA
|
|
|
|
Named Executive Officers, Footnote |
|
|
The names of each of the NEOs included for purposes of calculating the average amounts in each applicable year are as follows: (i) for 2023, Michael Turner, Andrew Johnson, Menno Ellis, Reji Puthenveetil, Jeffrey Creech, and Phyllis Nordstrom; (ii) for 2022, Michael Turner, Andrew Johnson, Menno Ellis, Reji Puthenveetil, Jagtar Narula, and Wayne Pensky; (iii) for 2021, Andrew Johnson, Menno Ellis, Reji Puthenveetil, and Jagtar Narula; and (iv) for 2020, Andrew Johnson, Menno Ellis, Reji Puthenveetil, Jagtar Narula, Wayne Pensky, Todd Booth, Philip Schultz, and Herbert Koeck.
|
|
|
|
Peer Group Issuers, Footnote |
|
|
TSR is determined based on the value of an initial fixed investment of $100. The peer group TSR represents TSR of the S&P SmallCap 600 Information Technology Index, which is the peer group used by the Company for purposes of Item 201(e) of Regulation S-K.
|
|
|
|
Adjustment To PEO Compensation, Footnote |
|
|
(3) |
SEC rules require certain adjustments be made to the Summary Compensation Table totals to determine CAP as reported herein. The dollar amounts do not reflect the actual amount of compensation earned by or paid to the applicable NEO without restriction during the applicable year but rather are a valuation calculated under applicable SEC rules. |
|
For purposes of the CAP calculation, there was no actuarial change in pension value or pension related adjustments to report. In addition, for purposes of the equity award adjustments shown below, there are no dividends or interest accrued to report. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add Equity Award Adjustments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Summary Compensation Table (SCT) |
|
|
Subtract Grant Date Fair Value of Awards as Reported in SCT for Covered Year |
|
|
Add Covered Year-End Value of Awards Granted in Covered Year and |
|
|
|
|
|
and Vested in the Covered |
|
|
to Prior Year-End) of Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
2023 |
|
CEO |
|
$ |
6,535,630 |
|
|
$ |
(5,268,229 |
) |
|
$ |
2,094,393 |
|
|
$ |
(1,114,020 |
) |
|
$ |
— |
|
|
$ |
356,218 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
Other NEOs |
|
$ |
1,706,156 |
|
|
$ |
(1,300,976 |
) |
|
$ |
532,787 |
|
|
$ |
(273,623 |
) |
|
$ |
— |
|
|
$ |
(65,805 |
) |
|
$ |
(105,956 |
) |
|
|
|
|
|
|
|
|
|
2022 |
|
CEO |
|
$ |
5,687,163 |
|
|
$ |
(4,765,861 |
) |
|
$ |
1,882,109 |
|
|
$ |
(7,695,443 |
) |
|
$ |
— |
|
|
$ |
(2,199,640 |
) |
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
Other NEOs |
|
$ |
1,636,419 |
|
|
$ |
(1,269,985 |
) |
|
$ |
456,106 |
|
|
$ |
(1,221,213 |
) |
|
$ |
14,940 |
|
|
$ |
(116,787 |
) |
|
$ |
(818,495 |
) |
|
|
|
|
|
|
|
|
|
2021 |
|
CEO |
|
$ |
8,574,250 |
|
|
$ |
(6,378,719 |
) |
|
$ |
5,693,472 |
|
|
$ |
5,445,859 |
|
|
$ |
— |
|
|
$ |
2,274,678 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
Other NEOs |
|
$ |
3,081,939 |
|
|
$ |
(2,302,472 |
) |
|
$ |
2,022,950 |
|
|
$ |
1,973,281 |
|
|
$ |
— |
|
|
$ |
1,224,538 |
|
|
$ |
(100,749 |
) |
|
|
|
|
|
|
|
|
|
2020 |
|
CEO |
|
$ |
5,917,360 |
|
|
$ |
(4,928,697 |
) |
|
$ |
6,616,383 |
|
|
$ |
— |
|
|
$ |
570,343 |
|
|
$ |
— |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
Former CEO |
|
$ |
849,757 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
94,849 |
|
|
$ |
— |
|
|
$ |
(6,858 |
) |
|
$ |
(6,209,420 |
) |
|
|
|
|
|
|
|
|
|
|
|
Other NEOs |
|
$ |
1,248,601 |
|
|
$ |
(844,436 |
) |
|
$ |
772,676 |
|
|
$ |
60,044 |
|
|
$ |
28,603 |
|
|
$ |
(7,240 |
) |
|
$ |
(642,155 |
) |
|
|
|
|
Non-PEO NEO Average Total Compensation Amount |
|
|
$ 1,706,156
|
$ 1,636,419
|
$ 3,081,939
|
$ 1,248,601
|
Non-PEO NEO Average Compensation Actually Paid Amount |
|
|
$ 492,584
|
(1,319,015)
|
5,899,487
|
616,092
|
Adjustment to Non-PEO NEO Compensation Footnote |
|
|
(3) |
SEC rules require certain adjustments be made to the Summary Compensation Table totals to determine CAP as reported herein. The dollar amounts do not reflect the actual amount of compensation earned by or paid to the applicable NEO without restriction during the applicable year but rather are a valuation calculated under applicable SEC rules. |
|
For purposes of the CAP calculation, there was no actuarial change in pension value or pension related adjustments to report. In addition, for purposes of the equity award adjustments shown below, there are no dividends or interest accrued to report. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add Equity Award Adjustments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Summary Compensation Table (SCT) |
|
|
Subtract Grant Date Fair Value of Awards as Reported in SCT for Covered Year |
|
|
Add Covered Year-End Value of Awards Granted in Covered Year and |
|
|
|
|
|
and Vested in the Covered |
|
|
to Prior Year-End) of Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
2023 |
|
CEO |
|
$ |
6,535,630 |
|
|
$ |
(5,268,229 |
) |
|
$ |
2,094,393 |
|
|
$ |
(1,114,020 |
) |
|
$ |
— |
|
|
$ |
356,218 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
Other NEOs |
|
$ |
1,706,156 |
|
|
$ |
(1,300,976 |
) |
|
$ |
532,787 |
|
|
$ |
(273,623 |
) |
|
$ |
— |
|
|
$ |
(65,805 |
) |
|
$ |
(105,956 |
) |
|
|
|
|
|
|
|
|
|
2022 |
|
CEO |
|
$ |
5,687,163 |
|
|
$ |
(4,765,861 |
) |
|
$ |
1,882,109 |
|
|
$ |
(7,695,443 |
) |
|
$ |
— |
|
|
$ |
(2,199,640 |
) |
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
Other NEOs |
|
$ |
1,636,419 |
|
|
$ |
(1,269,985 |
) |
|
$ |
456,106 |
|
|
$ |
(1,221,213 |
) |
|
$ |
14,940 |
|
|
$ |
(116,787 |
) |
|
$ |
(818,495 |
) |
|
|
|
|
|
|
|
|
|
2021 |
|
CEO |
|
$ |
8,574,250 |
|
|
$ |
(6,378,719 |
) |
|
$ |
5,693,472 |
|
|
$ |
5,445,859 |
|
|
$ |
— |
|
|
$ |
2,274,678 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
Other NEOs |
|
$ |
3,081,939 |
|
|
$ |
(2,302,472 |
) |
|
$ |
2,022,950 |
|
|
$ |
1,973,281 |
|
|
$ |
— |
|
|
$ |
1,224,538 |
|
|
$ |
(100,749 |
) |
|
|
|
|
|
|
|
|
|
2020 |
|
CEO |
|
$ |
5,917,360 |
|
|
$ |
(4,928,697 |
) |
|
$ |
6,616,383 |
|
|
$ |
— |
|
|
$ |
570,343 |
|
|
$ |
— |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
Former CEO |
|
$ |
849,757 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
94,849 |
|
|
$ |
— |
|
|
$ |
(6,858 |
) |
|
$ |
(6,209,420 |
) |
|
|
|
|
|
|
|
|
|
|
|
Other NEOs |
|
$ |
1,248,601 |
|
|
$ |
(844,436 |
) |
|
$ |
772,676 |
|
|
$ |
60,044 |
|
|
$ |
28,603 |
|
|
$ |
(7,240 |
) |
|
$ |
(642,155 |
) |
|
|
|
|
Compensation Actually Paid vs. Total Shareholder Return |
|
|
|
|
|
|
Compensation Actually Paid vs. Net Income |
|
|
|
|
|
|
Compensation Actually Paid vs. Company Selected Measure |
|
|
|
|
|
|
Total Shareholder Return Vs Peer Group |
|
|
|
|
|
|
Tabular List, Table |
|
|
Financial Performance Measures As described in greater detail in “Executive Compensation Matters – Compensation Discussion and Analysis,” the Company’s executive compensation program reflects a variable philosophy. The metrics that the Company uses for both our annual and long-term incentive awards are selected based on an objective of incentivizing our NEOs to increase the value of our enterprise for our stockholders. The most important financial performance measures used by the Company to link executive compensation actually paid to the Company’s NEOs for the most recently completed fiscal year to the Company’s performance are as follows:
• |
|
Relative TSR (the Company’s TSR as compared to the 3DPRNT Index) |
|
|
|
|
Total Shareholder Return Amount |
|
|
$ 62
|
86
|
162
|
121
|
Peer Group Total Shareholder Return Amount |
|
|
213
|
160
|
227
|
240
|
Net Income (Loss) |
|
|
$ (362,700,000)
|
$ (121,700,000)
|
$ 322,100,000
|
$ (149,600,000)
|
Company Selected Measure Amount |
|
|
(26,300,000)
|
(5,800,000)
|
56,100,000
|
27,800,000
|
Measure:: 1 |
|
|
|
|
|
|
Pay vs Performance Disclosure |
|
|
|
|
|
|
Name |
|
|
Revenue
|
|
|
|
Measure:: 2 |
|
|
|
|
|
|
Pay vs Performance Disclosure |
|
|
|
|
|
|
Name |
|
|
Adjusted EBITDA
|
|
|
|
Non-GAAP Measure Description |
|
|
Adjusted EBITDA is defined on page 34 and is a non-GAAP financial measure.
|
|
|
|
Measure:: 3 |
|
|
|
|
|
|
Pay vs Performance Disclosure |
|
|
|
|
|
|
Name |
|
|
Relative TSR (the Company’s TSR as compared to the 3DPRNT Index)
|
|
|
|
Dr. Jeffrey Graves [Member] |
|
|
|
|
|
|
Pay vs Performance Disclosure |
|
|
|
|
|
|
PEO Total Compensation Amount |
|
|
$ 6,535,630
|
$ 5,687,163
|
$ 8,574,250
|
$ 5,917,360
|
PEO Actually Paid Compensation Amount |
|
|
$ 2,603,992
|
$ (7,091,673)
|
$ 15,609,540
|
8,175,388
|
PEO Name |
|
Dr. Jeffrey Graves
|
Dr. Jeffrey Graves
|
Dr. Jeffrey Graves
|
Dr. Jeffrey Graves
|
|
Mr. Vyomesh Joshi [Member] |
|
|
|
|
|
|
Pay vs Performance Disclosure |
|
|
|
|
|
|
PEO Total Compensation Amount |
|
|
$ 0
|
$ 0
|
$ 0
|
849,757
|
PEO Actually Paid Compensation Amount |
|
|
0
|
0
|
0
|
(5,271,672)
|
PEO Name |
Mr. Vyomesh Joshi
|
|
|
|
|
|
PEO | Dr. Jeffrey Graves [Member] | Grant Date Fair Value of Awards as Reported in SCT for Covered Year [Member] |
|
|
|
|
|
|
Pay vs Performance Disclosure |
|
|
|
|
|
|
Adjustment to Compensation, Amount |
|
|
(5,268,229)
|
(4,765,861)
|
(6,378,719)
|
(4,928,697)
|
PEO | Dr. Jeffrey Graves [Member] | Covered Year End Value of Awards Granted in Covered Year and Outstanding and Unvested as of Covered Year End [Member] |
|
|
|
|
|
|
Pay vs Performance Disclosure |
|
|
|
|
|
|
Adjustment to Compensation, Amount |
|
|
2,094,393
|
1,882,109
|
5,693,472
|
6,616,383
|
PEO | Dr. Jeffrey Graves [Member] | Change in Value as of Covered Year End (as Compared to Prior Year End) of Equity Awards Granted Prior to Covered Year and Outstanding and Unvested as of Covered Year End [Member] |
|
|
|
|
|
|
Pay vs Performance Disclosure |
|
|
|
|
|
|
Adjustment to Compensation, Amount |
|
|
(1,114,020)
|
(7,695,443)
|
5,445,859
|
0
|
PEO | Dr. Jeffrey Graves [Member] | Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year [Member] |
|
|
|
|
|
|
Pay vs Performance Disclosure |
|
|
|
|
|
|
Adjustment to Compensation, Amount |
|
|
0
|
0
|
0
|
570,343
|
PEO | Dr. Jeffrey Graves [Member] | Change in Value as of Vesting Date (as Compared to Prior Year End) of Equity Awards Granted Prior to Covered Year that Vested During Covered Year [Member] |
|
|
|
|
|
|
Pay vs Performance Disclosure |
|
|
|
|
|
|
Adjustment to Compensation, Amount |
|
|
356,218
|
(2,199,640)
|
2,274,678
|
0
|
PEO | Dr. Jeffrey Graves [Member] | Prior Year End Value of Equity Awards that Failed to Meet Vesting Conditions During Covered Year [Member] |
|
|
|
|
|
|
Pay vs Performance Disclosure |
|
|
|
|
|
|
Adjustment to Compensation, Amount |
|
|
0
|
0
|
0
|
0
|
PEO | Mr. Vyomesh Joshi [Member] | Grant Date Fair Value of Awards as Reported in SCT for Covered Year [Member] |
|
|
|
|
|
|
Pay vs Performance Disclosure |
|
|
|
|
|
|
Adjustment to Compensation, Amount |
|
|
|
|
|
0
|
PEO | Mr. Vyomesh Joshi [Member] | Covered Year End Value of Awards Granted in Covered Year and Outstanding and Unvested as of Covered Year End [Member] |
|
|
|
|
|
|
Pay vs Performance Disclosure |
|
|
|
|
|
|
Adjustment to Compensation, Amount |
|
|
|
|
|
0
|
PEO | Mr. Vyomesh Joshi [Member] | Change in Value as of Covered Year End (as Compared to Prior Year End) of Equity Awards Granted Prior to Covered Year and Outstanding and Unvested as of Covered Year End [Member] |
|
|
|
|
|
|
Pay vs Performance Disclosure |
|
|
|
|
|
|
Adjustment to Compensation, Amount |
|
|
|
|
|
94,849
|
PEO | Mr. Vyomesh Joshi [Member] | Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year [Member] |
|
|
|
|
|
|
Pay vs Performance Disclosure |
|
|
|
|
|
|
Adjustment to Compensation, Amount |
|
|
|
|
|
0
|
PEO | Mr. Vyomesh Joshi [Member] | Change in Value as of Vesting Date (as Compared to Prior Year End) of Equity Awards Granted Prior to Covered Year that Vested During Covered Year [Member] |
|
|
|
|
|
|
Pay vs Performance Disclosure |
|
|
|
|
|
|
Adjustment to Compensation, Amount |
|
|
|
|
|
(6,858)
|
PEO | Mr. Vyomesh Joshi [Member] | Prior Year End Value of Equity Awards that Failed to Meet Vesting Conditions During Covered Year [Member] |
|
|
|
|
|
|
Pay vs Performance Disclosure |
|
|
|
|
|
|
Adjustment to Compensation, Amount |
|
|
|
|
|
(6,209,420)
|
Non-PEO NEO | Grant Date Fair Value of Awards as Reported in SCT for Covered Year [Member] |
|
|
|
|
|
|
Pay vs Performance Disclosure |
|
|
|
|
|
|
Adjustment to Compensation, Amount |
|
|
(1,300,976)
|
(1,269,985)
|
(2,302,472)
|
(844,436)
|
Non-PEO NEO | Covered Year End Value of Awards Granted in Covered Year and Outstanding and Unvested as of Covered Year End [Member] |
|
|
|
|
|
|
Pay vs Performance Disclosure |
|
|
|
|
|
|
Adjustment to Compensation, Amount |
|
|
532,787
|
456,106
|
2,022,950
|
772,676
|
Non-PEO NEO | Change in Value as of Covered Year End (as Compared to Prior Year End) of Equity Awards Granted Prior to Covered Year and Outstanding and Unvested as of Covered Year End [Member] |
|
|
|
|
|
|
Pay vs Performance Disclosure |
|
|
|
|
|
|
Adjustment to Compensation, Amount |
|
|
(273,623)
|
(1,221,213)
|
1,973,281
|
60,044
|
Non-PEO NEO | Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year [Member] |
|
|
|
|
|
|
Pay vs Performance Disclosure |
|
|
|
|
|
|
Adjustment to Compensation, Amount |
|
|
0
|
14,940
|
0
|
28,603
|
Non-PEO NEO | Change in Value as of Vesting Date (as Compared to Prior Year End) of Equity Awards Granted Prior to Covered Year that Vested During Covered Year [Member] |
|
|
|
|
|
|
Pay vs Performance Disclosure |
|
|
|
|
|
|
Adjustment to Compensation, Amount |
|
|
(65,805)
|
(116,787)
|
1,224,538
|
(7,240)
|
Non-PEO NEO | Prior Year End Value of Equity Awards that Failed to Meet Vesting Conditions During Covered Year [Member] |
|
|
|
|
|
|
Pay vs Performance Disclosure |
|
|
|
|
|
|
Adjustment to Compensation, Amount |
|
|
$ (105,956)
|
$ (818,495)
|
$ (100,749)
|
$ (642,155)
|