Company: ALGN
Filing Date: 2025-04-08
Form Type: DEF 14A
Source: 0001097149-25-000021
Chunk: 41

Company: ALIGN TECHNOLOGY INC
Filing Date: 2025-04-08
Form: DEF 14A
Chunk 41
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-term incentives to encourage strategies and actions in the long-term best interests of the Company and our stockholders; • We set base salaries consistent with each employee’s responsibilities so that they are not motivated to take excessive risks to achieve a reasonable level of financial security; • We set appropriate performance goals that we believe: ◦ are reasonable in light of past performance and market conditions, and 58

◦ encourage success without encouraging excessive risk-taking to achieve short-term results;

• We set annual cash incentive plan performance goals that are Company-wide in order to encourage sound decision-making and performance throughout Align and that are in the best long-term interests of Align and our stockholders as a whole;

• We do not employ an “all-or-nothing” approach. Under our annual cash incentive plan, achievement of performance goals at levels below full target goals reduces only the payout related to that goal, not the other goals;

• We cap the amount executive management can receive under our cash incentive compensation plan at a maximum of 240% of their targets to avoid incentivizing excessive risk-taking; and

• We use a portfolio of equity-based awards for executive management that incentivizes performance over a variety of time periods with respect to several balanced goals. For example:

◦ RSUs retain value even in depressed markets making it less likely employees will take unreasonable risks to get, or keep, their equity awards “in the money;”

◦ Performance-based MSUs measure relative stockholder return over a three-year performance cycle, thereby potentially retaining value even if the price of our common stock decreases in a market downturn, provided that the decrease is not more than 33 percentage points greater than other companies;

◦ The number of shares potentially earned are capped at a maximum of 250% of the number of target shares to limit stockholder dilution; and

• Executive management is subject to material stock ownership guidelines.

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| How We Implement and Manage Our Executive Compensation Program |

In addition to our Board’s role in approving compensation for our CEO, our Compensation and Human Capital Committee, its consultants and executive management contribute to the implementation of the executive compensation program. The table below specifies the responsible parties and their respective roles in determining our NEOs’ compensation:

| Responsible Party                                                                                                                                                                                                                                    |     | Roles and Responsibilities                                                                                                                                                                                                                                                                                                                                                                     |
| Compensation and Human Capital Committee                                                                                                                                                                                                             |     | Sets our overall compensation philosophy, which our Board reviews and approves                                                                                                                                                                                                                                                                                                                 |
|                                                                                                                                                                                                                                                      |     | Reviews and approves our compensation programs; designs