Company: CRCT
Filing Date: 2025-04-01
Form Type: PRE 14A
Source: 0001828962-25-000058
Chunk: 45

Company: Cricut, Inc.
Filing Date: 2025-04-01
Form: PRE 14A
Chunk 45
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 a change in control of our company. For more information, see the section titled “Potential Payments Upon Termination or Change in Control” beginning on page 34 of this proxy statement.

In addition, shares of restricted Class B common stock that our named executive officers received in conversion of their incentive unit awards in connection with the corporate reorganization that occurred at the time of our IPO will fully vest if the executive officer’s employment is terminated due to his death or by us due to his disability.

#### Other Compensation Information

#### Accounting Considerations
We take financial reporting implications into consideration in designing compensation plans and arrangements for the members of our executive team, other employees and members of our board of directors. These accounting considerations include Financial Accounting Standards Board Accounting Standards Codification Topic 718, or ASC Topic 718, which is the standard governing the accounting treatment of stock-based compensation awards. That said, we will always decide based on business economics even if such choices result in lower levels for reported accounting metrics. Neither accounting nor tax considerations should trump business economics.

#### Tax Considerations
We have not provided any of our named executive officers with a gross-up or other reimbursement for tax amounts the individual might pay pursuant to Code Sections 280G, 4999 or 409A. Code Sections 280G and 4999 provide that named executive officers, directors who hold significant stockholder interests and certain other service providers could be subject to significant additional taxes if they receive payments or benefits in connection with a change in control of our company that exceeds certain limits, and that we or our successor could lose a deduction on the amounts subject to the additional tax. Code Section 409A also imposes significant taxes on the individual in the event that an executive officer, director or other service provider receives “deferred compensation” that does not meet the requirements of Code Section 409A.

Under Code Section 162(m), we are subject to limits on the deductibility of executive compensation. Deductible compensation is limited to $1 million per year for the chief executive officer and certain of our current and former highly compensated executive officers (collectively “covered employees”). While we cannot predict how the deductibility limit may impact our compensation program in future years, we intend to maintain an approach to executive compensation that strongly links pay to performance. In addition, although we have not adopted a formal policy regarding tax deductibility of compensation paid to our named executive officers, we may consider tax deductibility under Code Section 162(m) as a factor in its compensation decisions.

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