Company: CXDO
Filing Date: 2025-10-20
Form Type: DEF 14A
Source: 0001654954-25-011941
Chunk: 32

Company: Crexendo, Inc.
Filing Date: 2025-10-20
Form: DEF 14A
Chunk 32
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 NEOs with the interests of our stockholders and will incentivize the NEOs to provide stockholder value. The Compensation Committee believes that such grants provide long-term performance-based compensation, help retain executives through the vesting periods, and serve to align management and stockholder interests. In making awards under the Plan, the Compensation Committee considers grant size. Options and restricted stock units vest only to the extent that the NEO remains a company employee through the applicable vesting dates, typically monthly over three years. We believe the three year vesting schedule assists in retaining executives and encourages the NEOs to focus on long-term performance.

We have granted stock options to our NEOs with an exercise price equal to the closing price per share on the date of the grant. We do not grant options with an exercise price below 100% of the trading price of the underlying shares of our common stock on the date of grant. Stock options only have a value to the extent the value of the underlying shares on the exercise date exceeds the exercise price. Accordingly, stock options provide compensation only if the underlying share price increases over the option term and the NEO’s employment continues with us until the vesting date.

In granting stock options and restricted stock units to the NEOs, we also consider the impact of the grant on our financial performance, as determined in accordance with accounting guidance. For share-based equity awards, we record expense in accordance with applicable accounting guidance. The amount of expense we record pursuant to accounting guidance may vary from the corresponding compensation value we use in determining the amount of the awards.

Performance-Based Stock Price Appreciation Awards.We utilize incentive bonuses to reward stock price appreciation performance achievements and have in place target incentive bonuses for certain of our executive officers, payable upon achieving the performance targets set by the Compensation Committee.

During 2024, the Compensation Committee approved a performance-based plan to grant RSUs to Messrs. Korn, Gaylor, and Vincent. These awards are structured to reward performance that directly benefits our shareholders by tying the grant of RSUs to the appreciation of our stock price during a specified performance period. This plan is intended to motivate and retain key executives while aligning their interests with the creation of stockholder value. The performance-based plan is a three-year plan and the Compensation Committee has the right to cancel the plan annually on the anniversary date of the plan. If any of the performance targets are achieved, the RSUs will vest monthly over a three-year term. The share price thresholds must be met or exceeded and maintained for fifteen (15) consecutive trading days during