Company: ALGN
Filing Date: 2025-04-08
Form Type: DEF 14A
Source: 0001097149-25-000021
Chunk: 93

Company: ALIGN TECHNOLOGY INC
Filing Date: 2025-04-08
Form: DEF 14A
Chunk 93
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 objective is to compensate our employees generally, including our executives and non- employee directors in a manner that attracts and retains the caliber of individuals needed to manage, staff and supervise our business in a competitive industry. Our employees are our most valuable asset, many with skills and experiences highly sought after by technology companies against whom we compete for talent. Accordingly, it is imperative to our future success that we provide our employees with compensation packages that are not only competitive but also that reward personal performance, help meet our retention needs and incentivize them to manage our business as owners, thereby more closely aligning their interests with those of our stockholders.

To achieve these objectives, we historically have provided a meaningful portion of our key employees’ total compensation in the form of equity awards through our equity incentive programs, the value of which depends on our stock performance. Our goal is for equity awards to continue to represent a meaningful portion of our key employees’ total compensation. Awards generally are subject to vesting over an extended period of time subject to continued service with us and we believe this approach helps to encourage long-term focus and commitment from our employees and provides Align with an important retention tool for key employees. In addition, we believe we need to continue to use equity awards to help attract, retain and motivate employees and other service providers to continue to grow our business and ultimately increase stockholder value as we compete for a limited pool of talented people and hiring and retaining such talent.

Reserving Shares Available for Granting Equity Awards is Important for Meeting our Future Compensation Needs

A significant portion of the compensation for our executive officers is in the form of equity compensation. In addition, approximately 5,406 of our regular, full-time employees hold outstanding equity awards as of February 28, 2025. We expect to exhaust the existing share reserve of the Incentive Plan as early as 2026 and believe it is prudent to replenish the share reserve at this time. Without the additional shares, we likely would need to make changes to our long-term incentive program in order to conserve the remaining share reserve, which would impact the mix of compensation elements used. See “Executive Compensation—Compensation Discussion and Analysis.” In order to enable us to continue offering meaningful equity-based incentives, our Board believes it is both necessary and appropriate to increase the number of shares available for these purposes. If the Incentive Plan Amendment is approved, we expect that the share reserve increase will allow us to continue to grant stock-based compensation at levels we deem appropriate for approximately the next 3 years (as discussed