Company: ALGN
Filing Date: 2025-04-08
Form Type: DEF 14A
Source: 0001097149-25-000021
Chunk: 96

Company: ALIGN TECHNOLOGY INC
Filing Date: 2025-04-08
Form: DEF 14A
Chunk 96
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 look at the rate at which we grant awards under our equity incentive programs (also known as our “burn rate”) by measuring the number of shares subject to equity awards granted in a fiscal year divided by the weighted

<div align='center'>110</div>

average equivalent of shares of common stock outstanding for that fiscal year. For fiscal years 2024, 2023 and 2022, our burn rates for the Incentive Plan were approximately 1.01%, 0.77%, and 0.45%, respectively, resulting in a three-year average burn-rate for the Incentive Plan of approximately 0.74%. We believe this burn rate reflects our judicious and responsible approach to equity grant practices. Despite our stock repurchases during this period, our three-year average burn rate percentage is significantly below the benchmark published by a leading proxy advisory service for our index classification. We believe that our repurchase practices have mitigated dilution attributable to our compensation program while modestly raising our burn rate percentage over what it would have been if we had not repurchased shares. In particular, over the course of fiscal 2022, 2023 and 2024, we have repurchased approximately 5,750,826 shares of our common stock (approximately 8% over the three-year timeframe).

#### Anticipated Forfeitures
We currently forecast granting awards covering approximately 4,990,668 shares over the next three-year period (calculated using a fungible ratio of 1.9 for full value awards in accordance with the terms of the Incentive Plan), which is equal to 6.7% of our common shares outstanding as of February 28, 2025. We also anticipate cancellation or forfeitures of RSUs, PSUs and MSUs covering approximately 815,176 shares over this period (calculated using a fungible ratio of 1.9), based on our historic rates. If our expectation for cancellations is accurate, our net grants (grants less cancellations) over the next three-year period would cover approximately 4,175,492 shares (calculated using a fungible ratio of 1.9), or approximately 5.6% of our common stock outstanding as of February 28, 2025. Accordingly, we expect that the share reserve increase pursuant to the Incentive Plan Amendment will allow us to continue to grant stock-based compensation at levels we deem appropriate for approximately the next 3 years. However, we cannot predict our future equity