UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________________________
SCHEDULE 14C
Information Statement Pursuant to Section 14(c) of the
Securities Exchange Act of 1934
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Preliminary Information Statement
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Definitive Information Statement
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Meta Platforms, Inc.
(Name of Registrant as Specified In Its Charter)
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1601 Willow Road
Menlo Park, California 94025
NOTICE OF ACTION TAKEN BY WRITTEN CONSENT BY HOLDERS OF
A MAJORITY OF THE AGGREGATE VOTING POWER
OF ALL OUTSTANDING SHARES OF CAPITAL STOCK OF META PLATFORMS,
INC.
To Our Shareholders:
The enclosed information statement (the “Information Statement”) is
being distributed to the holders of record, as of the close of
business on December 12, 2022 (the “Record Date”), of the Class A
common stock and the Class B common stock of Meta Platforms, Inc.
(the “Company” or “Meta”).
The purpose of the Information Statement is to inform you of action
taken by holders of a majority of the voting power of the
outstanding shares of capital stock of the Company to approve an
amendment to the Company’s 2012 Equity Incentive Plan (the “2012
Plan”), to increase the number of shares of the Company’s Class A
common stock available for grant and issuance under the 2012 Plan
by 425,000,000 shares, effective as of March 1, 2023 (the “Plan
Amendment”). On December 12, 2022, the Consenting Shareholders (as
defined below) delivered to the Company a written consent (the
“Written Consent”) to approve the Plan Amendment.
The “Consenting Shareholders” are, collectively, The Mark
Zuckerberg Trust dated July 7, 2006; Chan Zuckerberg Initiative
Foundation; and CZI Holdings, LLC. As of the close of business on
the Record Date, the Consenting Shareholders together owned 599,306
shares of the Company’s Class A common stock and 349,745,790 shares
of the Company’s Class B common stock, respectively, representing
approximately 59% of the voting power of the outstanding shares of
capital stock of the Company, on a combined basis.
The 2012 Plan and the Plan Amendment are attached as Appendix A-1
and Appendix A-2 to this Information Statement, respectively. The
Board of Directors of the Company (the “Board”) unanimously
approved and recommended the Plan Amendment for approval by the
Company’s shareholders, and the Consenting Shareholders approved
the Plan Amendment, in each case, pursuant to the General
Corporation Law of the State of Delaware (the “DGCL”), the
Company's Amended and Restated Certificate of Incorporation (the
“Charter”), and the Company’s Amended and Restated Bylaws (the
“Bylaws”). The Written Consent constitutes the only shareholder
approval required to approve the Plan Amendment under the DGCL, the
Charter, and the Bylaws. The Board is not soliciting your proxy or
consent in connection with the Plan Amendment and no proxies or
consents are being requested from shareholders.
The purpose of this notice and the accompanying Information
Statement is to (1) inform the Company’s shareholders of the action
described above before it takes effect in accordance with Rule
14c-2 promulgated under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), and (2) provide the notice required
under Section 228(e) of the DGCL. In accordance with Rule 14c-2 and
Rule 14a-16 of the Exchange Act, the Plan Amendment will become
effective no earlier than the 40th calendar day after the Notice of
Internet Availability of Information Statement (the “Notice”) is
first made available to our shareholders. The Notice is being
distributed and made available on or about [●], 2022.
THE INFORMATION STATEMENT IS FOR YOUR INFORMATION ONLY. YOU DO NOT
NEED TO DO ANYTHING IN RESPONSE TO THE INFORMATION STATEMENT. THIS
IS NOT A NOTICE OF A MEETING OF SHAREHOLDERS AND NO SHAREHOLDER
MEETING WILL BE HELD TO CONSIDER ANY MATTER DESCRIBED IN THE
INFORMATION STATEMENT. WE ARE NOT ASKING YOU FOR A PROXY AND YOU
ARE REQUESTED NOT TO SEND US A PROXY.
IMPORTANT NOTICE OF INTERNET AVAILABILITY OF INFORMATION STATEMENT:
THE INFORMATION STATEMENT IS AVAILABLE AT
www.materialnotice.com.
Katherine R. Kelly
Vice President, Deputy General Counsel and Secretary
INFORMATION STATEMENT
WE ARE NOT ASKING YOU FOR A PROXY AND
YOU ARE REQUESTED NOT TO SEND US A PROXY.
PURPOSE OF INFORMATION STATEMENT
This Information Statement advises shareholders of Meta Platforms,
Inc. (the “Company,” “Meta,” “we,” “us,” or “our”) of action taken
by holders of a majority of the voting power of the outstanding
shares of capital stock of the Company to amend the 2012 Equity
Incentive Plan (the “2012 Plan”), to increase the number of shares
of the Company’s Class A common stock available for grant and
issuance under the 2012 Plan by 425,000,000 shares (the “Plan
Amendment”). On December 8, 2022, the Board of Directors of the
Company (the “Board”) unanimously approved and recommended the Plan
Amendment for approval by the Company’s shareholders. The record
date for the shareholder approval is December 12, 2022 (the “Record
Date”). On December 12, 2022, the Consenting Shareholders (as
defined below) delivered to the Company a written consent (the
“Written Consent”) approving the Plan Amendment. The “Consenting
Shareholders” are, collectively, The Mark Zuckerberg Trust dated
July 7, 2006; Chan Zuckerberg Initiative Foundation; and CZI
Holdings, LLC. The 2012 Plan and the Plan Amendment are attached as
Appendix A-1 and Appendix A-2 to this Information Statement,
respectively.
The Information Statement is being furnished only to (1) inform the
Company’s shareholders of the action described above before it
takes effect in accordance with Rule 14c-2 promulgated under the
Securities Exchange Act of 1934, as amended, and (2) provide the
notice required under Section 228(e) of the Delaware General
Corporation Law (“DGCL”). The Plan Amendment will become effective
no earlier than the 40th calendar day after the Information
Statement is first distributed and made available to our
shareholders. The Information Statement is being distributed and
made available on or about [●], 2022.
VOTES REQUIRED
Pursuant to the Company’s Amended and Restated Certificate of
Incorporation, holders of the Company’s Class A common stock are
entitled to one vote per share of Class A common stock and holders
of the Company’s Class B common stock are entitled to ten votes per
share of Class B common stock.
Section 228 of the DGCL and Article I, Section 1.10 of the
Company’s Amended and Restated Bylaws (the “Bylaws”) provide that
shareholders of the Company may act by written consent without a
meeting, without prior notice and without a vote, if a consent or
consents in writing, setting forth the actions to be taken, are
signed by shareholders holding a number of outstanding shares
representing not less than the minimum number of votes that would
be necessary to authorize or take such actions at a meeting at
which all shares entitled to vote thereon were present and voted.
Pursuant to Article I, Section 1.7 of the Bylaws, every matter
other than the election of directors, including the Plan Amendment,
is decided by the affirmative vote of a majority of the votes
properly cast for or against such matter.
As of the close of business on the Record Date, 2,255,320,542
shares of the Company’s Class A common stock and 366,876,470 shares
of the Company’s Class B common stock were outstanding. As of the
close of business on the Record Date, the Consenting Shareholders
together owned 599,306 shares of the Company’s Class A common stock
and 349,745,790 shares of the Company’s Class B common stock,
representing approximately 59% of the voting power of the
outstanding shares of capital stock of the Company, on a combined
basis. All of the shares of capital stock of the Company held by
the Consenting Shareholders are beneficially owned by Mark
Zuckerberg. Mr. Zuckerberg is the Company’s Chairman of the Board,
Chief Executive Officer, and controlling shareholder.
On December 12, 2022, the Company received the Written Consent from
the Consenting Shareholders approving the Plan Amendment. Receipt
of the Written Consent from the Consenting Shareholders
representing a majority of the voting power of the outstanding
shares of capital stock of the Company, on a combined basis,
satisfies the requirements of Article I, Section 1.7 of the
Bylaws.
PLAN AMENDMENT
Overview of Action
The Board and the holders of a majority of the voting power of the
outstanding shares of capital stock of the Company have approved
the Plan Amendment to increase the number of shares of our Class A
common stock (“Shares”) reserved for issuance under the 2012 Plan
by 425,000,000 Shares, effective as of March 1, 2023.
Meta seeks to offer competitive compensation to attract and retain
the best people. Meta employees’ total compensation package
generally includes market-competitive salary, bonuses or sales
incentives, and equity offered in the form of Restricted Stock
Units (“RSUs”) at the time of hire and through annual RSU grants.
The Company’s broad-based use of equity has been a key facet of our
people practices and enables our employees to be owners of the
Company and committed to our long-term success. Currently, nearly
all full-time employees are awarded Meta stock.
Meta’s stock price is a key determinant of the number of shares
that the Company needs available for grant under the 2012 Plan to
maintain our ability to grant new awards and encourage long-term
retention and performance of our employees. In light of recent
stock price levels and our ongoing equity compensation needs, the
Board and the Consenting Shareholders approved the Plan Amendment
to enable Meta to continue our practice of granting equity as a
meaningful portion of employee compensation. We believe the Plan
Amendment is a key element of the Board and management team’s
strategy to align our employees’ interests with those of
shareholders and motivate employees to help drive long-term growth
and stockholder value. We also believe that this authorization will
allow the Company to adequately manage its equity grant
requirements and compensation planning for the next two to three
years, although the exact timing is uncertain and dependent on a
variety of factors, including our stock price levels.
Background of the 2012 Plan
The 2012 Plan was adopted by the Board in January 2012, approved by
our shareholders in April 2012, and became effective in May 2012 in
connection with our initial public offering. The 2012 Plan was
amended and restated on June 20, 2016 and further amended on
February 13, 2018. The 2012 Plan provides for the grant of awards
to eligible employees, directors, consultants, independent
contractors, and advisors in the form of RSUs, stock options,
restricted stock awards (“RSAs”), stock bonuses, stock appreciation
rights (“SARs”) and performance shares (each, an
award).
Summary of the 2012 Plan
The principal terms of the 2012 Plan, as amended by the Plan
Amendment, are summarized below. This summary is not a complete
description of the 2012 Plan, and it is qualified in its entirety
by reference to the complete text of the 2012 Plan document. The
2012 Plan and the Plan Amendment are attached as Appendix A-1 and
Appendix A-2 to this Information Statement,
respectively.
Shares Available for Issuance
We adopted the 2012 Plan, which became effective in May 2012, as
the successor to our 2005 Stock Plan. We initially reserved
25,000,000 Shares to be issued under the 2012 Plan (plus certain
other Shares related to awards which are forfeited, repurchased or
used to satisfy the exercise price or tax withholding on an award).
The number of Shares reserved for grant and issuance under the 2012
Plan increases automatically on January 1 of each of the calendar
years during the term of the 2012 Plan, which will continue through
and including April 2026, by a number of Shares equal to the lesser
of (i) 2.5% of the sum of the total outstanding Class A common
stock as of the immediately preceding December 31st or (ii) a
number of Shares determined by the Board (the “Evergreen Feature”).
On January 1, 2020, 2021 and 2022, 60,188,143, 16,000,000, and
20,000,000 Shares, respectively, were added to the shares reserved
under the 2012 Plan pursuant to the Evergreen Feature. In addition,
the Board approved the addition of a number of Shares equal to 2.5%
of the sum of the total outstanding Class A common stock as of
December 31, 2022 to the shares reserved under the 2012 Plan
pursuant to the Evergreen Feature on January 1, 2023. As noted
above, the Plan Amendment increases the number of Shares available
under the 2012 Plan by 425,000,000, separate and apart from the
Evergreen Feature.
In addition, the following Shares are available for grant and
issuance under the 2012 Plan: (i) Shares that are subject to
issuance upon exercise of a stock option or SAR granted under the
2012 Plan but which cease to be
subject to the stock option or SAR for any reason other than
exercise of the stock option or SAR; (ii) Shares that are subject
to awards granted under the 2012 Plan that are forfeited or are
repurchased by us at the original issue price; (iii) Shares that
are subject to awards granted under the 2012 Plan that otherwise
terminate without such Shares being issued; and (iv) Shares that
are surrendered pursuant to an exchange program. To the extent an
award is paid out in cash rather than Shares, such cash payment
will not reduce the number of Shares available for issuance under
the 2012 Plan. Shares used or withheld to pay the exercise price of
an award or to satisfy the tax withholding obligations related to
an award will become available for future grant or sale under the
2012 Plan. The number of Shares available for issuance is not
reduced with respect to awards granted or shares issued by us in
assumption of, or in substitution or exchange for, awards
previously granted, or the right or obligation to make future
awards, by a company acquired by us or one of our affiliates or
with which we or one of our affiliates combines.
The 2012 Plan authorizes the award of RSUs, stock options, RSAs,
stock bonuses, SARs and performance shares (each as more fully
described below). No person will be eligible to receive more than
2,500,000 Shares in any calendar year under the 2012 Plan other
than a new employee of ours, who will be eligible to receive no
more than 5,000,000 Shares under the 2012 Plan in the calendar year
in which the employee commences employment. Any awards in Shares or
cash that are made outside of the 2012 Plan and permitted by
applicable listing requirements are not subject to these
limitations.
Administration
The 2012 Plan is administered by our compensation, nominating &
governance committee (the “Administrator”), all of the members of
which are outside directors as defined under applicable federal tax
laws, or by the Board acting in place of our compensation,
nominating & governance committee. The Administrator has the
authority to construe and interpret the 2012 Plan, select
participants and grant awards, and make all other determinations
necessary or advisable for the administration of the 2012 Plan. The
Administrator may delegate its authority under the 2012 Plan to a
subcommittee consisting of one or more executive officers, subject
to applicable law. The Administrator has delegated authority to
grant certain awards under the 2012 Plan to the equity subcommittee
of the compensation, nominating & governance
committee.
Eligibility
The 2012 Plan provides for the grant of awards to our employees,
directors, consultants, independent contractors, and advisors,
provided the consultants, independent contractors, directors, and
advisors render services not in connection with the offer and sale
of securities in a capital-raising transaction. As of September 30,
2022, 87,314 employees (including each of our executive officers)
and 8 non-employee directors were eligible to participate in the
2012 Plan. The basis for participation in the 2012 Plan is the
Administrator’s decision, in its sole discretion, that an award to
an eligible participant will further the 2012 Plan’s purposes of
providing incentives to attract, retain and motivate eligible
persons whose present and potential contributions are important to
our success and the success of our affiliates, by offering them an
opportunity to participate in our future performance through the
grant of awards. In exercising its discretion, the Administrator
will consider the recommendations of management and the purposes of
the 2012 Plan.
Forms of Awards
The following is a description of the types of awards permitted to
be issued under the 2012 Plan. As of December 1, 2022, only RSU
awards are outstanding under the 2012 Plan.
Restricted Stock Units.
An RSU is an award that covers a number of Shares that may be
settled upon vesting in cash, by the issuance of the underlying
Shares or a combination of both. These awards are subject to
forfeiture prior to vesting as a result of termination of
employment or failure to achieve certain vesting
conditions.
Stock Options.
The 2012 Plan provides for the grant of incentive stock options
that qualify under Section 422 of the Code only to our employees.
All awards other than incentive stock options, including awards of
non-qualified stock options, may be granted to our employees,
directors, consultants, independent contractors, and advisors,
provided the consultants, independent contractors, and advisors
render services not in connection with the offer and sale of
securities in a capital-raising transaction. The exercise price of
each stock option must be at least equal to the fair market value
of our Class A common stock on the date of grant. The exercise
price of incentive stock options granted to 10% stockholders must
be at least equal to 110% of that value. The maximum term of
options granted under the 2012 Plan is ten years or, in the case of
an incentive stock option granted to 10% stockholders, five
years.
Restricted Stock Award.
An RSA is an offer by us to sell Shares subject to restrictions.
The price, if any, of an RSA will be determined by the
Administrator. These awards are subject to forfeiture or repurchase
prior to vesting as a result of termination of employment or
failure to achieve certain vesting conditions.
Stock Appreciation Rights.
SARs provide for a payment, or payments, in cash or Shares, to the
holder based upon the difference between the fair market value of
our Class A common stock on the date of exercise and the stated
exercise price up to a maximum amount of cash or number of Shares.
These awards are subject to forfeiture prior to vesting as a result
of termination of employment or failure to achieve certain vesting
conditions.
Performance Awards.
A performance award is an award that covers an amount of cash or a
number of Shares that may be settled upon achievement of the
pre-established performance conditions in cash or by issuance of
the underlying shares. These awards are subject to forfeiture prior
to vesting as a result of termination of employment or failure to
achieve the performance conditions.
Stock Bonus Awards.
A stock bonus award is an award that covers a number of Shares that
may be granted as additional compensation for prior services or
performance, in cash or by issuance of the underlying Shares.
Vesting conditions may or may not be applied to these
awards.
Additional Provisions
Awards granted under the 2012 Plan may not be transferred in any
manner other than by will or by the laws of descent and
distribution, or as determined by the Administrator. Unless
otherwise restricted by the Administrator, awards that are
non-statutory stock options may be exercised during the lifetime of
the optionee only by the optionee, the optionee’s guardian or legal
representative, or a family member of the optionee who has acquired
the option by a permitted transfer. Awards that are incentive stock
options may be exercised during the lifetime of the optionee only
by the optionee or the optionee’s guardian or legal representative.
Stock options granted under the 2012 Plan generally may be
exercised for a period of three months after the termination of the
optionee’s service to us, except in the case of death or permanent
disability, in which case the options may be exercised for up to
twelve months or six months, respectively, following termination of
the optionee’s service to us. Unless otherwise set forth in a
participant’s award agreement, vesting of RSUs, RSAs, SARs,
performance awards and stock bonus awards ceases on such
participant’s termination of service.
Change of Control or Other Corporate Transactions
If we experience a change in control transaction, outstanding
awards, including any vesting provisions, may be assumed or
substituted by the successor company. Outstanding awards that are
not assumed or substituted will accelerate (unless otherwise
determined by the Board) and will be exercisable for a period of
time determined by the Administrator. The vesting of Shares
underlying outstanding awards to our non-employee directors will
accelerate in full prior to the consummation of such
transaction.
In the event there is a specified type of change in our capital
structure without our receipt of consideration, such as a stock
split, appropriate adjustments will be made to the number of Shares
reserved under the 2012 Plan, the maximum number of Shares that can
be granted in a calendar year, and the number of Shares and
exercise price, if applicable, of all outstanding awards under the
2012 Plan.
Repricing
Without prior stockholder approval the Administrator may (i)
reprice stock options or SARs (and where such repricing is a
reduction in the exercise price of outstanding stock options or
SARs, the consent of the affected participants is not required
provided written notice is provided), and (ii) with the consent of
the respective participants (unless not required pursuant to the
2012 Plan), pay cash or issue new awards in exchange for the
surrender and cancellation of any, or all, outstanding
awards.
Amendment and Termination
The 2012 Plan will terminate in April 2026 (ten years following the
date the Board approved the amendment and restatement of the 2012
Plan), unless it is terminated earlier by the Board. The Board may
amend or terminate the 2012 Plan at any time, which may be without
shareholder approval, unless required by applicable law or
listing
standards. Participant’s awards will be governed by the version of
the 2012 Plan in effect at the time such award was
granted.
Federal Income Tax Consequences
The following is a brief summary of the federal income tax
consequences applicable to awards granted under the 2012 Plan based
on federal income tax laws in effect on the date of this
Information Statement.
This summary is not intended to be exhaustive and does not address
all matters that may be relevant to a particular participant. The
summary does not discuss the tax laws of any state, municipality,
or foreign jurisdiction, or gift, estate, excise, payroll, or other
tax laws other than federal income tax law. The following is not
intended or written to be used, and cannot be used, for the
purposes of avoiding taxpayer penalties. Because circumstances may
vary, we advise all participants to consult their own tax advisors
under all circumstances.
Incentive Stock Options (ISOs).
An optionee generally realizes no taxable income upon the grant or
exercise of an ISO. However, the exercise of an ISO may result in
an alternative minimum tax liability to the employee. With some
exceptions, a disposition of shares purchased under an ISO within
two years from the date of grant or within one year after exercise
produces ordinary income to the optionee equal to the value of the
shares at the time of exercise less the exercise price. The same
amount is deductible by the Company as compensation, provided that
the Company reports the income to the optionee. Any additional gain
recognized in the disposition is treated as a capital gain for
which the Company is not entitled to a deduction. However, if the
optionee exercises an ISO and satisfies the holding period
requirements, the Company may not deduct any amount in connection
with the ISO. If a sale or disposition of shares acquired with the
ISO occurs after the holding period, the employee will recognize
long-term capital gain or loss at the time of sale equal to the
difference between proceeds realized and the exercise price paid.
In general, an ISO that is exercised by the optionee more than
three months after termination of employment is treated as an NQSO.
ISOs are also treated as NQSOs to the extent that they first become
exercisable by an individual in any calendar year for shares having
a fair market value (determined as of the date of grant) in excess
of $100,000.
Non-Qualified Stock Options (NQSOs).
An optionee generally has no taxable income at the time of grant of
an NQSO but realizes income in connection with exercise of the
option in an amount equal to the excess (at the time of exercise)
of the fair market value of shares acquired upon exercise over the
exercise price. The same amount is deductible by the Company as
compensation, provided that, in the case of an employee option, the
Company reports the income to the employee. Upon a subsequent sale
or exchange of the shares, any recognized gain or loss after the
date of exercise is treated as capital gain or loss for which the
Company is not entitled to a deduction.
SARs.
Generally, the recipient of a SAR will not recognize taxable income
at the time the SAR is granted. If a participant receives the
appreciation inherent in the SAR in cash, the cash will be taxed as
ordinary income to the participant at the time it is received. If a
participant receives the appreciation inherent in the SAR in
shares, the spread between the then-current market value and the
base price will be taxed as ordinary income to the participant at
the time it is received. In general, there will be no federal
income tax deduction allowed to the Company upon the grant or
termination of SARs. However, upon the settlement of a SAR, the
Company will be entitled to a deduction equal to the amount of
ordinary income the recipient is required to recognize as a result
of the settlement.
Restricted Stock Awards.
The recipient of a RSA will not recognize any taxable income for
federal income tax purposes in the year of the award, provided that
the shares are subject to restrictions (that is, they are
nontransferable and subject to a substantial risk of forfeiture).
However, the recipient may elect under Section 83(b) of the
Internal Revenue Code to recognize compensation income in the year
of the award in an amount equal to the fair market value of the
shares on the date of the award (less the purchase price, if any,
paid for such shares), determined without regard to the
restrictions. If a Section 83(b) election is made, the capital
gain/loss holding period for such shares commences on the date of
the award. Any further change in the value of the shares will be
taxed as a capital gain or loss only if and when the shares are
disposed of by the recipient. If the recipient does not make a
Section 83(b) election, the fair market value of the shares on the
date the restrictions lapse will be treated as compensation income
to the recipient and will be taxable in the year the restrictions
lapse, and the capital gain/ loss holding period for such shares
will also commence on such date.
Restricted Stock Units.
No income generally will be recognized upon the award of RSUs. The
recipient of an RSU generally will be subject to tax at ordinary
income rates on the market price of unrestricted shares on the date
that such shares are transferred to the participant under the award
(reduced by any amount paid, if any, by the
participant for such RSUs), and the capital gain/loss holding
period for such shares will also commence on such
date.
New Plan Benefits
Other than with respect to certain awards to be made to our
non-employee directors under our Director Compensation Policy as
described in “Director Compensation,” the awards under the 2012
Plan are within the discretion of the Administrator. Furthermore,
those certain awards to be made to our non-employee directors are
determined based on the market price as described in “Director
Compensation.” As a result, the benefits that will be awarded under
the 2012 Plan, including to our non-employee directors, are not
determinable at this time.
Existing Plan Benefits to Named Executive Officers and
Others
The following table summarizes the grants made to our named
executive officers (as identified under “Executive Compensation”,
below), all current executive officers as a group, all current
non-executive directors as a group and all current non-executive
employees as a group, from the inception of the 2012 Plan through
December 1, 2022. The closing price per share of our Class A common
stock on December 1, 2022 was $120.44.
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Name and Position(1)
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RSU Shares Granted Since Adoption of the 2012 Plan |
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Mark Zuckerberg,
Chief Executive Officer
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0 |
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Sheryl K. Sandberg,
Director and Former Chief Operating Officer
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1,776,202 |
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David M. Wehner,
Chief Strategy Officer and Former Chief Financial
Officer
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1,517,658 |
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Christopher K. Cox,
Chief Product Officer
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1,557,411 |
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Marne Levine,
Chief Business Officer
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667,479 |
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All current executive officers (8 persons) |
5,837,864 |
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All current non-executive directors (8 persons) |
1,855,535 |
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Spouse of current executive officer |
567,098 |
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All employees, including all officers who are not executive
officers, as a group (116,243 persons)(2)
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523,556,894
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(1)There
are currently no nominees for election as a director. No person has
received 5% or more of the total awards granted under the 2012 Plan
since its inception.
(2)Represents
total RSUs granted since the adoption of the 2012 Plan to all
employees (current and former) who received awards under the 2012
Plan, other than current executive officers. As of December 1,
2022, there were 133,746,263 total RSUs outstanding under the 2012
Plan.
Securities Authorized for Issuance under Equity Compensation
Plans
The following table summarizes compensation plans under which our
equity securities are authorized for issuance as of December 31,
2021.
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Plan Category |
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(a)
Total Number of Securities to be Issued Upon Exercise of
Outstanding Options, Warrants and Rights |
|
(b)
Weighted-Average Exercise Price of Outstanding Options, Warrants
and Rights ($)(1)
|
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(c)
Number of Securities Remaining Available for Future Issuance Under
Equity Compensation Plans (Excluding Securities Reflected in Column
(a)) |
|
Equity compensation plans approved by security
holders(2)
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98,848,147 |
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N/A |
|
115,531,874 |
|
Equity compensation plans not approved by security
holders
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N/A |
|
N/A |
|
N/A |
(1)The
weighted-average exercise price does not reflect the shares that
will be issued in connection with the settlement of RSUs, since
RSUs have no exercise price. Other than RSUs, there were no
outstanding options, warrants, or rights under our equity
compensation plans as of December 31, 2021.
(2)Consists
of our 2012 Plan. RSUs granted under our 2012 Plan settle into
shares of our Class A common stock.
Registration with the Securities and Exchange
Commission
We intend to file with the U.S. Securities and Exchange Commission
(the “SEC”) a registration statement on Form S-8 covering the
additional shares of our Class A common stock reserved for issuance
by the Plan Amendment during the first quarter of
2023.
EXECUTIVE AND DIRECTOR COMPENSATION
The following disclosure in this section entitled "Executive and
Director Compensation" originally appeared in our proxy statement
with respect to our 2022 Annual Meeting of Shareholders, as filed
with the SEC on April 8, 2022, and, in accordance with SEC
regulations, describes our 2021 compensation program. The
disclosure does not reflect more recent changes to the matters
described therein, such as Sheryl Sandberg’s transition to a
non-employee director role and David Wehner’s transition to the
Chief Strategy Officer role. Terms used in this section and not
otherwise defined have the meanings ascribed thereto in our proxy
statement with respect to our 2022 Annual Meeting of Shareholders,
as filed with the SEC on April 8, 2022.
Director Compensation
Non-Employee Director Compensation Arrangements
Our board of directors and shareholders have adopted a Director
Compensation Policy that sets out the annual compensation for our
non-employee directors and is designed to attract and retain highly
qualified non-employee directors, which we believe is critical to
our long-term success. Our Director Compensation Policy provides
for cash retainers, excess meeting fees, initial equity grants upon
joining our board of directors, and annual equity grants. We
believe our Director Compensation Policy allows us to appropriately
compensate directors for:
•the
heavy workload resulting from an increase in the number of board
and committee meetings over the past several years, the significant
responsibilities of the various committees of our board of
directors, and the small size of our board of directors relative to
our peers;
•the
external scrutiny faced by our non-employee directors, which is
expected to be ongoing; and
•service
in demanding board leadership roles, such as the roles of Lead
Independent Director and chair of our audit & risk oversight
committee and our privacy committee.
On an annual basis, our compensation, nominating & governance
committee reviews and makes recommendations to our board of
directors regarding our non-employee director compensation
arrangements, and our board of directors reviews and approves
non-employee director compensation. As part of this review, our
compensation, nominating & governance committee considers our
directors’ responsibilities and time commitment, as well as
information regarding director compensation paid at peer companies,
including an evaluation by its independent compensation consultant,
Compensia, Inc.
Cash Compensation
The following table presents the annual cash retainers payable to
non-employee members of our board of directors under our Director
Compensation Policy:
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Annual Cash Retainers |
|
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Annual retainer for service as a member of our board of
directors |
$50,000 |
|
Additional annual retainer for service as Lead Independent
Director |
$150,000 |
|
Additional annual retainers for service on committees of our board
of directors |
|
|
Chair of our audit & risk oversight committee |
$50,000 |
|
Non-chair member of our audit & risk oversight
committee |
$20,000 |
|
Chair of our privacy committee |
$50,000 |
|
Non-chair member of our privacy committee |
$20,000 |
Each of these cash retainers is paid on a quarterly basis in
advance of service for each quarter. Annual cash retainers for new
non-employee directors who join our board of directors between our
annual meetings of shareholders are prorated during a director’s
first year of service.
In addition, each non-employee member of our board of directors
(other than Messrs. Andreessen and Thiel) who attend more than four
meetings of our board of directors or more than four meetings of
any individual committee in a calendar year (in each case beginning
in 2020) receive an excess meeting fee of $4,000 for attendance at
each meeting of our board of directors and applicable committee
after the fourth meeting within such calendar year. Excess meeting
fees are paid promptly following the end of such calendar year.
Messrs. Andreessen and Thiel each irrevocably waived the increases
in cash and equity compensation beginning in 2020, and therefore
are granted cash compensation on the same terms as their cash
compensation during 2019.
Equity Compensation
Annual Equity Grants
Members of our board of directors as of the date of our annual
meeting of shareholders are also eligible to receive an annual
grant of RSUs with an initial equity value of $375,000 (including
directors who join the board of directors on the date of such
annual meeting, but excluding Messrs. Andreessen and Thiel).
Messrs. Andreessen and Thiel, each of whom has irrevocably waived
the increases in cash and equity compensation beginning in 2020,
are each eligible to receive an annual grant of RSUs with an
initial equity value of $300,000. These awards are approved each
year automatically on the later of June 1 or the date of our annual
meeting of shareholders for the particular year. These awards will
vest fully on the earlier of (i) May 15 of the following year or
(ii) the date of our annual meeting of shareholders of the
following year if the director does not stand for re-election or is
not re-elected at such annual meeting, so long as the recipient is
a director on such date.
In 2021, following our annual meeting of shareholders, we made an
annual grant of 1,182 RSUs to each non-employee director (other
than Messrs. Andreessen and Thiel), which was based on an initial
equity value of $375,000. In addition, we made an annual grant of
946 RSUs to each of Messrs. Andreessen and Thiel based on an
initial equity value of $300,000.
Initial Equity Grants
New non-employee directors who join our board of directors between
our annual meetings of shareholders are eligible to receive a
one-time grant of RSUs at the time of their appointment with an
initial equity value equal to the value of our annual grant of RSUs
to our non-employee directors ($375,000), prorated for service from
the date of their appointment through the next occurring May 15.
These awards will vest fully on the earlier of (i) the next
occurring May 15 or (ii) the date of our annual meeting of
shareholders of the following year if the director does not stand
for re-election or is not re-elected at such annual meeting, so
long as the recipient is a director on such date. In addition, each
new non-employee director who joins our board of directors is
eligible to receive a one-time grant of RSUs at the time of their
appointment with an initial equity value equal to $1 million. These
awards will vest over approximately a four-year period in 16 equal
quarterly installments.
Annual Limit on Director Compensation
Our Director Compensation Policy limits aggregate compensation
(including both cash and equity-based compensation) payable to each
non-employee director to $1,000,000 per year, except during such
non-employee director’s first year of service on our board of
directors, in which case, such limit is $2,000,000 to account for
the receipt of the initial equity grants to new non-employee
directors (Director Compensation Limit).
Director Security
In light of the high level of scrutiny and elevated threat level
faced by our company and our directors, from time to time, we may
provide personal security services to our non-employee directors
and related tax gross-ups. As such services are non-compensatory in
nature, they are not taken into consideration for any reason
pursuant to our Director Compensation Policy, including when
determining whether a non-employee director’s compensation exceeds
the Director Compensation Limit in any fiscal year.
Stock Ownership Guidelines and Transactions in our
Securities
Our directors are also subject to stock ownership guidelines and
certain prohibitions on transactions in our securities. For more
information, see “Executive Compensation—Compensation Discussion
and Analysis—Stock Ownership Guidelines and Transactions in Our
Securities.”
2021 Director Compensation
The following table presents the total compensation for each person
who served as a non-employee member of our board of directors
during 2021. Mr. Zuckerberg and Ms. Sandberg do not receive
compensation for their service as directors. Total compensation for
Mr. Zuckerberg and Ms. Sandberg for their service as employees
during 2021 is presented in “Executive Compensation—2021 Summary
Compensation Table” below.
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Director Name |
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Fees Earned or Paid in Cash ($)(1)
|
|
Stock Awards ($)(2)
|
|
All Other Compensation ($) |
|
Total ($) |
|
Peggy Alford(3)
|
|
162,000 |
|
398,039 |
|
1,499,789(4)
|
|
2,059,828 |
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Marc L. Andreessen(5)
|
|
52,278 |
|
318,566 |
|
— |
|
|
370,844 |
|
Andrew W. Houston(6)
|
|
102,000 |
|
398,039 |
|
— |
|
|
500,039 |
|
Nancy Killefer(7)
|
|
185,722 |
|
398,039 |
|
— |
|
|
583,761 |
|
Robert M. Kimmitt(8)
|
|
272,000 |
|
398,039 |
|
— |
|
|
670,039 |
|
Peter A. Thiel(9)
|
|
50,000 |
|
318,566 |
|
— |
|
|
368,566 |
|
Tracey T. Travis(10)
|
|
156,000 |
|
398,039 |
|
430,420(11)
|
|
984,459 |
(1)Amounts
include applicable annual cash retainers and excess meeting fees
under our Director Compensation Policy, as more fully described
above.
(2)Amounts
reflect the aggregate grant date fair value of the RSUs granted in
2021, computed in accordance with Financial Accounting Standards
Board ASC Topic 718 (ASC 718). This amount does not reflect the
actual economic value realized by the director.
(3)As
of December 31, 2021, Ms. Alford held 1,182 RSUs, which will vest
on May 15, 2022 so long as Ms. Alford is a member of our board
of directors on such date.
(4)The
amounts reported include approximately $688,403 for costs related
to personal security services and $811,386 for an associated tax
gross-up for taxable personal security services in
2021.
(5)As
of December 31, 2021, Mr. Andreessen held 946 RSUs, which will vest
on May 15, 2022 so long as Mr. Andreessen is a member of our
board of directors on such date.
(6)As
of December 31, 2021, Mr. Houston held (i) 1,182 RSUs, which will
vest on May 15, 2022 so long as Mr. Houston is a member of our
board of directors on such date; and (ii) 2,597 RSUs, which vest in
equal quarterly installments over approximately four years from the
date of grant so long as Mr. Houston is a member of our board of
directors through the applicable vesting date.
(7)As
of December 31, 2021, Ms. Killefer held (i) 1,182 RSUs, which will
vest on May 15, 2022 so long as Ms. Killefer is a member of
our board of directors on such date; and (ii) 3,013 RSUs, which
vest in equal quarterly installments over approximately four years
from the date of grant so long as Ms. Killefer is a member of our
board of directors through the applicable vesting
date.
(8)As
of December 31, 2021, Ambassador Kimmitt held (i) 1,182 RSUs, which
will vest on May 15, 2022 so long as Ambassador Kimmitt is a
member of our board of directors on such date; and (ii) 3,013 RSUs,
which vest in equal quarterly installments over approximately four
years from the date of grant so long as Ambassador Kimmitt is a
member of our board of directors through the applicable vesting
date.
(9)As
of December 31, 2021, Mr. Thiel held 946 RSUs, which will vest on
May 15, 2022 so long as Mr. Thiel is a member of our board of
directors on such date.
(10)As
of December 31, 2021, Ms. Travis held (i) 1,182 RSUs, which will
vest on May 15, 2022 so long as Ms. Travis is a member of our
board of directors on such date; and (ii) 3,013 RSUs, which vest in
equal quarterly installments over approximately four years from the
date of grant so long as Ms. Travis is a member of our board of
directors through the applicable vesting date.
(11)The
amounts reported include approximately $189,600 for costs related
to personal security services and $240,820 for an associated tax
gross-up for taxable personal security services in
2021.
Executive Compensation
Compensation Discussion and Analysis
Overview
This section explains our executive compensation philosophy,
objectives, and design; our compensation governance; our
compensation-setting process; our executive compensation program
elements; and the decisions made in 2021 with respect to the
compensation of each of our named executive officers. Our named
executive officers for 2021, who appear in the section entitled
“—2021 Summary Compensation Table” below, are:
•Mark
Zuckerberg, our founder, Chairman, and Chief Executive Officer
(CEO);
•Sheryl K.
Sandberg, our Chief Operating Officer (COO);
•David
M. Wehner, our Chief Financial Officer (CFO);
•Christopher
K. Cox, our Chief Product Officer (CPO); and
•Marne
Levine, our Chief Business Officer (CBO).
Executive Compensation Philosophy, Objectives, and
Design
Philosophy.
We are focused on our mission to give people the power to build
community and bring the world closer together. All of our products,
including our apps, share the vision of helping to bring the
metaverse to life. For us to be successful, we must hire and retain
a talented team of engineering, product, sales, and general and
administrative professionals who can help achieve this mission
through the successful pursuit of our company priorities. In
addition, we expect our executive team to possess and demonstrate
strong leadership and management capabilities. For more information
regarding our 2021 company priorities, see the section entitled
“—Elements of Executive Compensation” below.
Objectives.
Our compensation program for our named executive officers is built
to support the following objectives:
•attract
the top talent in our leadership positions and motivate our
executives to deliver the highest level of individual and team
impact and results;
•encourage
our executives to focus on our company priorities;
•ensure
each of our executives receives a total compensation package that
encourages his or her long-term retention;
•reward
high levels of performance with commensurate levels of
compensation; and
•align
the interests of our executives with those of our shareholders in
the overall success of our company by emphasizing long-term
incentives.
Design.
Our executive compensation program continues to be heavily weighted
towards equity compensation, in the form of restricted stock units
(RSUs), with cash compensation that is generally below market
relative to executive compensation at our peer companies. We
believe that equity compensation offers the best vehicle to focus
our executive officers on our mission and the successful pursuit of
our company priorities, and to align their interests with the
long-term interests of our shareholders.
We typically grant our executive officers an annual equity award
with service-based vesting conditions where the commencement of
vesting is deferred until a future date, as discussed further in
the section entitled “—Elements of Executive Compensation—Equity
Compensation” below. When combined with the executives’ prior
equity awards, we believe that these additional awards represent a
strong long-term retention tool and provide the executive officers
with effective long-term equity incentives.
Our compensation, nominating & governance committee evaluates
our executive compensation program, including our mix of cash and
equity compensation, on an annual basis or as circumstances require
based on our business objectives and the competitive environment
for talent. For the near future, we anticipate continuing our
emphasis on pay-for-performance and delivering the substantial
majority of compensation in RSUs that vest over a minimum of four
years.
Compensation Governance
The compensation, nominating & governance committee seeks to
ensure sound executive compensation practices to adhere to our
pay-for-performance philosophy while appropriately managing risk
and aligning our executive compensation program with long-term
shareholder interests. The following principles were the guiding
factors of our pay-for-performance practices during
2021:
▪the
compensation, nominating & governance committee is comprised
solely of independent directors;
▪the
compensation, nominating & governance committee engages an
independent compensation consultant, Compensia, Inc. (Compensia), a
national compensation consulting firm, to advise the committee on
compensation-related matters;
▪the
compensation, nominating & governance committee conducts an
annual review and approval of our compensation strategy, including
a review of our compensation-related risk profile to ensure that
our compensation-related risks are not reasonably likely to have a
material adverse effect on our company;
▪the
compensation, nominating & governance committee retains
discretion on bonus payouts to enable it to respond to unforeseen
events and adjust bonus payouts, as appropriate;
▪we
do not offer post-employment payments or benefits, other than
certain death-related benefits that are generally available to all
employees; and
▪our
compensation philosophy and related governance features are
complemented by several specific policies and practices that are
designed to align our executive compensation program with long-term
shareholder interests, including the following:
◦our
executives are subject to company-wide policies that prohibit
trading in futures and derivative securities and engaging in
hedging activities relating to our securities, holding our
securities in margin accounts, pledging our securities as
collateral for loans, and engaging in short sales of our
securities;
◦our
executives are subject to stock ownership guidelines that require
them to maintain significant ownership of our common
stock;
◦we
offer limited perquisites that are for business-related purposes or
necessary for the security of our executive officers;
and
◦our
executives participate in broad-based company-sponsored health and
welfare benefits programs on the same basis as our other full-time,
salaried employees.
Compensation-Setting Process
Role of Our Compensation, Nominating & Governance
Committee.
The compensation, nominating & governance committee is
responsible for overseeing all aspects of our executive
compensation program, including executive salaries, payouts under
our bonus plan, the size and structure of equity awards, and
executive perquisites. The compensation, nominating &
governance committee is solely responsible for determining the
compensation of our CEO and reviews and approves the compensation
of our other executive officers. For more information regarding the
responsibilities of the compensation, nominating & governance
committee, see the section entitled “Corporate Governance—Board
Committees.”
Role of Management. In
setting compensation for 2021, our CEO, our COO, and our Head of
People provided
their views to the compensation, nominating & governance
committee on how to implement our compensation philosophy through
our executive compensation program and attended meetings of the
compensation, nominating & governance committee. Our CEO and
COO made recommendations to the compensation, nominating &
governance committee regarding compensation for our executive
officers, other than for themselves, because of their daily
involvement with our executive team. No executive officer
participated directly in the final deliberations or determinations
regarding his or her own compensation package or was present during
such determinations, except for our CEO who has requested that his
base salary be fixed at $1 per year.
Our management team and the compensation, nominating &
governance committee each play a role in evaluating and mitigating
any risk that may exist relating to our compensation plans,
practices, and policies for all employees, including our named
executive officers, as further described in the section entitled
“—Compensation Risk Assessment” below.
Role of Compensation Consultant.
The compensation, nominating & governance committee has the
authority to engage its own advisors to assist in carrying out its
responsibilities. In 2021, the compensation, nominating &
governance committee engaged the services of Compensia to advise
the committee regarding the amount and types of compensation that
we provide to our executives and how our compensation practices
compared to the compensation practices of other companies.
Compensia is engaged directly by the compensation, nominating &
governance committee. Compensia does not provide any services to us
other than the services provided to the compensation, nominating
& governance committee. The compensation, nominating &
governance committee has reviewed, and will continue to review
going forward, the independence of Compensia under applicable SEC
and Nasdaq rules and believes that Compensia does not have any
conflicts of interest in advising the committee.
Use of Comparative Market Data.
We aim to compensate our executive officers at levels that are
commensurate with the most competitive levels of compensation for
executives in similar positions at the group of publicly-traded
peer companies set forth below, with whom we compete for hiring and
retaining executive talent (our Peer Group). In making compensation
decisions, the compensation, nominating & governance committee
also considers the scope of responsibility of each executive
officer, our current practice of maintaining minimal
differentiation between the cash compensation packages of our
executive officers, the unvested balances of equity awards held by
each executive officer, as well as the compensation, nominating
& governance committee’s assessment of each executive officer’s
performance and impact on the organization. In determining 2021
compensation, the compensation, nominating & governance
committee did not use a formula for taking into account these
different factors.
We analyze market data for executive compensation at least annually
using the most relevant published survey sources, information
available from public filings, and input from Compensia. Management
and Compensia provided the compensation, nominating &
governance committee with both cash and equity compensation data
for our Peer Group, which was selected from companies that meet
some or all of the criteria listed below:
▪technology
or media company;
▪key
talent competitor;
▪minimum
revenue of $10 billion; and/or
▪minimum
market capitalization of $50 billion.
In the second quarter of 2020, using this criteria as a baseline,
the compensation, nominating & governance committee approved
the following companies for inclusion in our Peer Group for
2021:
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2021 Peer Group |
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Alphabet |
Netflix |
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Amazon.com |
PayPal Holdings |
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Apple |
salesforce.com |
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AT&T |
The Walt Disney Company |
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Cisco Systems |
Uber Technologies |
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Comcast |
Verizon Communications |
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Microsoft |
|
In December 2020, the compensation, nominating & governance
committee reviewed our executive compensation against this Peer
Group to ensure that our executive officer compensation was
competitive and sufficient to recruit and retain our executive
officers. Compensia provided the compensation, nominating &
governance committee with an analysis of total cash compensation
data (base salaries and cash bonus awards at target) and total
direct compensation data (total cash compensation and equity
compensation) at various percentiles. While the compensation,
nominating & governance committee considered this data in
determining executive officer compensation, we did not seek to
benchmark our executive compensation to any pre-set “target”
percentile of the competitive market. Rather, the compensation,
nominating & governance committee sought to compensate our
executive officers at a level that would allow us to successfully
recruit and retain the best possible talent for our executive
team.
Further, as our revenue and market capitalization have increased
significantly over the last several years, the compensation,
nominating & governance committee gives greater weight to the
compensation levels of companies in our Peer Group that have higher
revenue and market capitalization compared to other companies in
the Peer Group when making decisions about the compensation of our
executive officers. The compensation, nominating & governance
committee also relies on the knowledge and experience of its
members and our management in determining the appropriate
compensation levels for our executive officers. Overall,
Compensia’s analysis of our Peer Group indicated that the target
total cash compensation for our named executive officers who were
then serving, other than our CEO, was between the 15th and 40th
percentiles of the companies in our Peer Group. When equity
compensation was factored in, based on the “initial equity value”
described below and without taking into account the effect of the
deferred vesting start dates that are applicable to certain of the
equity compensation awards of our named executive officers, the
target total direct compensation for our named executive officers
who were then serving, other than our CEO, was between the 80th and
85th percentiles relative to the companies in our Peer
Group.
In the second quarter of 2021, the compensation, nominating &
governance committee reviewed the selection criteria and the
companies in our Peer Group. Following that review, the
compensation, nominating & governance committee decided not to
make any changes to the Peer Group. The compensation, nominating
& governance committee believes our Peer Group reflects the
current competitive and talent environment. Accordingly, we plan to
use the following list of companies in our Peer Group for the 2022
executive compensation process:
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2022 Peer Group |
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Alphabet |
Netflix |
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Amazon.com |
PayPal Holdings |
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Apple |
salesforce.com |
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AT&T |
The Walt Disney Company |
|
Cisco Systems |
Uber Technologies |
|
Comcast |
Verizon Communications |
|
Microsoft |
|
The compensation, nominating & governance committee expects to
periodically review and update our Peer Group and the underlying
criteria as our business and market environment continue to
evolve.
Elements of Executive Compensation
Our executive officer compensation packages generally
include:
•base
salary;
•performance-based
cash incentives; and
•equity-based
compensation in the form of RSUs.
We believe that our compensation mix supports our objective of
focusing on at-risk compensation having significant financial
upside based on individual performance and our performance relative
to company priorities. We expect to continue to emphasize equity
awards because of the direct link that equity compensation provides
between shareholder interests and the interests of our executive
officers, thereby motivating our executive officers to focus on
increasing our value over the long term.
Base Salary.
The compensation, nominating & governance committee believes
base salaries are a necessary element of compensation in order to
attract and retain highly qualified executive officers. The
compensation, nominating & governance committee reviews the
base salaries of our executive officers at least annually and may
adjust them from time to time, if needed, to reflect changes in
market conditions or other factors. Historically, our executive
officers have received base salaries within a narrow range that was
established when we were a smaller company with cash constraints,
and based on our desire to maintain internal pay equity among our
executive officers, as well as relative to other key employees. As
we have grown, we have increased base salaries for our executive
officers (other than our CEO), although we still deliver the
substantial majority of compensation to our executive officers in
the form of equity awards.
In the first quarter of 2021, the compensation, nominating &
governance committee decided to increase the base salaries of our
named executive officers who were then serving, other than our CEO,
in order to continue to bring their salaries closer to those paid
to executives holding similar positions at the companies in our
Peer Group. Accordingly, our compensation, nominating &
governance committee increased the base salaries of our named
executive officers then serving as shown in the table below.
Similarly, in the first quarter of 2021, our management increased
Ms. Levine’s base salary in her capacity as Vice President of
Global Partnerships, Business and Corporate Development, prior to
her appointment as our CBO in September 2021. Following these 2021
salary increases, these named executive officer salaries fell
between the 24th and 60th percentiles of the salaries provided to
executives holding similar positions at the companies in our Peer
Group. Previously, Mr. Zuckerberg had requested to receive a base
salary of $1 per year and the compensation, nominating &
governance committee continued to honor this request in
2021.
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Named Executive Officer |
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2020 Base Salary ($) |
|
2021 Base Salary Increase ($) |
|
2021 Base Salary ($)(1)
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|
Mark Zuckerberg |
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1 |
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— |
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1 |
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Sheryl K. Sandberg |
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925,000 |
|
35,000 |
|
960,000 |
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|
David M. Wehner |
|
830,000 |
|
30,000 |
|
860,000 |
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|
Christopher K. Cox(2)
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|
830,000 |
|
30,000 |
|
860,000 |
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Marne L. Levine(3)
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|
715,000 |
|
17,500 |
|
732,500 |
|
(1)Reflects
2021 base salary, which may differ from actual earnings as
reflected in the section entitled “—2021 Summary Compensation
Table” below due to the effective date of salary
increases.
(2)Mr.
Cox re-joined our company in June 2020 after his resignation as our
CPO in April 2019. As such, his actual 2020 earnings as reflected
in the section entitled “—2021 Summary Compensation Table” below
reflect a partial year’s service.
(3)Ms.
Levine was appointed as our CBO in September 2021. The increase in
her base salary reflected above was approved by our management
prior to her appointment as CBO.
Cash Bonuses.
Our Bonus Plan for 2021 provides variable cash incentives, payable
semi-annually, that are designed to motivate our executive officers
to focus on company priorities and to reward them for individual
results and achievements. In 2021, the individual target bonus
percentage for each named executive officer was
unchanged
from 2020 at 75% of such executive’s base salary. After the 2021
base salary increases noted above, target total cash compensation
(base salary plus target bonus) for our named executive officers
(other than our CEO) was between the 15th and 40th percentiles of
the target total cash compensation of executives holding similar
positions at the companies in our Peer Group. All of our named
executive officers, except our CEO, participated in the Bonus Plan
in 2021.
For 2021, there were two six-month performance periods under our
Bonus Plan, which we refer to as First Half 2021 and Second Half
2021. For each performance period in 2021, the compensation,
nominating & governance committee approved a set of company
priorities in order to focus our executive officers on key areas of
performance for the period in question. The First Half 2021 and
Second Half 2021 company priorities reflect operational and
non-operational objectives established by our compensation,
nominating & governance committee, in consultation with our CEO
and CFO. The company priorities did not have specific target levels
associated with them for purposes of determining performance under
the Bonus Plan, and our compensation, nominating & governance
committee had full discretion to determine the level of bonus
payout for each performance period.
2021 Bonus Plan Payouts.
We calculate Bonus Plan payouts to each participant using the
following formula:
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Base Eligible Earnings
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x |
Individual Target Bonus Percentage
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x |
Company Performance Percentage
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x |
Individual Performance Percentage
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= |
Individual Bonus Payout
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2021 Priorities and Company Performance Percentage.
Our First Half 2021 and Second Half 2021 company priorities as
approved by the compensation, nominating & governance committee
were as follows:
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Continue making progress on the major social issues facing the
internet and our company, including privacy, safety, and
security. |
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Build new experiences that meaningfully improve people’s lives
today and set the stage for even bigger improvements in the
future. |
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Keep building our business by supporting the millions of businesses
that rely on our services to grow and create jobs. |
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Communicate more transparently about what we’re doing and the role
our services play in the world. |
None of these priorities were assigned any specific weighting or
dollar amount of the target bonus. In March 2022, our compensation,
nominating & governance committee approved the same company
priorities for 2022 as were approved for First Half 2021 and Second
Half 2021.
The compensation, nominating & governance committee exercised
its discretion in determining the company performance percentage
for our First Half 2021 and Second Half 2021 performance after
taking into account our delivery of results across all of the areas
identified by the company priorities, as well as our performance
and execution in light of the ongoing operational challenges caused
by the COVID-19 pandemic. For the First Half 2021, the
compensation, nominating & governance committee also took into
account the operation of our privacy program; our continued
investment in developing new product experiences across our family
of apps and consumer hardware initiatives; our strong business
performance during the pandemic; and our brand performance and
reputation. For the Second Half 2021, the compensation, nominating
& governance committee took into account our progress in
meeting our regulatory obligations as well as efforts to invest in
privacy, safety, security, and other compliance obligations; our
progress in developing new product experiences such as Reels,
messaging, and virtual reality; our business performance, including
support for business that rely on our services to grow and create
jobs; and our brand and reputation, including the re-branding
efforts executed in the second half of 2021. The compensation,
nominating &
governance committee approved a company performance percentage of
110% for the First Half 2021 and 100% for the Second Half
2021.
Individual Performance Percentage.
The individual performance percentage is based upon each named
executive officer’s individual performance assessment for the
performance period under consideration. Consistent with our
pay-for-performance philosophy, a higher performance assessment
results in a higher individual performance percentage (and
vice-versa) such that it is possible for an executive with a low
assessment to get less than their target bonus payout, or no bonus
payout whatsoever. In 2021, potential individual performance
percentages under our Bonus Plan were 0%, 85%, 100%, 125%, 200%, or
300%. A named executive officer meeting our expected high level of
performance expectations would receive an individual performance
percentage of 100%.
Individual performance assessments for each named executive officer
then serving were determined in the discretion of the compensation,
nominating & governance committee following discussions with
our CEO and our COO (except in the case of our COO when her
individual performance assessment was being determined). The
performance assessment determinations were based on an overall
subjective assessment of each executive officer’s performance and
no single factor was determinative in setting bonus payout levels,
nor was the impact of any individual factor on the bonus
quantifiable. We operate in a rapidly evolving and highly
competitive industry and we set a high bar for performance
expectations for each one of our named executive officers. The
compensation, nominating & governance committee evaluates our
named executive officers based on their overall performance,
impact, and results, as well as their demonstration of strong
leadership, long-term vision, effective execution, and management
capabilities.
First Half 2021 and Second Half 2021 payout levels and achievements
and considerations for each named executive officer are set forth
below.
Mark Zuckerberg.
Mr. Zuckerberg did not participate in the Bonus Plan in 2021.
Notwithstanding the foregoing, the compensation, nominating &
governance committee separately assessed his performance as our
CEO. The compensation, nominating & governance committee shared
its assessment with the independent members of our board of
directors in executive session, and our Lead Independent Director
shared this assessment with Mr. Zuckerberg.
Sheryl K. Sandberg.
Ms. Sandberg received $489,447 for the First Half 2021 bonus,
which reflected the continuation of her strategic leadership in the
wake of the global pandemic, including strong revenue growth driven
by small businesses, as well as the restructuring of the sales,
marketing, and partnership teams into a single organization. Ms.
Sandberg received $360,000 for the Second Half 2021 bonus, which
reflected her revenue responsibility with a focus on small
businesses, advertising partnerships, and partnerships with public
figures, as well as managing our operations as we expand our
investment in a remote workforce.
David M. Wehner.
Mr. Wehner received $438,678 for the First Half 2021 bonus, which
reflected the continuation of his strategic leadership in the wake
of the global pandemic, including delivering a long-term strategic
plan and preparing facilities for our personnel to return to the
office. Mr. Wehner received $645,000 for the Second Half 2021
bonus, which reflected his delivery of a strategic budget for 2022,
continued preparation for our personnel to return to the office,
and leading our change to segment reporting.
Christopher K. Cox.
Mr. Cox received $438,678 for the First Half 2021 bonus, which
reflected the continuation of his strategic leadership in the wake
of the global pandemic, including key leadership hires in the
family of apps organization as well as leading various cross-app
projects. Mr. Cox received $403,125 for the Second Half 2021 bonus,
which reflected his continued strong leadership across the family
of apps, including continuing to drive cross-app projects as well
as strong bench planning and execution of leadership
transitions.
In addition, Mr. Cox re-joined the company in June 2020 and
received a cash sign-on bonus in the aggregate amount of
$4,000,000, which was paid in 2021 after the one-year anniversary
of his employment start date. Our compensation, nominating &
governance committee believed that this sign-on bonus was
appropriate as an incentive to re-join our company and to help
retain Mr. Cox through the one-year anniversary of his employment
start date.
Marne L. Levine.
As Ms. Levine was appointed as our CBO in September 2021, her First
Half 2021 bonus reflects her performance in her prior role as Vice
President of Global Partnerships, Business and Corporate
Development and her individual performance assessment was
determined in the discretion of management. Ms. Levine received
$299,935 for the First Half 2021 bonus, which reflected her
strategic planning to bring the sales and
partnerships organizations together to form the Meta Business Group
and management of key leadership transitions, as well as developing
key partnerships in the first half of 2021. Ms. Levine received
$343,359 for the Second Half 2021 bonus, which reflected her
leadership of the Meta Business Group and leading the go-to-market
strategy and partnership development across advertising, emerging
businesses including commerce and business messaging, tech
platforms, creators, public figures, and Reality Labs.
The following table summarizes the calculations that were used in
determining the cash bonus paid to each of our named executive
officers for 2021:
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Named Executive Officer |
|
Performance Period |
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Base Eligible Earnings ($)(1)
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Individual Target Bonus Percentage (%) |
|
Company Performance Percentage
(%) |
|
Individual Performance Percentage
(%) |
|
Individual Bonus Payout ($) |
|
Sheryl K. Sandberg |
|
First Half 2021 |
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474,615 |
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75 |
|
110 |
|
125 |
|
489,447 |
|
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Second Half 2021 |
|
480,000 |
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75 |
|
100 |
|
100 |
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360,000 |
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Total |
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954,615 |
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|
849,447 |
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David M. Wehner |
|
First Half 2021 |
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425,385 |
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75 |
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110 |
|
125 |
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438,678 |
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Second Half 2021 |
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430,000 |
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75 |
|
100 |
|
200 |
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645,000 |
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Total |
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855,385 |
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|
1,083,678 |
|
Christopher K. Cox |
|
First Half 2021 |
|
425,385 |
|
75 |
|
110 |
|
125 |
|
438,678 |
|
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Second Half 2021 |
|
430,000 |
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75 |
|
100 |
|
125 |
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403,125 |
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Total |
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855,385 |
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|
841,803 |
|
Marne L. Levine |
|
First Half 2021 |
|
363,558 |
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75 |
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110 |
|
100 |
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299,935 |
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Second Half 2021 |
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366,250 |
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75 |
|
100 |
|
125 |
|
343,359 |
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Total |
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729,808 |
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643,294 |
(1)Reflects
actual earnings for 2021, which may differ from approved 2021 base
salaries due to the effective date of salary
increases.
Equity Compensation.
Most of our executive officers’ target total direct compensation is
delivered through equity awards in the form of RSUs. We use equity
compensation to align our executive officers’ financial interests
with those of our shareholders, to attract industry leaders of the
highest caliber, and to retain them for the long term. In addition
to the initial equity award that each executive officer receives as
part of his or her new hire compensation package, the compensation,
nominating & governance committee typically grants our
executive officers additional equity awards each year as part of
our company-wide equity refresher program. Additional equity awards
for each of our executive officers are determined on a
discretionary basis taking into account the following
factors:
•delivering
equity values that are highly competitive when compared against
those granted to executives with similar responsibilities at the
companies in our Peer Group that have higher revenue and market
capitalization when compared to other companies in our Peer
Group;
•each
executive officer’s individual performance assessment, the results
and contributions delivered during the year, as well as the
anticipated potential future impact of each individual
executive;
•the
size and vesting schedule of existing equity awards in order to
maximize the long-term retentive power of all additional awards;
and
•the
size of each executive officer’s target total cash compensation
(base salary plus cash bonus awards at target), which is generally
significantly lower than the cash compensation for executives with
similar responsibilities at the companies in our Peer
Group.
Based on the foregoing factors, in March 2021, our compensation,
nominating & governance committee granted each of our executive
officers, other than our CEO and our CBO, an award of RSUs with a
specific “initial equity value” based on an estimated total value
for each award before taking into account the vesting
considerations described below. The compensation, nominating &
governance committee calculated the number of RSUs to be granted by
dividing this initial equity value by $264.81 per share, which was
the average closing price for the seven trading days following the
announcement of our earnings for the fourth quarter of 2020 and the
same price that was used for 2021 refresher awards to all other
employees. In 2021, Ms. Levine received two awards of RSUs in her
capacity as Vice President of Global Partnerships, Business and
Corporate Development, before she was appointed
as CBO in September 2021. These awards were granted in March 2021
by the equity subcommittee of our compensation, nominating &
governance committee based on the “initial equity value” described
below.
Deferred Vesting of 2021 RSU Awards.
Due to our desire to provide incentives for our named executive
officers to focus on long-term strategic and business objectives,
the compensation, nominating & governance committee (and, in
the case of Ms. Levine, the equity subcommittee) deferred the
vesting start dates of some 2021 RSU awards made to our named
executive officers to a future date determined individually for
each executive. The 2021 RSU awards will vest quarterly over four
years following the vesting start dates as described in the section
entitled “—2021 Equity Awards” below.
The compensation, nominating & governance committee annually
reviews the size and vesting schedule for the remaining unvested
portion of the outstanding equity awards held by each of our named
executive officers and, for 2021, agreed with the recommendation of
our CEO and COO (except that our COO did not participate in
discussions regarding her own equity compensation) that the
existing equity awards appropriately satisfied our retention and
incentive goals for each of our named executive officers.
Additionally, as part of this review, the compensation, nominating
& governance committee determines on a case-by-case basis
whether the annual equity awards granted to our named executive
officers should only begin vesting after a significant portion of
each executive’s previously granted and then outstanding equity
awards have vested. Although this practice is not common among the
companies in our Peer Group, the compensation, nominating &
governance committee believes that these deferred vesting schedules
make the equity awards more valuable to us in retaining our named
executive officers and reflect our emphasis on our long-term
success. As a result of this review, the compensation, nominating
& governance committee determined that the 2021 RSU awards
granted to Ms. Sandberg and Mr. Wehner will not begin to vest
unless they remain continuously employed by the company through the
applicable future dates described in the following paragraphs and
in the section entitled “—2021 Grants of Plan-Based Awards Table”
below. Similarly, the equity subcommittee determined that the 2021
RSU awards granted to Ms. Levine will not begin to vest unless she
remains continuously employed by the company through the applicable
future dates described below. For more information relating to the
vesting schedules of these RSU awards, see the section entitled
“—2021 Grants of Plan-Based Awards Table” below.
2021 Equity Awards.
Mr. Zuckerberg did not receive any additional equity awards in
2021 because our compensation, nominating & governance
committee believed that his existing equity ownership position
sufficiently continued to align his interests with those of our
shareholders.
Our other named executive officers received the following RSU
awards in 2021:
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Named Executive Officer |
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Initial Equity Value ($) |
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Number of RSUs (#)(1)
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Vesting Start Date |
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Sheryl K. Sandberg |
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20,000,000 |
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75,526 |
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November 15, 2021 |
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David M. Wehner |
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20,000,000 |
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75,526 |
|
August 15, 2021 |
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Christopher K. Cox |
|
20,000,000 |
|
75,526 |
|
February 15, 2021 |
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Marne L. Levine(2)
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12,500,000 |
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47,204 |
|
August 15, 2021 |
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10,000,000 |
|
37,763 |
|
November 15, 2023 |
(1)The
number of RSUs was calculated by dividing the initial equity value
by $264.81, which was the same value used for 2021 refresher awards
to all other employees in March 2021, and rounding up to the
nearest whole share.
(2)Ms.
Levine received two RSU awards in 2021. The first award is subject
to a four-year quarterly vesting schedule, with 1/16th of the RSUs
vesting on the first quarterly vesting date following the vesting
start date of August 15, 2021 and the remainder vesting quarterly
thereafter, subject to continued employment through each vesting
date. The second award is subject to a five-year quarterly vesting
schedule with 1/20th of the RSUs vesting on the first quarterly
vesting date following the vesting start date of November 15, 2023
and the remainder vesting quarterly thereafter, subject to
continued employment through each vesting date.
The RSUs granted to our named executive officers (other than our
CBO as described above) are subject to a four-year quarterly
vesting schedule, with 1/16th of the RSUs vesting on the first
quarterly vesting date following the vesting start date and the
remainder vesting quarterly thereafter, subject to continued
employment through each vesting date. Following the grants of these
equity awards in March 2021 and based on the “initial equity value”
set
forth above, the target total direct compensation for our named
executive officers, other than our CEO, was between the 80th
percentile relative to the companies in our Peer Group and the top
of our Peer Group.
Perquisites and Other Benefits
We provide certain perquisites to our named executive officers for
the reasons described below. In approving these perquisites, our
compensation, nominating & governance committee considered
comparative Peer Group and other market data provided by
Compensia.
Because of the high visibility of our company, our compensation,
nominating & governance committee has authorized an “overall
security program” for each of Mr. Zuckerberg and Ms. Sandberg
to address safety concerns due to specific threats to their safety
arising directly as a result of Mr. Zuckerberg’s position as our
founder, CEO, Chairman, and controlling shareholder and Ms.
Sandberg’s position as our COO. We require these security measures
for the company’s benefit because of the importance of
Mr. Zuckerberg and Ms. Sandberg to Meta, and we believe that
the scope and costs of these security programs are appropriate and
necessary.
Our compensation, nominating & governance committee evaluates
these security programs at least annually, including a review of
security professional assessments of safety threats and
recommendations for the security programs. Since the implementation
of Mr. Zuckerberg’s overall security program, each of these
assessments has identified specific threats to Mr. Zuckerberg
as a result of the high-profile nature of being our founder, CEO,
Chairman, and controlling shareholder. We believe that
Mr. Zuckerberg’s role puts him in a unique position: he is
synonymous with Meta and, as a result, negative sentiment regarding
our company is directly associated with, and often transferred to,
Mr. Zuckerberg. Mr. Zuckerberg is one of the most-recognized
executives in the world, in large part as a result of the size of
our user base and our continued exposure to global media,
legislative, and regulatory attention.
Under Mr. Zuckerberg’s overall security program, we pay for costs
related to personal security for Mr. Zuckerberg at his residences
and during personal travel, including the annual costs of security
personnel for his protection and the procurement, installation, and
maintenance of certain security measures for his
residences. We also provide an annual pre-tax allowance of $10
million to Mr. Zuckerberg to cover additional costs related to his
and his family’s personal security. This allowance is paid to Mr.
Zuckerberg net of required tax withholdings, and Mr. Zuckerberg
must apply the net amount towards additional personnel, equipment,
services, residential improvements, or other security-related
costs. Although Mr. Zuckerberg expects to use the full net amount
during each calendar year in which the allowance is paid, he may
apply any unused portion of the allowance for a given year to cover
excess security-related costs in future years or prior years (no
earlier than 2018).
In addition, Mr. Zuckerberg uses private aircraft for personal
travel in connection with his overall security program (including,
beginning in 2022, a private aircraft that is indirectly and wholly
owned by Mr. Zuckerberg and operated by an independent charter
company). On certain occasions, Mr. Zuckerberg may be
accompanied by guests when using private aircraft. For travel by
Mr. Zuckerberg on the aircraft owned by Mr. Zuckerberg, we pay an
amount commensurate with market rates for comparable travel
pursuant to a written policy overseen by our audit & risk
oversight committee and compensation, nominating & governance
committee. Although we do not consider Mr. Zuckerberg’s overall
security program to be a perquisite for his benefit for the reasons
described above, the costs related to personal security for Mr.
Zuckerberg at his residences and during personal travel pursuant to
his overall security program, as well as the annual security
allowance and the costs of private aircraft for personal travel,
are reported as other compensation to Mr. Zuckerberg in the “All
Other Compensation” column of the “—2021 Summary Compensation
Table” below. The costs of Mr. Zuckerberg’s security program vary
from year to year depending on requisite security measures, his
travel schedule, and other factors. Increased costs in 2021 were
primarily due to regular personal travel, costs relating to
security protocols during the COVID-19 pandemic, and market
increases in the costs of security personnel. The compensation,
nominating & governance committee believes that these costs are
appropriate and necessary in light of the threat landscape and the
fact that Mr. Zuckerberg has requested to receive only $1 in annual
salary and does not receive any bonus payments, equity awards, or
other incentive compensation.
Our security professional assessments have also identified specific
threats to Ms. Sandberg as a result of her high-profile role as our
COO. Under Ms. Sandberg’s overall security program, we pay for
costs related to personal security for Ms. Sandberg at her
residences and during personal travel, including the annual costs
of security personnel for her protection. In addition, Ms. Sandberg
uses private aircraft for personal travel in connection with her
security program and may be accompanied by guests when using
private aircraft on certain occasions. The costs related to
personal security for Ms. Sandberg, as well as the costs of private
aircraft for personal travel, are reported
as other compensation to Ms. Sandberg in the “All Other
Compensation” column of the “—2021 Summary Compensation Table”
below. The costs of Ms. Sandberg’s security program vary from year
to year depending on requisite security measures, her travel
schedule, and other factors. Increased costs in 2021 were primarily
due to regular personal travel, and market increases in the costs
of security personnel.
From time to time, we also provide certain personal security
measures to other executive officers in response to specific
security threats in light of their roles at our company, including
pre-tax security allowances, as well as certain costs related to
personal security at their residences and related tax gross-ups.
The costs related to personal security for our executive officers
are reported as other compensation to them in the “All Other
Compensation” column of the “—2021 Summary Compensation Table”
below.
2019 Say on Pay Vote
We held a non-binding advisory shareholder vote on the compensation
program for our named executive officers, commonly referred to as a
“say on pay” vote, at our 2019 Annual Meeting of Shareholders. Over
90% of the voting power of shares voted at the 2019 Annual Meeting
of Shareholders were cast in favor of our say on pay proposal. Our
compensation, nominating & governance committee considered the
result of this advisory vote to be an endorsement of our
compensation program, policies, practices, and philosophy for our
named executive officers. Our compensation, nominating &
governance committee will continue to consider the outcome of our
say on pay votes and our shareholder views when making compensation
decisions for our named executive officers.
Based on the results of a separate non-binding advisory shareholder
vote on the frequency of future shareholder advisory votes
regarding the compensation program for our named executive
officers, commonly referred to as a “say on frequency” vote, held
at our 2019 Annual Meeting of Shareholders, our board of directors
determined that we will hold our say on pay vote every three years
until the next required say on frequency vote. We are holding our
say on pay vote at the 2022 Annual Meeting of our shareholders. Our
next say on frequency vote will occur no later than
2025.
Tax Deductibility
Section 162(m) of the Internal Revenue Code of 1986, as amended,
limits the amount that we may deduct from our federal income taxes
for compensation paid to certain executive officers, including our
named executive officers, to $1 million per executive officer per
year. Prior law provided an exception to this deduction limit for
compensation paid to our CFO and for certain “performance-based
compensation.” Effective for tax years beginning after December 31,
2017, this deduction limit applies to all of our named executive
officers (which now includes our CFO) and the exception for
“performance-based compensation” is no longer available. As a
result, compensation paid to our named executive officers in excess
of $1 million is not deductible unless it qualifies for the
transition relief applicable to certain compensation arrangements
in place as of November 2, 2017, including RSUs that were granted
to our CFO through such date, and RSUs that were granted to certain
executive officers before April 1, 2015. Because of the limited
availability of formal guidance under the transition relief
provisions, we cannot guarantee that any compensation arrangements
intended to qualify for exemption under Section 162(m) will
actually receive this treatment.
While our compensation, nominating & governance committee is
mindful of the benefit to us of the full tax deductibility of
compensation, our compensation, nominating & governance
committee believes that it should not be constrained by the
requirements of Section 162(m) where those requirements would
impair flexibility in compensating our named executive officers in
a manner that can best promote our corporate objectives. Therefore,
our compensation, nominating & governance committee may approve
compensation that may not be fully deductible because of the limits
of Section 162(m). Our compensation, nominating & governance
committee intends to continue to compensate our named executive
officers in a manner it believes is consistent with the best
interests of our company and our shareholders.
Compensation Risk Assessment
Our management team and the compensation, nominating &
governance committee each play a role in evaluating, monitoring,
and mitigating any risk that may exist relating to our compensation
plans, practices, and policies for all employees, including our
named executive officers. In early 2022, our management, in
conjunction with Compensia, the compensation, nominating &
governance committee’s independent compensation consultant,
performed an assessment, of our compensation plans, practices, and
policies and concluded that our compensation
programs do not create risks that are reasonably likely to have a
material adverse effect on the company. The compensation,
nominating & governance committee has reviewed this report and
agreed with the conclusion. The objective of the assessment was to
identify any compensation plans, practices, or policies that may
encourage employees to take unnecessary risk that could threaten
the company. No such plans, practices, or policies were identified.
The risk assessment process included, among other things, a review
of our cash and equity incentive-based compensation plans to ensure
that they are aligned with our company performance goals and the
overall compensation to ensure an appropriate balance between fixed
and variable pay components and between short-term and long-term
incentives.
Stock Ownership Guidelines and Transactions in Our
Securities
Stock Ownership Guidelines
To further align the interests of our executive officers and
directors with those of our shareholders, and based on the
recommendation of our compensation, nominating & governance
committee, in September 2018 our board of directors adopted minimum
stock ownership guidelines applicable to our executive officers and
non-employee directors. Our board of directors subsequently amended
our stock ownership guidelines, effective as of May 2020. Under
these guidelines, our executive officers are required to own shares
with an equivalent value of $4.0 million and our non-employee
directors are required to own shares with an equivalent value of
$500,000, in each case by the later of (i) five years from the
adoption of the initial stock ownership guidelines, or (ii) five
years from becoming an executive officer or non-employee director.
In addition to these requirements, our non-employee directors are
required to own shares with an equivalent value of $750,000 by the
later of (i) five years from the date of the amendment of these
stock ownership guidelines, or (ii) five years from becoming a
non-employee director.
As of December 31, 2021, all of our executive officers and
non-employee directors either met the applicable ownership
threshold or were within the permitted time period to attain the
required ownership. As our CEO and controlling shareholder, Mr.
Zuckerberg currently has stock ownership significantly in excess of
the required ownership threshold. As a result, our stock ownership
guidelines provide that our compensation, nominating &
governance committee will reassess appropriate ownership
requirements applicable to Mr. Zuckerberg in his capacity as an
executive officer if in the future his stock holdings fall below
one percent of our total outstanding capital stock.
Prohibited Transactions in Our Securities
Our executive officers and directors are subject to company-wide
policies that prohibit the following transactions: trading in
futures and derivative securities and engaging in hedging
activities relating to our securities, including exchange traded
options, puts, calls, collars, forward sale contracts, equity
swaps, exchange funds, or other arrangements or instruments
designed to hedge or offset decreases in the market value of our
securities; holding our securities in margin accounts; pledging our
securities as collateral for loans; and engaging in short sales of
our securities.
Rule 10b5-1 Trading Plans
Our executive officers and directors are required to conduct all
purchase or sale transactions under a trading plan established
pursuant to Rule 10b5-1 under the Exchange Act. Through a Rule
10b5-1 trading plan, the executive officer or director contracts
with a broker to buy or sell shares of our common stock on a
periodic basis. The broker then executes trades pursuant to
parameters established by the executive officer or director when
entering into the plan, without further direction from them. The
executive officer or director may amend or terminate the plan in
specified circumstances. Our requirement to conduct all purchase or
sale transactions under a Rule 10b5-1 trading plan generally
includes transactions in shares held through trusts and other
entities controlled by our executive officers and directors, but
excludes certain transactions by venture capital investment
entities that may be affiliated with our directors. Such
requirements may be waived by our board of directors, compensation,
nominating & governance committee, or compliance officer in
consultation with legal counsel.
2021 Summary Compensation Table
The following table presents summary information regarding the
total compensation awarded to, earned by, or paid to each of the
named executive officers for services rendered to us for the years
ended December 31, 2021, 2020, and 2019.
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Name and Principal Position |
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Fiscal Year |
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Salary ($)(1)
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Bonus ($)(2)
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Stock Awards ($)(3)
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All Other Compensation ($) |
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Total ($) |
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Mark Zuckerberg |
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2021 |
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1 |
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— |
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— |
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26,823,060(4)
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26,823,061 |
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Chief Executive Officer |
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2020 |
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1 |
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— |
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— |
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25,288,264(4)
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25,288,265 |
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2019 |
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1 |
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— |
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— |
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23,415,972(4)
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23,415,973 |
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Sheryl K. Sandberg |
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2021 |
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954,615 |
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849,447 |
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22,169,902 |
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11,274,937(5)
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35,248,901 |
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Chief Operating Officer |
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2020 |
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918,077 |
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946,767 |
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14,370,187 |
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8,518,973(5)
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24,754,004 |
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2019 |
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875,385 |
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902,740 |
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19,678,923 |
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5,687,099(5)
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27,144,147 |
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David M. Wehner |
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2021 |
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855,385 |
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1,083,678 |
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22,169,902 |
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243,537(6)
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24,352,502 |
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Chief Financial Officer |
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2020 |
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823,846 |
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849,592 |
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14,370,187 |
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97,612(6)
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16,141,237 |
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2019 |
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785,385 |
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809,928 |
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19,678,923 |
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59,800(6)
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21,334,036 |
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Christopher K. Cox |
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2021 |
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855,385 |
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4,841,803(7)
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22,169,902 |
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1,209,604(8)
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29,076,694 |
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Chief Product Officer |
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2020 |
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421,385 |
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691,334 |
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67,999,256(9)
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570,679(8)
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69,682,654 |
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2019 |
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408,981(10)
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— |
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— |
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9,500(8)
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418,481 |
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Marne Levine |
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2021 |
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729,808 |
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643,294 |
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24,941,213 |
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76,253(11)
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26,390,568 |
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Chief Business Officer |
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(1)Reflects
actual earnings for 2021, 2020, and 2019, which may differ from
approved 2021, 2020, and 2019 base salaries due to the effective
dates of salary increases.
(2)The
amounts reported in the “Bonus” column represent discretionary
bonuses earned pursuant to our Bonus Plan. For more information
about our executive officers’ discretionary bonuses and our Bonus
Plan, see the section entitled “—Compensation Discussion and
Analysis—Elements of Executive Compensation—Cash Bonuses”
above.
(3)The
amounts reflect the aggregate grant date fair value of the RSUs
computed in accordance with ASC 718. This amount does not reflect
the actual economic value realized by the named executive officer.
For additional information on the RSUs granted to our named
executive officers in 2021, see the section entitled “—2021 Grants
of Plan-Based Awards” below.
(4)The
amounts reported include approximately $15,195,103, $13,439,634,
and $10,463,717 in 2021, 2020, and 2019, respectively, for costs
related to personal security for Mr. Zuckerberg at his residences
and during personal travel pursuant to Mr. Zuckerberg’s overall
security program. The amounts reported for each year also include
an annual pre-tax allowance of $10,000,000 to cover additional
costs related to Mr. Zuckerberg and his family’s personal security.
The amounts reported also include approximately $1,627,957,
$1,848,630, and $2,952,255 in 2021, 2020, and 2019, respectively,
for costs related to personal usage of private aircraft. For
purposes of reporting the value of personal usage of private
aircraft in this table, we use costs provided by the applicable
charter company, which include passenger fees, fuel, crew, and
catering costs. For more information regarding Mr. Zuckerberg’s
overall security program, annual security allowance, and personal
usage of private aircraft, see the section entitled “—Compensation
Discussion and Analysis—Perquisites and Other Benefits”
above.
(5)The
amounts reported include approximately $8,981,973, $7,646,560, and
$4,370,631 in 2021, 2020, and 2019, respectively, for costs related
to personal security for Ms. Sandberg at her residences and during
personal travel pursuant to Ms. Sandberg’s overall security
program; and approximately $2,292,964, $872,413, and $1,316,468 in
2021, 2020, and 2019, respectively, for costs related to personal
usage of private aircraft. For purposes of reporting the value of
personal usage of private aircraft in this table, we use costs
provided by the applicable charter company, which include passenger
fees, fuel, crew, and catering costs. For more information
regarding Ms. Sandberg’s overall security program and personal
usage of private aircraft, see the section entitled “—Compensation
Discussion and Analysis—Perquisites and Other Benefits”
above.
(6)The
amounts reported include approximately $118,636 and $41,496 in 2021
and 2020, respectively, for costs related to personal security
services and $114,751 and $46,141 in 2021 and 2020, respectively,
for associated tax gross-ups for taxable personal security
services; a pre-tax allowance of $50,000 to cover costs related to
personal security in 2019; and $10,150, $9,975, and $9,800 in 2021,
2020, and 2019, respectively, in company 401(k) matching
contributions.
(7)The
amount reported includes $841,803 in discretionary bonuses earned
pursuant to our Bonus Plan and a $4,000,000 payment that became
payable during 2021 pursuant to the terms of a sign-on bonus. For
more information regarding these bonuses, see the section entitled
“—Compensation Discussion and Analysis—Elements of Executive
Compensation—Cash Bonuses” above.
(8)The
amounts reported include approximately $568,131 and $265,600 in
2021 and 2020, respectively, for costs related to personal security
services and $631,723 and $295,329 in 2021 and 2020, respectively,
for associated tax gross-ups for taxable personal security
services; and $9,750, $9,750, and $9,500 in 2021, 2020, and 2019,
respectively, in company 401(k) matching
contributions.
(9)The
amount reported reflects the aggregate grant date fair value of Mr.
Cox’s initial RSU award in connection with his re-joining our
company in June 2020.
(10)Includes
$90,000 in fees under our advisory services agreement with Mr. Cox,
which agreement provided for Mr. Cox to serve as a strategic
advisor to us following his resignation as our CPO in April 2019
through the end of 2019.
(11)The
amount reported includes approximately $31,300 for costs related to
personal security services and $34,803 for an associated tax
gross-up for taxable personal security services in 2021; and
$10,150 in company 401(k) matching contributions in
2021.
2021 Grants of Plan-Based Awards Table
The following table presents, for each of the named executive
officers, information concerning each grant of an equity award made
during the year ended December 31, 2021. This information
supplements the information about these awards set forth in the
2021 Summary Compensation Table.
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Name |
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Grant Date |
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All Other Stock Awards: Number of Shares of
Stock or Units (#) |
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Grant Date Fair Value of Stock Awards ($) |
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Mark Zuckerberg |
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— |
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— |
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— |
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Sheryl K. Sandberg |
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3/22/2021 |
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75,526(1)
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22,169,902(2)
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David M. Wehner |
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3/22/2021 |
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75,526(3)
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22,169,902(2)
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Christopher K. Cox |
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3/22/2021 |
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75,526(4)
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22,169,902(2)
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Marne L. Levine |
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3/22/2021 |
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47,204(5)
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13,856,262(2)
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3/22/2021 |
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37,763(6)
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11,084,951(2)
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(1)The
vesting condition was satisfied as to 1/16th of the total shares
underlying the RSUs on February 15, 2022. The remaining shares
underlying the RSUs vest at a rate of 1/16th of the total number of
shares underlying the RSUs each quarter thereafter, subject to
continued service to us through each vesting date.
(2)Amounts
reflect the grant date fair value of the RSUs of $293.54 per share,
computed in accordance with ASC 718. This amount does not reflect
the actual economic value realized by the named executive
officer.
(3)The
vesting condition was satisfied as to 1/16th of the total shares
underlying the RSUs on November 15, 2021. The remaining shares
underlying the RSUs vest at a rate of 1/16th of the total number of
shares underlying the RSUs each quarter thereafter, subject to
continued service to us through each vesting date.
(4)The
vesting condition was satisfied as to 1/16th of the total shares
underlying the RSUs on May 15, 2021. The remaining shares
underlying the RSUs vest at a rate of 1/16th of the total number of
shares underlying the RSUs each quarter thereafter, subject to
continued service to us through each vesting date.
(5)The
vesting condition was satisfied as to 1/16th of the total shares
underlying the RSUs on November 15, 2021. The remaining shares
underlying the RSUs vest at a rate of 1/16th of the total number of
shares underlying the RSUs each quarter thereafter, subject to
continued service to us through each vesting date.
(6)The
vesting condition will be satisfied as to 1/20th of the total
shares underlying the RSUs on February 15, 2024. The remaining
shares underlying the RSUs vest at a rate of 1/20th of the total
number of shares underlying the RSUs each quarter thereafter,
subject to continued service to us through each vesting
date.
2021 Outstanding Equity Awards At Year-End Table
The following table presents, for each of the named executive
officers, information regarding outstanding stock options and RSUs
held as of December 31, 2021.
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Name |
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Stock Awards |
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Grant Date(1)
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Number of Shares or Units of Stock That Have Not Vested
(#) |
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Market Value of Shares or Units of Stock That Have Not
Vested($)(2)
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Mark Zuckerberg |
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— |
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— |
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— |
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Sheryl K. Sandberg |
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3/15/2016 |
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67,459(3)
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22,689,835 |
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3/15/2017 |
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37,705(4)
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12,682,077 |
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3/20/2018 |
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41,088(5)
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13,819,949 |
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3/20/2019 |
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37,172(6)
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12,502,802 |
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3/20/2020 |
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83,978(7)
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28,246,000 |
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3/22/2021 |
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75,526(8)
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25,403,170 |
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David M. Wehner |
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3/20/2018 |
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54,783(9)
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18,426,262 |
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3/20/2019 |
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59,475(10)
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20,004,416 |
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3/20/2020 |
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71,981(11)
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24,210,809 |
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3/22/2021 |
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70,806(12)
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23,815,598 |
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Christopher K. Cox |
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7/20/2020 |
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184,716(13)
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62,129,227 |
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3/22/2021 |
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61,365(14)
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20,640,118 |
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Marne L. Levine |
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3/16/2015 |
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16,510(15)
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5,553,139 |
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3/15/2016 |
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11,245(16)
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3,782,256 |
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3/15/2017 |
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9,427(17)
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3,170,771 |
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3/20/2018 |
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6,848(18)
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2,303,325 |
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3/20/2019 |
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18,586(19)
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6,251,401 |
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3/20/2020 |
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26,993(20)
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9,079,096 |
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3/22/2021 |
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44,254(21)
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14,884,833 |
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3/22/2021 |
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37,763(22)
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12,701,585 |
(1)All
of the outstanding equity awards described in the footnotes below
were granted under our 2012 Equity Incentive Plan.
(2)Represents
the market value of the shares underlying the RSUs as of December
31, 2021, based on the official closing price of our Class A common
stock, as reported on The Nasdaq Global Select Market, of $336.35
per share on December 31, 2021.
(3)1/16th
of the total shares underlying the RSUs vested on August 15, 2019.
The remaining shares underlying the RSUs vest at a rate of 1/16th
of the total number of shares underlying the RSUs each quarter
thereafter, subject to continued service to us through each vesting
date.
(4)1/16th
of the total shares underlying the RSUs vested on February 15,
2019. The remaining shares underlying the RSUs vest at a rate of
1/16th of the total number of shares underlying the RSUs each
quarter thereafter, subject to continued service to us through each
vesting date.
(5)1/16th
of the total shares underlying the RSUs vested on August 15, 2019.
The remaining shares underlying the RSUs vest at a rate of 1/16th
of the total number of shares underlying the RSUs each quarter
thereafter, subject to continued service to us through each vesting
date.
(6)1/16th
of the total shares underlying the RSUs vested on May 15, 2019. The
remaining shares underlying the RSUs vest at a rate of 1/16th of
the total number of shares underlying the RSUs each quarter
thereafter, subject to continued service to us through each vesting
date.
(7)1/16th
of the total shares underlying the RSUs vested on August 15, 2021.
The remaining shares underlying the RSUs vest at a rate of 1/16th
of the total number of shares underlying the RSUs each quarter
thereafter, subject to continued service to us through each vesting
date.
(8)1/16th
of the total shares underlying the RSUs vested on February 15,
2022. The remaining shares underlying the RSUs vest at a rate of
1/16th of the total number of shares underlying the RSUs each
quarter thereafter, subject to continued service to us through each
vesting date.
(9)1/16th
of the total shares underlying the original RSU grant vested on
February 15, 2020. The remaining shares underlying the RSUs vest at
a rate of 1/16th of the total number of shares underlying the RSUs
each quarter thereafter, subject to continued service to us through
each vesting date.
(10)1/16th
of the total shares underlying the original RSU grant vested on
February 15, 2020. The remaining shares underlying the RSUs vest at
a rate of 1/16th of the total number of shares underlying the RSUs
each quarter thereafter, subject to continued service to us through
each vesting date.
(11)1/16th
of the total shares underlying the original RSU grant vested on
February 15, 2021. The remaining shares underlying the RSUs vest at
a rate of 1/16th of the total number of shares underlying the RSUs
each quarter thereafter, subject to continued service to us through
each vesting date.
(12)1/16th
of the total shares underlying the original RSU grant vested on
November 15, 2021. The remaining shares underlying the RSUs vest at
a rate of 1/16th of the total number of shares underlying the RSUs
each quarter thereafter, subject to continued service to us through
each vesting date.
(13)1/12th
of the total shares underlying the original RSU grant vested on
November 15, 2020. The remaining shares underlying the RSUs vest at
a rate of 1/16th of the total number of shares underlying the RSUs
each quarter thereafter, not to exceed 14 quarterly installments,
with the final 2/48ths of the total shares vesting on August 15,
2024, subject to continued service to us through each vesting
date.
(14)1/16th
of the total shares underlying the original RSU grant vested on May
15, 2021. The remaining shares underlying the RSUs vest at a rate
of 1/16th of the total number of shares underlying the RSUs each
quarter thereafter, subject to continued service to us through each
vesting date.
(15)1/16th
of the total shares underlying the original RSU grant vested on
February 15, 2019. The remaining shares underlying the RSUs vest at
a rate of 1/16th of the total number of shares underlying the RSUs
each quarter thereafter, subject to continued service to us through
each vesting date.
(16)1/16th
of the total shares underlying the original RSU grant vested on
February 15, 2019. The remaining shares underlying the RSUs vest at
a rate of 1/16th of the total number of shares underlying the RSUs
each quarter thereafter, subject to continued service to us through
each vesting date.
(17)1/16th
of the total shares underlying the original RSU grant vested on
February 15, 2019. The remaining shares underlying the RSUs vest at
a rate of 1/16th of the total number of shares underlying the RSUs
each quarter thereafter, subject to continued service to us through
each vesting date
(18)1/16th
of the total shares underlying the original RSU grant vested on
February 15, 2019. The remaining shares underlying the RSUs vest at
a rate of 1/16th of the total number of shares underlying the RSUs
each quarter thereafter, subject to continued service to us through
each vesting date.
(19)1/16th
of the total shares underlying the original RSU grant vested on May
15, 2019. The remaining shares underlying the RSUs vest at a rate
of 1/16th of the total number of shares underlying the RSUs each
quarter thereafter, subject to continued service to us through each
vesting date.
(20)1/16th
of the total shares underlying the original RSU grant vested on May
15, 2020. The remaining shares underlying the RSUs vest at a rate
of 1/16th of the total number of shares underlying the RSUs each
quarter thereafter, subject to continued service to us through each
vesting date.
(21)1/16th
of the total shares underlying the original RSU grant vested on
November 15, 2021. The remaining shares underlying the RSUs vest at
a rate of 1/16th of the total number of shares underlying the RSUs
each quarter thereafter, subject to continued service to us through
each vesting date.
(22)1/20th
of the total shares underlying the original RSU grant will vest on
February 15, 2024. The remaining shares underlying the RSUs vest at
a rate of 1/20th of the total number of shares underlying the RSUs
each quarter thereafter, subject to continued service to us through
each vesting date.
On March 14, 2022, our compensation, nominating & governance
committee approved RSU grants to certain of our named executive
officers. These RSUs were granted on March 21, 2022 as follows:
Sheryl K. Sandberg—87,524; David M. Wehner—87,524; Christopher K.
Cox—87,524; and Marne L. Levine—65,643. These RSUs will vest
quarterly based on continued employment over four years with a
vesting start date of February 15, 2022 for Ms. Sandberg, May 15,
2022 for Mr. Wehner, February 15, 2022 for Mr. Cox, and May 15,
2022 for Ms. Levine.
2021 Stock Vested
The following table presents, for each of the named executive
officers, the number of shares of our common stock acquired upon
the vesting and settlement of RSUs during 2021 and the aggregate
value realized upon the vesting and settlement of
RSUs.
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Name |
|
Stock Awards |
|
Number of Shares Acquired on
Vesting (#) |
|
Value Realized on Vesting ($)(1)
|
|
Mark Zuckerberg |
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— |
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— |
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Sheryl K. Sandberg |
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289,259 |
|
93,675,733 |
|
David M. Wehner |
|
95,269 |
|
30,331,274 |
|
Christopher K. Cox |
|
83,429 |
|
27,162,550 |
|
Marne L. Levine |
|
77,973 |
|
24,995,003 |
(1)The
aggregate value realized upon the vesting and settlement of an RSU
represents the aggregate market price of the shares of our Class A
common stock on the date of settlement.
Employment Agreements and Offer Letters
We have entered into employment agreements or offer letters with
each of the named executive officers. These agreements provide for
at-will employment and generally include the named executive
officer’s initial base salary, and an indication of eligibility for
an annual cash incentive award opportunity. In addition, each of
our named executive officers has executed a form of our standard
confidential information and invention assignment
agreement.
Mark Zuckerberg
We entered into an amended and restated offer letter with Mr.
Zuckerberg, our founder, Chairman, and CEO, in January 2012.
This offer letter agreement has no specific term and constitutes
at-will employment. Mr. Zuckerberg’s annual base salary as of
December 31, 2021 was $1, and he is not eligible to receive bonus
compensation under our Bonus Plan.
Sheryl K. Sandberg
We entered into an amended and restated employment agreement with
Ms. Sandberg, our COO and a member of our board of directors, in
January 2012. The employment agreement has no specific term and
constitutes at-will employment. Ms. Sandberg’s annual base salary
as of December 31, 2021 was $960,000, and she is eligible to
receive annual bonus compensation under our Bonus
Plan.
David M. Wehner
We entered into an amended and restated offer letter with Mr.
Wehner, our CFO, in August 2014. The offer letter agreement has no
specific term and constitutes at-will employment. Mr. Wehner’s
annual base salary as of December 31, 2021 was $860,000, and he is
eligible to receive annual bonus compensation under our Bonus
Plan.
Christopher K. Cox
We entered into an offer letter with Mr. Cox, our CPO, in June
2020. The offer letter agreement has no specific term and
constitutes at-will employment. Mr. Cox’s annual base salary as of
December 31, 2021 was $860,000, and he is eligible to receive
annual bonus compensation under our Bonus Plan. In addition, the
offer letter provided for a cash sign-on bonus in the aggregate
amount of $4,000,000, which was paid within 30 days after the
one-year anniversary of his employment start date.
Marne L. Levine
We entered into an amended and restated offer letter with Ms.
Levine, our CBO, in September 2021 in connection with her
promotion. The offer letter agreement has no specific term and
constitutes at-will employment. Ms. Levine’s annual base salary as
of December 31, 2021 was $732,500, and she is eligible to receive
annual bonus compensation under our Bonus Plan.
Potential Payments Upon Termination or Change in
Control
None of our named executive officers is entitled to payments or
acceleration of vesting with respect to equity awards held by such
named executive officers in connection with a termination or a
change in control. However, consistent with our policy that is
generally applicable to all employees, the designated beneficiaries
of each of our named executive officers are entitled to the
cash-out of outstanding unvested RSUs upon his or her death (up to
a maximum payout of $2,000,000 per officer).
Limitations on Liability and Indemnification Matters
Our amended and restated certificate of incorporation contains
provisions that limit the liability of our directors for monetary
damages to the fullest extent permitted by the Delaware General
Corporation Law. Consequently, our directors will not be personally
liable to us or our shareholders for monetary damages for any
breach of fiduciary duties as directors, except liability
for:
•any
breach of the director’s duty of loyalty to us or our
shareholders;
•any
act or omission not in good faith or that involves intentional
misconduct or a knowing violation of law;
•unlawful
payments of dividends or unlawful stock repurchases or redemptions
as provided in Section 174 of the Delaware General Corporation Law;
or
•any
transaction from which the director derived an improper personal
benefit.
Our amended and restated certificate of incorporation and amended
and restated bylaws require us to indemnify our directors and
executive officers made or threatened to be made a party to an
action or proceeding, by reason of the fact that he or she serves
or served in such capacity at our request to the maximum extent not
prohibited by the Delaware General Corporation Law or any other
applicable law and allow us to indemnify other officers, employees,
and other agents as set forth in the Delaware General Corporation
Law or any other applicable law.
We have entered, and intend to continue to enter, into separate
indemnification agreements with our directors, executive officers,
and other key employees, in addition to the indemnification
provided for in our amended and restated certificate of
incorporation, amended and restated bylaws and other applicable
law. These agreements, among other things, require us to indemnify
our directors, executive officers, and other key employees for
certain expenses, including attorneys’ fees, judgments, penalties,
fines, and settlement amounts actually and reasonably incurred by
such person in any action or proceeding arising out of their
services to us, or any of our subsidiaries or any other company or
enterprise to which the person provides services at our request,
including liability arising out of negligence or active or passive
wrongdoing by the officer, director or employee. We believe that
these charter provisions and indemnification agreements are
necessary to attract and retain qualified persons such as
directors, officers and key employees. We also maintain directors’
and officers’ liability insurance.
The limitation of liability and indemnification provisions in our
amended and restated certificate of incorporation and amended and
restated bylaws may discourage shareholders from bringing a lawsuit
against our directors and officers for breach of their fiduciary
duty. They may also reduce the likelihood of derivative litigation
against our directors and officers, even though an action, if
successful, might benefit us and other shareholders. Further, a
shareholder’s investment may be adversely affected to the extent
that we pay the costs of settlement and damage awards against
directors and officers as required by these indemnification
provisions.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended (Securities Act), may be
permitted to directors, executive officers or persons controlling
us, we have been informed that in the opinion of the SEC such
indemnification is against public policy as expressed in the
Securities Act and is therefore unenforceable.
CEO Pay Ratio
For the year ended December 31, 2021:
•the
median of the annual total compensation of all employees of our
company (other than our CEO) was $292,785; and
•the
annual total compensation of our CEO was $26,823,061.
Based on this information, for 2021, the ratio of the annual total
compensation of our CEO to the median of the annual total
compensation of all other employees was 92:1. We believe this ratio
is a reasonable estimate calculated in a manner consistent with
Item 402(u) of Regulation S-K under the Exchange Act.
As permitted by SEC rules, to identify our median employee for
2021, we selected total direct compensation as our consistently
applied compensation measure, which we calculated as actual salary
paid to our employees for 2021 (including overtime for hourly
employees), actual bonus or sales commission earned by our
employees in 2021, and the value of equity awards granted to our
employees in 2021. Further, we used October 31, 2021 to determine
our employee population and used the consistently applied
compensation measure as described above to determine our median
employee. In determining this population, we included all worldwide
full-time and part-time employees other than our CEO. We did not
include any contractors or workers employed through a third-party
provider in our employee population. For employees paid in other
than U.S. dollars, we converted their compensation to U.S. dollars
using the exchange rates used by us for various purposes in effect
on October 31, 2021.
Based on this approach, we selected the individual who represented
the median employee for 2021. We then calculated the annual total
compensation for this individual using the same methodology we used
for our named executive officers in our 2021 Summary Compensation
Table. Although we identified a new median employee for 2021, our
calculation methodology for 2021 was the same methodology used to
calculate our 2020 pay ratio.
During 2021, Mr. Zuckerberg served as our CEO, and per his request
received $1 in salary. He does not participate in our Bonus Plan
nor did he receive any equity awards. Therefore, his annual total
compensation as reported in our 2021 Summary Compensation Table
consisted almost entirely of costs related to personal security for
Mr. Zuckerberg at his residences and during personal travel
pursuant to his overall security program, his annual security
allowance, and costs related to personal usage of private aircraft.
For more information regarding these matters, see the section
entitled “Executive Compensation—Compensation Discussion and
Analysis—Perquisites and Other Benefits” above.
Report of the Compensation, Nominating & Governance
Committee
This report of the compensation, nominating & governance
committee is required by the SEC and, in accordance with the SEC’s
rules, will not be deemed to be part of or incorporated by
reference by any general statement incorporating by reference this
Information Statement into any filing under the Securities Act of
1933, as amended (Securities Act), or under the Securities Exchange
Act of 1934, as amended (Exchange Act), except to the extent that
we specifically incorporate this information by reference, and will
not otherwise be deemed “soliciting material” or “filed” under
either the Securities Act or the Exchange Act.
The compensation, nominating & governance committee has
reviewed and discussed the Compensation Discussion and Analysis
required by Item 402(b) of Regulation S-K with management and based
on such review and discussions, the compensation, nominating &
governance committee recommended to our board of directors that the
Compensation Discussion and Analysis be included in this
Information Statement.
The Compensation, Nominating & Governance
Committee
Peggy Alford (Chair)
Marc L. Andreessen
Andrew W. Houston
Tony Xu
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The following table sets forth certain information with respect to
the beneficial ownership of our common stock as of December 1,
2022, for:
•each
shareholder known by us to be the beneficial owner of more than 5%
of our outstanding shares of Class A common stock or Class B common
stock;
•each
of our directors;
•each
of our named executive officers; and
•all
of our current directors and executive officers as a
group.
We have determined beneficial ownership in accordance with the
rules of the SEC. Except as indicated by the footnotes below, we
believe, based on the information furnished to us, that the persons
and entities named in the following table have sole voting and
investment power with respect to all shares of Class A common stock
or Class B common stock that they beneficially own, subject to
applicable community property laws.
Applicable percentage ownership is based on 2,262,943,111 shares of
Class A common stock and 366,876,470 shares of Class B common stock
outstanding at December 1, 2022. In computing the number of shares
of common stock beneficially owned by a person and the percentage
ownership of that person, we deemed to be outstanding all shares of
common stock subject to options, restricted stock units (RSUs) or
other convertible securities held by that person that are currently
exercisable or releasable or that will become exercisable or
releasable within 60 days of December 1, 2022. We did not deem
these shares outstanding, however, for the purpose of computing the
percentage ownership of any other person. Unless otherwise
indicated, the address of each beneficial owner listed in the
following table is c/o Meta Platforms, Inc., 1601 Willow Road,
Menlo Park, California 94025.
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Shares Beneficially Owned
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% of Total Voting Power(1)
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Class A
|
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Class B
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Name of Beneficial Owner |
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Shares |
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% |
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Shares |
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% |
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|
Named Executive Officers and Directors:
|
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Mark Zuckerberg(2)
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831,706 |
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* |
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349,745,790
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95.3
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59.0 |
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Shares subject to voting proxy(3)
|
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—
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—
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16,297,639
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4.4
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2.7 |
|
Total(2)(3)
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831,706
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* |
|
366,043,429
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99.8
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61.7 |
|
Sheryl K. Sandberg(4)
|
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1,496,026
|
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* |
|
—
|
|
—
|
|
* |
|
David M. Wehner(5)
|
|
76,356
|
|
* |
|
—
|
|
—
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|
* |
|
Christopher K. Cox(6)
|
|
325,157
|
|
* |
|
—
|
|
—
|
|
* |
|
Marne L. Levine
|
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27,453
|
|
* |
|
—
|
|
—
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|
* |
|
Peggy Alford(7)
|
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4,947
|
|
* |
|
—
|
|
—
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|
* |
|
Marc L. Andreessen(8)
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45,380
|
|
* |
|
—
|
|
—
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|
* |
|
Andrew W. Houston
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6,478
|
|
* |
|
—
|
|
—
|
|
* |
|
Nancy Killefer
|
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6,196
|
|
* |
|
—
|
|
—
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|
* |
|
Robert M. Kimmitt
|
|
6,129
|
|
* |
|
—
|
|
—
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|
* |
|
Tracey T. Travis
|
|
6,196
|
|
* |
|
—
|
|
—
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|
* |
|
Tony Xu
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972
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* |
|
—
|
|
—
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|
* |
|
All current executive officers and directors as a group (16
persons)(9)
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2,998,518
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* |
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366,043,429
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99.8 |
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61.8 |
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Other 5% Shareholders: |
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Entities affiliated with BlackRock(10)
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158,128,797
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7.0
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|
—
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—
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2.7 |
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Entities affiliated with Vanguard(11)
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181,965,468
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8.0
|
|
—
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|
—
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3.1 |
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Entities affiliated with FMR LLC(12)
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128,193,375
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5.7
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—
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—
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|
2.2 |
* Less than 1%.
(1)Percentage
of total voting power represents voting power with respect to all
shares of our Class A common stock and Class B common stock, as a
single class. The holders of our Class B common stock are entitled
to ten votes per share, and holders of our Class A common stock are
entitled to one vote per share.
(2)Consists
of (i) 4,392,197 shares of Class B common stock held of record by
Mark Zuckerberg, Trustee of The Mark Zuckerberg Trust dated July 7,
2006 (2006 Trust); (ii) 599,306 shares of Class A common stock and
1,908,602 shares of Class B common stock held of record by Chan
Zuckerberg Initiative Foundation (CZIF); (iii) 232,400 shares of
Class A common stock held of record by Chan Zuckerberg Initiative
Advocacy (CZIA); and (iv) 343,444,991 shares of Class B common
stock held of record by CZI Holdings, LLC (CZI). The 2006 Trust is
the sole member of CZI. Mr. Zuckerberg is the sole trustee of the
2006 Trust and, therefore, is deemed to have sole voting and
investment power over the securities held by CZI. Mr. Zuckerberg
has sole voting and investment power over the securities held by
CZIF and CZIA, but no pecuniary interest in these
securities.
(3)Consists
of shares of our Class B common stock beneficially owned by
shareholders affiliated with Dustin Moskovitz over which, except
under limited circumstances, Mr. Zuckerberg holds an irrevocable
proxy, pursuant to a voting agreement between Mr. Zuckerberg, us,
and such shareholders, with respect to certain matters. Mr.
Zuckerberg also holds an irrevocable proxy, pursuant to such voting
agreement, over certain shares of our Class A common stock held by
such shareholders. Such shareholders have not furnished us with
ownership information with respect to shares of Class A common
stock or Class B common stock in connection with the preparation of
this Information Statement. We are not affiliated with Mr.
Moskovitz or any other person that has access to such ownership
information, so no such shares of Class A common stock are included
in the table above. We do not believe that the parties to the
voting agreement constitute a “group” under Section 13 of the
Securities Exchange Act of 1934, as amended, as Mr. Zuckerberg
exercises voting control over these shares.
(4)Consists
of (i) 746,026 shares of Class A common stock held of record by
Sheryl K. Sandberg, Trustee of Sheryl K. Sandberg Revocable Trust
UTA dated September 3, 2004; and (ii) 750,000 shares of Class A
common stock held of record by Sheryl K. Sandberg, Trustee of
Sheryl K. Sandberg 2022 Trust.
(5)Consists
of (i) 75,882 shares of Class A common stock held of record by Mr.
Wehner; and (ii) 18,249 shares of Class A common stock held of
record by Mr. Wehner’s spouse. Mr. Wehner may be deemed to share
voting and investment power over the securities held by his spouse.
Mr. Wehner disclaims beneficial ownership over the securities held
by his spouse.
(6)Consists
of (i) 270,111 shares of Class A common stock held of record by
Christopher K. Cox, Trustee of the Christopher K. Cox Revocable
Trust; and (ii) 55,046 shares of Class A common stock held of
record by The Cox-Vadakan Irrevocable Remainder Trust. Mr. Cox and
his spouse are the trustees of the Cox-Vadakan Irrevocable
Remainder Trust and may be deemed to share voting and investment
power over securities held thereby.
(7)Consists
of shares of Class A common stock held of record jointly by Ms.
Alford and her spouse as trustees of the Alford Family Revocable
Trust.
(8)Consists
of shares of Class A common stock held of record by the LAMA
Community Trust (LAMA). Mr. Andreessen and his spouse are the
trustees of LAMA and may be deemed to share voting and investment
power over the securities held by LAMA. The address of LAMA is 2865
Sand Hill Road, Suite 101, Menlo Park, California
94025.
(9)Consists
of (i) 2,998,518 shares of Class A common stock; and (ii)
366,043,429 shares of Class B common stock. In addition to the
instances of shared voting and investment power noted above,
includes (i) 6,363 shares of Class A common stock held by an
executive officer’s spouse; (ii) 43,453 shares of Class A common
stock held by a trust for which the executive officer’s spouse
serves as the trustee or the executive officer and his or her
spouse serve as co-trustees; and (iii) 11,621 shares of Class A
common stock held by entities over which the executive officer’s
spouse has, or the executive officer and his or her spouse share,
voting and investment power over securities held by such
entities.
(10)Based
on information reported by BlackRock, Inc. on Schedule 13G/A filed
with the SEC on February 7, 2022, BlackRock, Inc. reported that it
has sole dispositive power with respect to all shares and sole
voting power with respect to 134,969,820 shares. BlackRock, Inc.
listed its address as 55 East 52nd Street, New York, New York
10055.
(11)Based
on information reported by The Vanguard Group on Schedule 13G/A
filed with the SEC on February 10, 2022, The Vanguard Group
reported that it has sole dispositive power with respect to
172,134,517 shares, shared dispositive power with respect to
9,830,951 shares, and shared voting power with respect to 4,017,828
shares. The Vanguard Group listed its address as 100 Vanguard
Blvd., Malvern, Pennsylvania 19355.
(12)Based
on information reported by FMR LLC on Schedule 13G/A filed with the
SEC on February 9, 2022, FMR LLC reported that it has sole
dispositive power with respect to all shares and sole voting power
with respect to 23,822,294 shares. FMR LLC listed its address as
245 Summer Street, Boston, Massachusetts 02210.
DISTRIBUTION AND COSTS
We will pay the cost of preparing and distributing this Information
Statement. The SEC has adopted rules that permit companies and
intermediaries (e.g., brokers) to satisfy the delivery requirements
for this Information Statement with respect to two or more
shareholders sharing the same address by delivering a single
Information Statement addressed to those shareholders. This
process, which is commonly referred to as “householding,” is
intended to provide extra convenience for shareholders and cost
savings for companies.
We and a number of brokers with account holders who are our
shareholders will be householding this Information Statement. We
will deliver a single Information Statement to multiple
shareholders sharing an address unless contrary instructions have
been received from the affected shareholders. If, at any time, you
no longer wish to participate in householding and would prefer to
receive a separate Information Statement, or if you are receiving
multiple Information Statements and would like to participate in
householding, please notify your broker, bank or other nominee if
you are a beneficial shareholder or notify us if you are a
registered shareholder. Registered shareholders can notify us by
sending a written request to Meta Platforms, Inc., c/o Broadridge
Householding Department, 51 Mercedes Way, Edgewood, New York 11717,
or by calling 1-866-540-7095, and we will promptly deliver any
additional Information Statements requested.
AVAILABLE INFORMATION
We are subject to the informational requirements of the Securities
Exchange Act of 1934, as amended, and file or furnish reports,
proxy statements, and other information with the SEC. Such reports
and other information filed by us with the SEC are available free
of charge on our website at investor.fb.com when such reports are
available on the SEC’s website. The SEC maintains an Internet site
that contains reports, proxy and information statements, and other
information regarding issuers that file electronically with the SEC
at www.sec.gov. The content of the websites referred to in this
Information Statement and any related notice are not incorporated
herein or therein. Our references to the URLs for any websites
presented are intended to be inactive textual references
only.
NOTE ABOUT FORWARD-LOOKING STATEMENTS
This Information Statement contains forward-looking statements. All
statements contained in this Information Statement other than
statements of historical fact, including statements regarding our
future results of operations and financial position, our business
strategy and plans, and our objectives for future operations, are
forward-looking statements. The words “believe,” “may,” “will,”
“estimate,” “continue,” “anticipate,” “intend,” “expect,” and
similar expressions are intended to identify forward-looking
statements. We have based these forward-looking statements largely
on our current expectations and projections about future events and
trends that we believe may affect our financial condition, results
of operations, business strategy, short-term and long-term business
operations and objectives, and financial needs. These
forward-looking statements are subject to a number of risks,
uncertainties, and assumptions, including those described in our
Quarterly Report on Form 10-Q for the quarter ended September 30,
2022. Moreover, we operate in a very competitive and rapidly
changing environment. New risks emerge from time to time. It is not
possible for our management to predict all risks, nor can we assess
the impact of all factors on our business or the extent to which
any factor, or combination of factors, may cause actual results to
differ materially from those contained in any forward-looking
statements we may make. In light of these risks, uncertainties, and
assumptions, the future events and trends discussed in this
Information Statement may not occur and actual results could differ
materially and adversely from those anticipated or implied in the
forward-looking statements. We undertake no obligation to revise or
publicly release the results of any revision to these
forward-looking statements, except as required by law. Given these
risks and uncertainties, readers are cautioned not to place undue
reliance on such forward-looking statements.
Katherine R. Kelly
Vice President, Deputy General Counsel and Secretary
December [●], 2022
Appendix A-1
META PLATFORMS, INC. 2012 EQUITY INCENTIVE PLAN
META PLATFORMS, INC.
2012 EQUITY INCENTIVE PLAN
(as amended and restated on June 20, 2016 and amended on February
13, 2018)
1.PURPOSE.
The purpose of this Plan is to provide incentives to attract,
retain and motivate eligible persons whose present and potential
contributions are important to the success of the Company, and any
Parents, Subsidiaries and Affiliates that exist now or in the
future, by offering them an opportunity to participate in the
Company’s future performance through the grant of Awards.
Capitalized terms not defined elsewhere in the text are defined in
Section 27.
2.SHARES
SUBJECT TO THE PLAN.
2.1Number
of Shares Available.
Subject to Sections 2.6 and 21 and any other applicable provisions
hereof, the total number of Shares reserved and available for grant
and issuance pursuant to this Plan as of the date of adoption of
the Plan by the Board, is 25,000,000 Shares, plus (i) any reserved
shares not issued or subject to outstanding grants under the
Company’s 2005 Stock Plan (the “Prior
Plan”)
on the Effective Date, (ii) shares that are subject to stock
options or other awards granted under the Prior Plan that cease to
be subject to such stock options or other awards by forfeiture or
otherwise after the Effective Date, (iii) shares issued under the
Prior Plan before or after the Effective Date pursuant to the
exercise of stock options that are, after the Effective Date,
forfeited, (iv) shares issued under the Prior Plan that are
repurchased by the Company at the original issue price, and (v)
shares that are subject to stock options or other awards under the
Prior Plan that are used or withheld to pay the exercise price of
an option or to satisfy the tax withholding obligations related to
any award. Substitute Awards may be granted under the Plan and any
such grants shall not reduce the Shares authorized for grant under
the Plan.
2.2Lapsed,
Returned Awards.
Shares subject to Awards, and Shares issued under the Plan under
any Award, will again be available for grant and issuance in
connection with subsequent Awards of Common Stock under this Plan
to the extent such Shares: (a) are subject to issuance upon
exercise of an Option or SAR granted under this Plan but which
cease to be subject to the Option or SAR for any reason other than
exercise of the Option or SAR; (b) are subject to Awards granted
under this Plan that are forfeited or are repurchased by the
Company at the original issue price; (c) are subject to Awards
granted under this Plan that otherwise terminate without such
Shares being issued; or (d) are surrendered pursuant to an Exchange
Program. To the extent an Award under the Plan is paid out in cash
rather than Shares, such cash payment will not result in reducing
the number of Shares available for issuance under the Plan. Shares
used or withheld to pay the exercise price of an Award or to
satisfy the tax withholding obligations related to an Award will
become available for future grant or sale under the
Plan.
2.3Minimum
Share Reserve.
At all times the Company shall reserve and keep available a
sufficient number of Shares as shall be required to satisfy the
requirements of all outstanding Awards granted under this
Plan.
2.4Automatic
Share Reserve Increase.
The number of Shares available for grant and issuance under the
Plan shall be increased on January 1, of each of the ten (10)
calendar years during the term of the Plan following April 22,
2016, by the lesser of (i) two and one half percent (2.5%) of the
number of Shares issued and outstanding on each December 31
immediately prior to the date of increase or (ii) such number of
Shares determined by the Board.
2.5Limitations.
No more than 120,000,000 Shares shall be issued pursuant to the
exercise of ISOs.
2.6Adjustment
of Shares.
If the number of outstanding Shares is changed by a stock dividend,
recapitalization, stock split, reverse stock split, subdivision,
combination, reclassification or similar change in the capital
structure of the Company, without consideration, then (a) the
number of Shares reserved for issuance and future grant under the
Plan set forth in Section 2.1, (b) the Exercise Prices of and
number of Shares subject to outstanding Options and SARs, (c) the
number of Shares subject to other outstanding Awards, (d) the
maximum number of shares that may be issued as ISOs set forth in
Section 2.5, (e) the maximum number of Shares that may be issued to
an individual or to a new Employee in any one calendar year set
forth in Section 3 and (f) the number of Shares that are granted as
Awards to Non-Employee Directors as set forth in Section 12, shall
be proportionately adjusted, subject to any required action by the
Board or the stockholders of the Company and in compliance with
applicable securities laws; provided that fractions of a Share will
not be issued.
3.ELIGIBILITY.
ISOs may be granted only to Employees. All other Awards may be
granted to Employees, Consultants and Non-Employee Directors;
provided such Consultants and Non-Employee Directors render bona
fide services not in connection with the offer and sale of
securities in a capital-raising transaction. No Participant will be
eligible to receive more than 2,500,000 Shares in any calendar year
under this Plan pursuant to the grant of Awards except that new
Employees of the Company or of a Parent, Subsidiary or Affiliate
(including new Employees who are also officers and directors of the
Company or any Parent, Subsidiary or Affiliate) are eligible to
receive up to a maximum of 5,000,000 Shares in the calendar year in
which they commence their employment.
4.ADMINISTRATION.
4.1Committee
Composition; Authority.
This Plan will be administered by the Committee or by the Board
acting as the Committee. Subject to the general purposes, terms and
conditions of this Plan, and to the direction of the Board, the
Committee will have full power to implement and carry out this
Plan, except, however, the Board shall establish the terms for the
grant of an Award to Non-Employee Directors. The Committee will
have the authority to:
(a)construe
and interpret this Plan, any Award Agreement and any other
agreement or document executed pursuant to this Plan;
(b)prescribe,
amend and rescind rules and regulations relating to this Plan or
any Award;
(c)select
persons to receive Awards;
(d)determine
the form and terms and conditions, not inconsistent with the terms
of the Plan, of any Award granted hereunder. Such terms and
conditions include, but are not limited to, the exercise price, the
time or times when Awards may vest and be exercised (which may be
based on performance criteria), any vesting acceleration or waiver
of forfeiture restrictions, and any restriction or limitation
regarding any Award or the Shares relating thereto, based in each
case on such factors as the Committee will determine;
(e)determine
the number of Shares or other consideration subject to
Awards;
(f)determine
the Fair Market Value in good faith and interpret the applicable
provisions of this Plan and the definition of Fair Market Value in
connection with circumstances that impact the Fair Market Value, if
necessary;
(g)determine
the date of termination of a Participant’s employment or
services;
(h)determine
whether Awards will be granted singly, in combination with, in
tandem with, in replacement of, or as alternatives to, other Awards
under this Plan or any other incentive or compensation plan of the
Company or any Parent, Subsidiary or Affiliate;
(i)grant
waivers of Plan or Award conditions;
(j)determine
the vesting, exercisability and payment of Awards;
(k)correct
any defect, supply any omission or reconcile any inconsistency in
this Plan, any Award or any Award Agreement;
(l)determine
whether an Award has been earned;
(m)determine
the terms and conditions of any, and to institute any Exchange
Program;
(n)reduce
or waive any criteria with respect to Performance
Factors;
(o)adjust
Performance Factors to take into account changes in law and
accounting or tax rules as the Committee deems necessary or
appropriate to reflect the impact of extraordinary or unusual
items, events or circumstances to avoid windfalls or hardships
provided that such adjustments are consistent with the regulations
promulgated under Section 162(m) of the Code with respect to
persons whose compensation is subject to Section 162(m) of the
Code;
(p)adopt
rules and/or procedures (including the adoption of any subplan
under this Plan) relating to the operation and administration of
the Plan to accommodate requirements of local law and procedures
outside of the United States;
(q)make
all other determinations necessary or advisable for the
administration of this Plan; and
(r)delegate
any of the foregoing to a subcommittee consisting of one or more
executive officers pursuant to a specific delegation.
4.2Committee
Interpretation and Discretion.
Any determination made by the Committee with respect to any Award
shall be made in its sole discretion at the time of grant of the
Award or, unless in contravention of any express term of the Plan
or Award, at any later time, and such determination shall be final
and binding on the Company and all persons having an interest in
any Award under the Plan. Any dispute regarding the interpretation
of the Plan or any Award Agreement
shall be submitted by the Participant or Company to the Committee
for review. The resolution of such a dispute by the Committee shall
be final and binding on the Company and the Participant. The
Committee may delegate to one or more executive officers the
authority to review and resolve disputes with respect to Awards
held by Participants who are not Insiders, and such resolution
shall be final and binding on the Company and the
Participant.
4.3Section
162(m) of the Code and Section 16 of the Exchange
Act.
When necessary or desirable for an Award to qualify as
“performance-based compensation” under Section 162(m) of the Code
the Committee shall include at least two persons who are “outside
directors” (as defined under Section 162(m) of the Code) and at
least two (or a majority if more than two then serve on the
Committee) such “outside directors” shall approve the grant of such
Award and timely determine (as applicable) the Performance Period
and any Performance Factors upon which vesting or settlement of any
portion of such Award is to be subject. When required by Section
162(m) of the Code, prior to settlement of any such Award at least
two (or a majority if more than two then serve on the Committee)
such “outside directors” then serving on the Committee shall
determine and certify in writing the extent to which such
Performance Factors have been timely achieved and the extent to
which the Shares subject to such Award have thereby been earned.
Awards granted to Participants who are subject to Section 16 of the
Exchange Act must be approved by two or more “non-employee
directors” (as defined in the regulations promulgated under Section
16 of the Exchange Act). With respect to Participants whose
compensation is subject to Section 162(m) of the Code, and provided
that such adjustments are consistent with the regulations
promulgated under Section 162(m) of the Code, the Committee may
adjust the performance goals to account for changes in law and
accounting and to make such adjustments as the Committee deems
necessary or appropriate to reflect the impact of extraordinary or
unusual items, events or circumstances to avoid windfalls or
hardships, including without limitation (i) restructurings,
discontinued operations, other extraordinary items, and other
unusual or non-recurring charges, (ii) an event either not directly
related to the operations of the Company or not within the
reasonable control of the Company’s management, or (iii) a change
in accounting standards required by generally accepted accounting
principles.
4.4Documentation.
The Award Agreement for a given Award, the Plan and any other
documents may be delivered to, and accepted by, a Participant or
any other person in any manner (including electronic distribution
or posting) that meets applicable legal requirements.
4.5Foreign
Award Recipients.
Notwithstanding any provision of the Plan to the contrary, in order
to comply with the laws in other countries in which the Company and
its Subsidiaries or Affiliates operate or have employees or other
individuals eligible for Awards or to facilitate the offering and
administration of the Plan in such other countries, the Committee,
in its sole discretion, shall have the power and authority
to:
(i) determine which Subsidiaries and Affiliates shall be covered by
the Plan; (ii) determine which individuals outside the United
States are eligible to participate in the Plan; (iii) modify the
terms and conditions of any Award granted to or held by individuals
outside the United States to comply with applicable foreign laws or
facilitate the offering and administration of the Plan in view of
such foreign laws; (iv) establish subplans and modify exercise
procedures and other terms and procedures, to the extent the
Committee determines such actions to be necessary or advisable;
provided, however, that no such subplans and/or modifications shall
increase the share limitations contained in Section 2 hereof; and
(v) take any action, before or after an Award is made, that the
Committee determines to be necessary or advisable to obtain
approval or comply or facilitate compliance with any local
governmental regulatory exemptions or approvals. Notwithstanding
the foregoing, the Committee may not take any actions hereunder,
and no Awards shall be granted, that would violate the Exchange Act
or any other applicable United States securities law, the Code, or
any other applicable United States governing statute or
law.
5.OPTIONS.
The Committee may grant Options to eligible Employees, Consultants,
and Non- Employee Directors and will determine whether such Options
will be Incentive Stock Options within the meaning of the Code
(“ISOs”)
or Nonqualified Stock Options (“NQSOs”),
the number of Shares subject to the Option, the Exercise Price of
the Option, the period during which the Option may vest and be
exercised, and all other terms and conditions of the Option,
subject to the following:
5.1Option
Grant.
Each Option granted under this Plan will identify the Option as an
ISO or an NQSO. An Option may be, but need not be, awarded upon
satisfaction of such Performance Factors during any Performance
Period as are set out in advance in the Participant’s individual
Award Agreement. If the Option is being earned upon the
satisfaction of Performance Factors, then the Committee will: (x)
determine the nature, length and starting date of any Performance
Period for each Option; and (y) select from among the Performance
Factors to be used to measure the performance, if any. Performance
Periods may overlap and Participants may participate simultaneously
with respect to Options that are subject to different performance
goals and other criteria.
5.2Date
of Grant.
The date of grant of an Option will be the date on which the
Committee makes the determination to grant such Option, or a
specified future date. The Award Agreement and a copy of this Plan
will be delivered to the Participant within a reasonable time after
the granting of the Option.
5.3Exercise
Period.
Options may be vested and exercisable within the times or upon the
conditions as set forth in the Award Agreement governing such
Option;
provided,
however,
that no Option will be exercisable after the
expiration of ten (10) years from the date the Option is granted;
and
provided further
that no ISO granted to a person who, at the time the ISO is
granted, directly or by attribution owns more than ten percent
(10%) of the total combined voting power of all classes of stock of
the Company or of any Parent, Subsidiary or Affiliate
(“Ten
Percent Stockholder”)
will be exercisable after the expiration of five (5) years from the
date the ISO is granted. The Committee also may provide for Options
to become exercisable at one time or from time to time,
periodically or otherwise, in such number of Shares or percentage
of Shares as the Committee determines.
5.4Exercise
Price.
The Exercise Price of an Option will be determined by the Committee
when the Option is granted; provided that: (i) the Exercise Price
of an Option will be not less than one hundred percent (100%) of
the Fair Market Value of the Shares on the date of grant and (ii)
the Exercise Price of any ISO granted to a Ten Percent Stockholder
will not be less than one hundred ten percent (110%) of the Fair
Market Value of the Shares on the date of grant. Payment for the
Shares purchased may be made in accordance with Section 11 and the
Award Agreement and in accordance with any procedures established
by the Company.
5.5Method
of Exercise.
Any Option granted hereunder will be vested and exercisable
according to the terms of the Plan and at such times and under such
conditions as determined by the Committee and set forth in the
Award Agreement. An Option may not be exercised for a fraction of a
Share. An Option will be deemed exercised when the Company
receives: (i) notice of exercise (in such form as the Committee may
specify from time to time) from the person entitled to exercise the
Option, and (ii) full payment for the Shares with respect to which
the Option is exercised (together with applicable withholding
taxes). Full payment may consist of any consideration and method of
payment authorized by the Committee and permitted by the Award
Agreement and the Plan. Shares issued upon exercise of an Option
will be issued in the name of the Participant. Until the Shares are
issued (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company), no
right to vote or receive dividends or any other rights as a
stockholder will exist with respect to the Shares, notwithstanding
the exercise of the Option. The Company will issue (or cause to be
issued) such Shares promptly after the Option is exercised. No
adjustment will be made for a dividend or other right for which the
record date is prior to the date the Shares are issued, except as
provided in Section 2.6 of the Plan. Exercising an Option in any
manner will decrease the number of Shares thereafter available,
both for purposes of the Plan and for sale under the Option, by the
number of Shares as to which the Option is exercised.
5.6Termination.
The exercise of an Option will be subject to the following (except
as may be otherwise provided in an Award Agreement):
(a)If
the Participant is Terminated for any reason except for Cause or
the Participant’s death or Disability, then the Participant may
exercise such Participant’s Options only to the extent that such
Options would have been exercisable by the Participant on the
Termination Date no later than ninety
(90) days after the Termination Date (or such shorter time period
or longer time period not exceeding five (5) years as may be
determined by the Committee, with any exercise beyond three (3)
months after the Termination Date deemed to be the exercise of an
NQSO), but in any event no later than the expiration date of the
Options.
(b)If
the Participant is Terminated because of the Participant’s death
(or the Participant dies within ninety (90) days after a
Termination other than for Cause or because of the Participant’s
Disability), then the Participant’s Options may be exercised only
to the extent that such Options would have been exercisable by the
Participant on the Termination Date and must be exercised by the
Participant’s legal representative, or authorized assignee, no
later than twelve (12) months after the Termination Date (or such
shorter time period not less than six (6) months or longer time
period not exceeding five (5) years as may be determined by the
Committee), but in any event no later than the expiration date of
the Options.
(c)If
the Participant is Terminated because of the Participant’s
Disability, then the Participant’s Options may be exercised only to
the extent that such Options would have been exercisable by the
Participant on the Termination Date and must be exercised by the
Participant (or the Participant’s legal representative or
authorized assignee) no later than six (6) months after the
Termination Date (with any exercise beyond (a) three (3) months
after the Termination Date when the Termination is for a Disability
that
is not
a “permanent and total disability” as defined in Section 22(e)(3)
of the Code, or (b) twelve (12) months after the Termination Date
when the Termination is for a Disability that
is
a “permanent and total disability” as defined in Section 22(e)(3)
of the Code, deemed to be exercise of an NQSO), but in any event no
later than the expiration date of the Options.
(d)If
the Participant is terminated for Cause, then Participant’s Options
shall expire on such Participant’s Termination Date, or at such
later time and on such conditions as are determined by the
Committee, but in any no event later than the expiration date of
the Options. Unless otherwise provided in the Award Agreement,
Cause will have the meaning set forth in the Plan.
5.7Limitations
on Exercise.
The Committee may specify a minimum number of Shares that may
be
purchased on any exercise of an Option, provided that such minimum
number will not prevent any Participant from exercising the Option
for the full number of Shares for which it is then
exercisable.
5.8Limitations
on ISOs.
With respect to Awards granted as ISOs, to the extent that the
aggregate Fair Market Value of the Shares with respect to which
such ISOs are exercisable for the first time by the Participant
during any calendar year (under all plans of the Company and any
Parent, Subsidiary or Affiliate) exceeds one hundred thousand
dollars ($100,000), such Options will be treated as NQSOs. For
purposes of this Section 5.8, ISOs will be taken into account in
the order in which they were granted. The Fair Market Value of the
Shares will be determined as of the time the Option with respect to
such Shares is granted. In the event that the Code or the
regulations promulgated thereunder are amended after the Effective
Date to provide for a different limit on the Fair Market Value of
Shares permitted to be subject to ISOs, such different limit will
be automatically incorporated herein and will apply to any Options
granted after the effective date of such amendment.
5.9Modification,
Extension or Renewal.
The Committee may modify, extend or renew outstanding Options and
authorize the grant of new Options in substitution therefor,
provided that any such action may not, without the written consent
of a Participant, impair any of such Participant’s rights under any
Option previously granted. Any outstanding ISO that is modified,
extended, renewed or otherwise altered will be treated in
accordance with Section 424(h) of the Code. Subject to Section 18
of this Plan, by written notice to affected Participants, the
Committee may reduce the Exercise Price of outstanding Options
without the consent of such Participants;
provided,
however,
that the Exercise Price may not be reduced below the Fair Market
Value on the date the action is taken to reduce the Exercise
Price.
5.10No
Disqualification.
Notwithstanding any other provision in this Plan, no term of this
Plan relating to ISOs will be interpreted, amended or altered, nor
will any discretion or authority granted under this Plan be
exercised, so as to disqualify this Plan under Section 422 of the
Code or, without the consent of the Participant affected, to
disqualify any ISO under Section 422 of the Code.
6.RESTRICTED
STOCK AWARDS.
6.1Awards
of Restricted Stock.
A Restricted Stock Award is an offer by the Company to sell to an
eligible Employee, Consultant, or Non-Employee Director a number of
Shares that are subject to restrictions (“Restricted
Stock”).
The Committee will determine to whom an offer will be made, the
number of Shares the Participant may purchase, the Purchase Price,
the restrictions under which the Shares will be subject and all
other terms and conditions of the Restricted Stock Award, subject
to the Plan.
6.2Restricted
Stock Purchase Agreement.
All purchases under a Restricted Stock Award will be evidenced by
an Award Agreement. Except as may otherwise be provided in an Award
Agreement, a Participant accepts a Restricted Stock Award by
signing and delivering to the Company an Award Agreement with full
payment of the Purchase Price, within thirty (30) days from the
date the Award Agreement was delivered to the Participant. If the
Participant does not accept such Award within thirty (30) days,
then the offer of such Restricted Stock Award will terminate,
unless the Committee determines otherwise.
6.3Purchase
Price.
The Purchase Price for a Restricted Stock Award will be determined
by the Committee and may be less than Fair Market Value on the date
the Restricted Stock Award is granted. Payment of the Purchase
Price must be made in accordance with Section 11 of the Plan, and
the Award Agreement and in accordance with any procedures
established by the Company.
6.4Terms
of Restricted Stock Awards.
Restricted Stock Awards will be subject to such restrictions as the
Committee may impose or are required by law. These restrictions may
be based on completion of a specified number of years of service
with the Company or any Parent, Subsidiary or Affiliate or upon
completion of Performance Factors, if any, during any Performance
Period as set out in advance in the Participant’s Award Agreement.
Prior to the grant of a Restricted Stock Award, the Committee
shall:
(a)determine
the nature, length and starting date of any Performance Period for
the Restricted Stock Award;
(b)select
from among the Performance Factors to be used to measure
performance goals, if any; and (c) determine the number of Shares
that may be awarded to the Participant. Performance Periods may
overlap and a Participant may participate simultaneously with
respect to Restricted Stock Awards that are subject to different
Performance Periods and having different performance goals and
other criteria.
6.5Termination.
Except as may be set forth in the Participant’s Award Agreement,
vesting ceases on such Participant’s Termination Date (unless
determined otherwise by the Committee).
7.STOCK
BONUS AWARDS.
7.1.Awards
of Stock Bonuses.
A Stock Bonus Award is an award to an eligible Employee,
Consultant, or Non-Employee Director of Shares for services to be
rendered or for past services already rendered to the Company or
any Parent, Subsidiary or Affiliate. All Stock Bonus Awards shall
be made pursuant to an Award Agreement. No payment from the
Participant will be required for Shares awarded pursuant to a Stock
Bonus Award.
7.2.Terms
of Stock Bonus Awards.
The Committee will determine the number of Shares to be awarded to
the Participant under a Stock Bonus Award and any restrictions
thereon. These restrictions may be based upon completion of a
specified number of years of service with the Company or upon
satisfaction of performance goals based on Performance Factors
during any Performance Period as set out in advance in the
Participant’s Stock Bonus Agreement. Prior to the grant of any
Stock Bonus Award the Committee shall:
(a) determine the nature, length and starting date of any
Performance Period for the Stock Bonus Award; (b) select from among
the Performance Factors to be used to measure performance goals;
and (c) determine the number of Shares that may be awarded to the
Participant. Performance Periods may overlap and a Participant may
participate simultaneously with respect to Stock Bonus Awards that
are subject to different Performance Periods and different
performance goals and other criteria.
7.3Form
of Payment to Participant.
Payment may be made in the form of cash, whole Shares, or a
combination thereof, based on the Fair Market Value of the Shares
earned under a Stock Bonus Award on the date of payment, as
determined in the sole discretion of the Committee.
7.4Termination.
Except as may be set forth in the Participant’s Award Agreement,
vesting ceases on such Participant’s Termination Date (unless
determined otherwise by the Committee).
8.STOCK
APPRECIATION RIGHTS.
8.1Awards
of SARs.
A Stock Appreciation Right (“SAR”) is an award to an eligible
Employee, Consultant, or Non-Employee Director that may be settled
in cash or Shares (which may consist of Restricted Stock), having a
value equal to (a) the difference between the Fair Market Value on
the date of exercise over the Exercise Price multiplied by (b) the
number of Shares with respect to which the SAR is being settled
(subject to any maximum number of Shares that may be issuable as
specified in an Award Agreement). All SARs shall be made pursuant
to an Award Agreement.
8.2Terms
of SARs.
The Committee will determine the terms of each SAR including,
without limitation: (a) the number of Shares subject to the SAR;
(b) the Exercise Price and the time or times during which the SAR
may be settled; (c) the consideration to be distributed on
settlement of the SAR; and (d) the effect of the Participant’s
Termination on each SAR. The Exercise Price of the SAR will be
determined by the Committee when the SAR is granted, and may not be
less than Fair Market Value. A SAR may be awarded upon satisfaction
of Performance Factors, if any, during any Performance Period as
are set out in advance in the Participant’s individual Award
Agreement. If the SAR is being earned upon the satisfaction of
Performance Factors, then the Committee will: (x) determine the
nature, length and starting date of any Performance Period for each
SAR; and (y) select from among the Performance Factors to be used
to measure the performance, if any. Performance Periods may overlap
and Participants may participate simultaneously with respect to
SARs that are subject to different Performance Factors and other
criteria.
8.3Exercise
Period and Expiration Date.
A SAR will be exercisable within the times or upon the occurrence
of events determined by the Committee and set forth in the Award
Agreement governing such SAR. The SAR Agreement shall set forth the
expiration date; provided that no SAR will be exercisable after the
expiration of ten (10) years from the date the SAR is granted. The
Committee may also provide for SARs to become exercisable at one
time or from time to time, periodically or otherwise (including,
without limitation, upon the attainment during a Performance Period
of performance goals based on Performance Factors), in such number
of Shares or percentage of the Shares subject to the SAR as the
Committee determines. Except as may be set forth in the
Participant’s Award Agreement, vesting ceases on such Participant’s
Termination Date (unless determined otherwise by the Committee).
Notwithstanding the foregoing, the rules of Section 5.6 also will
apply to SARs.
8.4Form
of Settlement.
Upon exercise of a SAR, a Participant will be entitled to receive
payment from the Company in an amount determined by multiplying (i)
the difference between the Fair Market Value of a Share on the date
of exercise over the Exercise Price; times (ii) the number of
Shares with respect to which the SAR is exercised. At the
discretion of the Committee, the payment from the Company for the
SAR exercise may be in cash, in Shares of equivalent value, or in
some combination thereof. The portion of a SAR being settled may be
paid currently or on a deferred basis with such interest or
dividend equivalent, if any, as the Committee determines, provided
that the terms of the SAR and any deferral satisfy the requirements
of Section 409A of the Code.
8.5Termination.
Except as may be set forth in the Participant’s Award Agreement,
vesting ceases on such Participant’s Termination Date (unless
determined otherwise by the Committee).
9.RESTRICTED
STOCK UNITS.
9.1Awards
of Restricted Stock Units.
A Restricted Stock Unit (“RSU”) is an award to an eligible
Employee, Consultant, or Non-Employee Director covering a number of
Shares that may be settled in cash, or by issuance of those Shares
(which may consist of Restricted Stock). All RSUs shall be made
pursuant to an Award Agreement.
9.2Terms
of RSUs.
The Committee will determine the terms of an RSU including, without
limitation: (a) the number of Shares subject to the RSU; (b) the
time or times during which the RSU may be settled; (c) the
consideration to be distributed on settlement; and (d) the effect
of the Participant’s Termination on each RSU. An RSU may be awarded
upon satisfaction of such performance goals based on Performance
Factors during any Performance Period as are set out in advance in
the Participant’s Award Agreement. If the RSU is being earned upon
satisfaction of Performance Factors, then the Committee will: (x)
determine the nature, length and starting date of any Performance
Period for the RSU; (y) select from among the Performance Factors
to be used to measure the performance, if any; and (z) determine
the number of Shares deemed subject to the RSU. Performance Periods
may overlap and participants may participate simultaneously with
respect to RSUs that are subject to different Performance Periods
and different performance goals and other criteria.
9.3Form
and Timing of Settlement.
Payment of earned RSUs shall be made as soon as practicable after
the date(s) determined by the Committee and set forth in the Award
Agreement. The Committee, in its sole discretion, may settle earned
RSUs in cash, Shares, or a combination of both. The Committee may
also permit a Participant to defer payment under a RSU to a date or
dates after the RSU is earned provided that the terms of the RSU
and any deferral satisfy the requirements of Section 409A of the
Code.
9.4Termination.
Except as may be set forth in the Participant’s Award Agreement,
vesting ceases on such Participant’s Termination Date (unless
determined otherwise by the Committee).
10.PERFORMANCE
AWARDS.
10.1Performance
Awards.
A Performance Award is an award to an eligible Employee,
Consultant, or Non-Employee Director a cash bonus or a Performance
Share bonus. Grants of Performance Awards shall be made pursuant to
an Award Agreement.
10.2Terms
of Performance Awards.
The Committee will determine, and each Award Agreement shall set
forth, the terms of each award of Performance Award including,
without limitation: (a) the amount of any cash bonus; (b) the
number of Shares deemed subject to a Performance Share bonus; (c)
the Performance Factors and Performance Period that shall determine
the time and extent to which each Performance Award shall be
settled; (d) the consideration to be distributed on settlement; and
(e) the effect of the Participant’s Termination on each Performance
Award. In establishing Performance Factors and the Performance
Period the Committee will: (x) determine the nature, length and
starting date of any Performance Period; and (y) select from among
the Performance Factors to be used. Prior to settlement the
Committee shall determine the extent to which Performance Awards
have been earned. Performance Periods may overlap and Participants
may participate simultaneously with respect to Performance Awards
that are subject to different Performance Periods and different
performance goals and other criteria. No Participant will be
eligible to receive more than $10,000,000 in Performance Awards in
any calendar year under this Plan.
10.3Value,
Earning and Timing of Performance Shares.
Any Performance Share bonus will have an initial value equal to the
Fair Market Value of a Share on the date of grant. After the
applicable Performance Period has ended, the holder of a
Performance Share bonus will be entitled to receive a payout of the
number of Shares earned by the Participant over the Performance
Period, to be determined as a function of the extent to which the
corresponding Performance Factors or other vesting provisions have
been achieved. The Committee, in its sole discretion, may pay an
earned Performance Share bonus in the form of cash, in Shares
(which have an aggregate Fair Market Value equal to the value of
the earned Performance Shares at the close of the applicable
Performance Period) or in a combination thereof. Performance Share
bonuses may also be settled in Restricted Stock.
10.4Termination.
Except as may be set forth in the Participant’s Award Agreement,
vesting ceases on such Participant’s Termination Date (unless
determined otherwise by the Committee).
11.PAYMENT
FOR SHARE PURCHASES.
Payment from a Participant for Shares purchased pursuant to this
Plan may be made in cash or by check or, where expressly approved
for the Participant by the Committee and where permitted by law
(and to the extent not otherwise set forth in the applicable Award
Agreement):
(a)by
cancellation of indebtedness of the Company to the
Participant;
(b)by
surrender of shares of the Company held by the Participant that
have a Fair Market Value on the date of surrender equal to the
aggregate exercise price of the Shares as to which said Award will
be exercised or settled;
(c)by
waiver of compensation due or accrued to the Participant for
services rendered or to be rendered to the Company or a Parent,
Subsidiary or Affiliate;
(d)by
consideration received by the Company pursuant to a broker-assisted
or other form of cashless exercise program implemented by the
Company in connection with the Plan;
(e)by
any combination of the foregoing; or
(f)by
any other method of payment as is permitted by applicable
law.
12.GRANTS
TO NON-EMPLOYEE DIRECTORS.
12.1.Types
of Awards.
Non-Employee Directors are eligible to receive any type of Award
offered under this Plan except ISOs. Awards pursuant to this
Section 12 may be automatically made pursuant to policy adopted by
the Board, or made from time to time as determined in the
discretion of the Board.
12.2.Eligibility.
Awards pursuant to this Section 12 shall be granted only to
Non-Employee Directors. A Non-Employee Director who is elected or
re-elected as a member of the Board will be eligible to receive an
Award under this Section 12.
12.3.Vesting,
Exercisability and Settlement.
Except as set forth in Section 21, Awards shall vest, become
exercisable and be settled as determined by the Board. With respect
to Options and SARs, the exercise price granted to Non-Employee
Directors shall not be less than the Fair Market Value of the
Shares at the time that such Option or SAR is granted.
12.4.Election
to receive Awards in Lieu of Cash.
A Non-Employee Director may elect to receive his or her annual
retainer payments and/or meeting fees from the Company in the form
of cash or Awards or a combination thereof, as determined by the
Committee. Such Awards shall be issued under the Plan. An election
under this Section 12.4 shall be filed with the Company on the form
prescribed by the Company.
13.WITHHOLDING
TAXES.
13.1Withholding
Generally.
Whenever Shares are to be issued in satisfaction of Awards granted
under this Plan, the Company may require the Participant to remit
to the Company, or to the Parent, Subsidiary or Affiliate employing
the Participant, an amount sufficient to satisfy applicable U.S.
federal, state, local and international withholding tax
requirements or any other tax liability legally due from the
Participant prior to the delivery of Shares pursuant to exercise or
settlement of any Award. Whenever payments in satisfaction of
Awards granted under this Plan are to be made in cash, such payment
will be net of an amount sufficient to satisfy applicable U.S.
federal, state, local and international withholding tax
requirements or any other tax liability legally due from the
Participant. The Fair Market Value of the Shares will be determined
as of the date that the taxes are required to be withheld as
required by applicable tax rules or as of a date determined by the
Committee in its discretion, where permitted by applicable
law.
13.2Stock
Withholding.
The Committee, in its sole discretion and pursuant to such
procedures as it may specify from time to time and to limitations
of local law, may require or permit a Participant to satisfy such
tax withholding obligation or any other tax liability legally due
from the Participant, in whole or in part by (without limitation)
(i) paying cash, (ii) electing to have the Company withhold
otherwise deliverable cash or Shares having a Fair Market Value up
to the maximum statutory amount required to be withheld unless a
lesser amount of withholding is required to avoid adverse
accounting treatment, or (iii) delivering to the Company
already-owned Shares having a Fair Market Value up to the maximum
amount required to be withheld unless a lesser amount of
withholding is required to avoid adverse accounting
treatment.
14.TRANSFERABILITY.
14.1Transfer
Generally.
Unless determined otherwise by the Committee or pursuant to Section
14.2, an Award may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by
the laws of descent or distribution. If the Committee makes an
Award transferable, including, without limitation, by instrument to
an inter vivos or testamentary trust in which the Awards are to be
passed to beneficiaries upon the death of the trustor (settlor) or
by gift to a Permitted Transferee, such Award will contain such
additional terms and conditions as the Committee deems appropriate.
All Awards shall be exercisable: (i) during the Participant’s
lifetime only by (A) the Participant, or (B) the Participant’s
guardian or legal representative; (ii) after the Participant’s
death, by the legal representative of the Participant’s heirs or
legatees; and (iii) in the case of all awards except ISOs, by a
Permitted Transferee.
14.2Award
Transfer Program.
Notwithstanding any contrary provision of the Plan, the Committee
shall have all discretion and authority to determine and implement
the terms and conditions of any Award Transfer Program instituted
pursuant to this Section 14.2 and shall have the authority to amend
the terms of any Award participating, or otherwise eligible to
participate in, the Award Transfer Program, including (but not
limited to) the authority to (i) amend (including to extend) the
expiration date, post-termination exercise period and/or forfeiture
conditions of any such Award, (ii) amend or remove any provisions
of the Award relating to the Award holder’s continued service to
the Company or its Parent, Subsidiary or Affiliate, (iii) amend the
permissible payment methods with respect to the exercise or
purchase of any such Award, (iv) amend the adjustments to be
implemented in the event of changes in the capitalization and other
similar events with respect to such Award, and (v) make such other
changes to the terms of such Award as the Committee deems necessary
or appropriate in its sole discretion.
15.PRIVILEGES
OF STOCK OWNERSHIP; RESTRICTIONS ON SHARES.
15.1Voting
and Dividends.
No Participant will have any of the rights of a stockholder with
respect to any Shares until the Shares are issued to the
Participant, except for any rights permitted by an applicable Award
Agreement. After Shares are issued to the Participant, the
Participant will be a stockholder and have all the rights of a
stockholder with respect to such Shares, including the right to
vote and receive all dividends or other distributions made or paid
with respect to such Shares;
provided,
that if such Shares are Restricted Stock, then any new, additional
or different securities the Participant may become entitled to
receive with respect to such Shares by virtue of a stock dividend,
stock split or any other change in the corporate or capital
structure of the Company will be subject to the same restrictions
as the Restricted Stock;
provided,
further,
that the Participant will have no right to retain such stock
dividends or stock distributions with respect to Shares that are
repurchased at the Participant’s Purchase Price or Exercise Price,
as the case may be, pursuant to Section 15.2.
15.2Restrictions
on Shares.
At the discretion of the Committee, the Company may reserve to
itself and/or its assignee(s) a right to repurchase (a
“Right
of Repurchase”)
a portion of any or all Unvested Shares held by a Participant
following such Participant’s Termination at any time within ninety
(90) days after the later of the Participant’s Termination Date and
the date the Participant purchases Shares under this Plan, for cash
and/or cancellation of purchase money indebtedness, at the
Participant’s Purchase Price or Exercise Price, as the case may
be.
16.CERTIFICATES.
All Shares or other securities whether or not certificated,
delivered under this Plan will be subject to such stock transfer
orders, legends and other restrictions as the Committee may deem
necessary or advisable, including restrictions under any applicable
U.S. federal, state or foreign securities law, or any rules,
regulations and other requirements of the SEC or any stock exchange
or automated quotation system upon which the Shares may be listed
or quoted and any non-U.S. exchange controls or securities law
restrictions to which the Shares are subject.
17.ESCROW;
PLEDGE OF SHARES.
To enforce any restrictions on a Participant’s Shares, the
Committee may require the Participant to deposit all certificates
representing Shares, together with stock powers or other
instruments of transfer approved by the Committee, appropriately
endorsed in blank, with the Company or an agent designated by the
Company to hold in escrow until such restrictions have lapsed or
terminated, and the Committee may cause a legend or legends
referencing such restrictions to be placed on the certificates. Any
Participant who is permitted to execute a promissory note as
partial or full consideration for the purchase of Shares under this
Plan will be required to pledge and deposit with the Company all or
part of the Shares so purchased as collateral to secure the payment
of the Participant’s obligation to the Company under the promissory
note;
provided,
however,
that the Committee may require or accept other or additional forms
of collateral to secure the payment of such obligation and, in any
event, the Company will have full recourse against the Participant
under the promissory note notwithstanding any pledge of the
Participant’s Shares or other collateral. In connection with any
pledge of the Shares, the Participant will be required to execute
and deliver a written pledge agreement in such form as the
Committee will from time to time approve. The Shares purchased with
the promissory note may be released from the pledge on a pro rata
basis as the promissory note is paid.
18.REPRICING;
EXCHANGE AND BUYOUT OF AWARDS.
Without prior stockholder approval the Committee may (i) reprice
Options or SARS (and where such repricing is a reduction in the
Exercise Price of outstanding Options or SARS, the consent of the
affected Participants is not required provided written notice is
provided to them, notwithstanding any adverse tax consequences to
them arising from the repricing), and (ii) with the consent of the
respective Participants (unless not required pursuant to Section
5.9 of the Plan), pay cash or issue new Awards in exchange for the
surrender and cancellation of any, or all, outstanding
Awards.
19.SECURITIES
LAW AND OTHER REGULATORY COMPLIANCE.
An Award will not be effective unless such Award is in compliance
with all applicable U.S. and foreign federal and state securities
laws, rules and regulations of any governmental body, and the
requirements of any stock exchange or automated quotation system
upon which the Shares may then be listed or quoted, as they are in
effect on the date of grant of the Award and also on the date of
exercise or other issuance. Notwithstanding any other provision in
this Plan, the Company will have no obligation to issue or deliver
certificates for Shares under this Plan prior to: (a) obtaining any
approvals from governmental agencies that the Company determines
are necessary or advisable; and/or (b) completion of any
registration or other qualification of such Shares under any state
or
federal or foreign law or ruling of any governmental body that the
Company determines to be necessary or advisable. The Company will
be under no obligation to register the Shares with the SEC or to
effect compliance with the registration, qualification or listing
requirements of any foreign or state securities laws, stock
exchange or automated quotation system, and the Company will have
no liability for any inability or failure to do so.
20.NO
OBLIGATION TO EMPLOY.
Nothing in this Plan or any Award granted under this Plan will
confer or be deemed to confer on any Participant any right to
continue in the employ of, or to continue any other relationship
with, the Company or any Parent, Subsidiary or Affiliate or limit
in any way the right of the Company or any Parent, Subsidiary or
Affiliate to terminate Participant’s employment or other
relationship at any time.
21.CORPORATE
TRANSACTIONS.
21.1Assumption
or Replacement of Awards by Successor.
In the event of a Corporate Transaction any or all outstanding
Awards may be assumed or replaced by the successor corporation,
which assumption or replacement shall be binding on all
Participants. In the alternative, the successor corporation may
substitute equivalent Awards or provide substantially similar
consideration to Participants as was provided to stockholders
(after taking into account the existing provisions of the Awards).
The successor corporation may also issue, in place of outstanding
Shares of the Company held by the Participant, substantially
similar shares or other property subject to repurchase restrictions
no less favorable to the Participant. In the event such successor
or acquiring corporation (if any) refuses to assume, convert,
replace or substitute Awards, as provided above, pursuant to a
Corporate Transaction, then notwithstanding any other provision in
this Plan to the contrary, such Awards shall have their vesting
accelerate as to all shares subject to such Award (and any
applicable right of repurchase fully lapse) immediately prior to
the Corporate Transaction unless otherwise determined by the Board
and then such Awards will terminate. In addition, in the event such
successor or acquiring corporation (if any) refuses to assume,
convert, replace or substitute Awards, as provided above, pursuant
to a Corporate Transaction, the Committee will notify the
Participant in writing or electronically that such Award will be
exercisable for a period of time determined by the Committee in its
sole discretion, and such Award will terminate upon the expiration
of such period. Awards need not be treated similarly in a Corporate
Transaction.
21.2Assumption
of Awards by the Company.
The Company, from time to time, also may substitute or assume
outstanding awards granted by another company, whether in
connection with an acquisition of such other company or otherwise,
by either; (a) granting an Award under this Plan in substitution of
such other company’s award; or (b) assuming such award as if it had
been granted under this Plan if the terms of such assumed award
could be applied to an Award granted under this Plan. Such
substitution or assumption will be permissible if the holder of the
substituted or assumed award would have been eligible to be granted
an Award under this Plan if the other company had applied the rules
of this Plan to such grant. In the event the Company assumes an
award granted by another company, the terms and conditions of such
award will remain unchanged (except
that the Purchase Price or the Exercise Price, as the case may be,
and the number and nature of Shares issuable upon exercise or
settlement of any such Award will be adjusted appropriately
pursuant to Section 424(a) of the Code). In the event the Company
elects to grant a new Option in substitution rather than assuming
an existing option, such new Option may be granted with a similarly
adjusted Exercise Price.
21.3Non-Employee
Directors’ Awards.
Notwithstanding any provision to the contrary herein, in the event
of a Corporate Transaction, the vesting of all Awards granted to
Non-Employee Directors shall accelerate and such Awards shall
become exercisable (as applicable) in full prior to the
consummation of such event at such times and on such conditions as
the Committee determines.
22.ADOPTION
AND STOCKHOLDER APPROVAL.
This Plan shall be submitted for the approval of the Company’s
stockholders, consistent with applicable laws, within twelve (12)
months before or after the date this Plan is adopted by the
Board.
23.TERM
OF PLAN/GOVERNING LAW.
Unless earlier terminated as provided herein, this Plan will become
effective on the Effective Date and will terminate ten (10) years
from April 22, 2016. This Plan and all Awards granted hereunder
shall be governed by and construed in accordance with the laws of
the State of Delaware.
24.AMENDMENT
OR TERMINATION OF PLAN.
The Board may at any time terminate or amend this Plan in any
respect, including, without limitation, amendment of any form of
Award Agreement or instrument to be executed pursuant to this
Plan;
provided,
however,
that the Board will not, without the approval of the stockholders
of the Company, amend this Plan in any manner that requires such
stockholder approval;
provided further,
that a Participant’s Award shall be governed by the version of this
Plan then in effect at the time such Award was
granted.
25.NONEXCLUSIVITY
OF THE PLAN.
Neither the adoption of this Plan by the Board, the submission of
this Plan to the stockholders of the Company for approval, nor any
provision of this Plan will be construed as creating any
limitations on the power of the Board to adopt such additional
compensation arrangements as it may deem desirable, including,
without limitation, the granting of stock awards and bonuses
otherwise than under this Plan, and such arrangements may be
either
generally applicable or applicable only in specific
cases.
26.INSIDER
TRADING POLICY.
Each Participant who receives an Award shall comply with any policy
adopted by the Company from time to time covering transactions in
the Company’s securities by Employees, officers and/or Directors of
the Company.
27.DEFINITIONS.
As used in this Plan, and except as elsewhere defined herein, the
following terms will have the following meanings:
“Affiliate”
means any entity other than a Parent or Subsidiary that, directly
or indirectly, is controlled by, controls or is under common
control with, the Company or in which the Company has a significant
equity interest, in either case as determined by the Board;
provided,
however,
that the definition of Affiliate shall be limited to entities that
are eligible issuers of service recipient stock (as defined in
Treas. Reg. Section 1.409A-1(b)(5)(iii)(E), or applicable successor
regulation) for Awards that would otherwise be subject to Section
409A, unless the Committee determines otherwise.
“Award”
means any award granted pursuant to the provisions of the Plan,
including any Option, Restricted Stock, Stock Bonus, Stock
Appreciation Right, Restricted Stock Unit or award of Performance
Shares.
“Award
Agreement”
means, with respect to each Award, the written or electronic
agreement between the Company and the Participant setting forth the
terms and conditions of the Award, which shall be in substantially
a form (which need not be the same for each Participant) that the
Committee has from time to time approved, and will comply with and
be subject to the terms and conditions of this Plan.
“Award
Transfer Program”
means any program instituted by the Committee which would permit
Participants the opportunity to transfer any outstanding Awards to
a financial institution or other person or entity approved by the
Committee.
“Board”
means the Board of Directors of the Company.
“Cause”
means (i) Participant’s willful failure substantially to perform
his or her duties and responsibilities to the Company or deliberate
violation of a Company policy; (ii) Participant’s commission of any
act of fraud, embezzlement, dishonesty or any other willful
misconduct that has caused or is reasonably expected to result in
material injury to the Company; (iii) unauthorized use or
disclosure by Participant of any proprietary information or trade
secrets of the Company or any other party to whom the Participant
owes an obligation of nondisclosure as a result of his or her
relationship with the Company; or (iv) Participant’s willful breach
of any of his or her obligations under any written agreement or
covenant with the Company. The determination as to whether a
Participant is being terminated for Cause shall be made in good
faith by the Company and shall be final and binding on the
Participant. The foregoing definition does not in any way limit the
Company’s ability to terminate a Participant’s employment or
consulting relationship at any time as provided in Section 20
above, and the term “Company” will be interpreted to include any
Subsidiary or Parent, as appropriate.
“Code”
means the United States Internal Revenue Code of 1986, as amended,
and the regulations promulgated thereunder.
“Committee”
means the Compensation Committee of the Board or those persons to
whom administration of the Plan, or part of the Plan, has been
delegated as permitted by law.
“Common
Stock”
means the Class A Common Stock of the Company.
“Company”
means Meta Platforms, Inc., or any successor
corporation.
“Consultant”
means any individual, including an advisor or independent
contractor, engaged by the Company or a Parent, Subsidiary or
Affiliate to render services to such entity other than as an
Employee or Non- Employee Director.
“Corporate
Transaction”
means the occurrence of any of the following events: (i) any
“person” (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act) becomes the “beneficial owner” (as defined in Rule
13d-3 of the Exchange Act), directly or indirectly, of securities
of the Company representing fifty percent (50%) or more of the
total voting power represented by the Company’s then-outstanding
voting securities; (ii) the consummation of the sale or disposition
by the Company of all or substantially all of the Company’s assets;
(iii) the consummation of a merger or consolidation of the Company
with any other corporation, other than a merger or consolidation
which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting
securities of the surviving entity or its parent) at least fifty
percent (50%) of the total voting power represented by the voting
securities of the Company or such surviving entity or its parent
outstanding immediately after such merger or consolidation or (iv)
any other transaction which qualifies as a “corporate transaction”
under Section 424(a) of the Code
wherein the stockholders of the Company give up all of their equity
interest in the Company (except for the acquisition, sale or
transfer of all or substantially all of the outstanding shares of
the Company).
“Director”
means a member of the Board.
“Disability”
means in the case of incentive stock options, total and permanent
disability as defined in Section 22(e)(3) of the Code and in the
case of other Awards, that the Participant is unable to engage in
any substantial gainful activity by reason of any medically
determinable physical or mental impairment that can be expected to
result in death or can be expected to last for a continuous period
of not less than 12 months.
“Effective
Date”
means the day immediately prior to the date of the underwritten
initial public offering of the Company’s Common Stock pursuant to a
registration statement that is declared effective by the
SEC.
“Employee”
means any individual, including officers and directors, employed by
the Company or any Parent, Subsidiary or Affiliate. Neither service
as a Director nor payment of a Director’s fee by the Company will
be sufficient to constitute “employment” by the
Company.
“Exchange
Act”
means the United States Securities Exchange Act of 1934, as
amended.
“Exchange
Program”
means a program pursuant to which outstanding Awards are
surrendered, cancelled or exchanged for cash, the same type of
Award or a different Award (or combination thereof).
“Exercise
Price”
means, with respect to an Option, the price at which a holder may
purchase the Shares issuable upon exercise of an Option and with
respect to a SAR, the price at which the SAR is granted to the
holder thereof.
“Fair
Market Value”
means, as of any date, the value of a share of the Company’s Common
Stock determined as follows:
(a)if
such Common Stock is publicly traded and is then listed on a
national securities exchange, the closing price on the date of
determination on the principal national securities exchange on
which the Common Stock is listed or admitted to trading as
officially quoted in the composite tape of transactions on such
exchange or such other source as the Committee deems reliable for
the applicable date;
(b)if
such Common Stock is publicly traded but is neither listed nor
admitted to trading on a national securities exchange, the average
of the closing bid and asked prices on the date of determination as
reported in
The Wall Street Journal
or such other source as the Committee deems reliable;
(c)in
the case of an Option or SAR grant made on the Effective Date, the
price per share at which shares of the Company’s Common Stock are
initially offered for sale to the public by the Company’s
underwriters in the initial public offering of the Company’s Common
Stock pursuant to a registration statement filed with the SEC under
the Securities Act; or
(d)by
the Board or the Committee in good faith.
“Insider”
means an officer or Director of the Company or any other person
whose transactions in the Company’s Common Stock are subject to
Section 16 of the Exchange Act.
“Non-Employee
Director”
means a Director who is not an Employee of the Company or any
Parent, Subsidiary or Affiliate.
“Option”
means an award of an option to purchase Shares pursuant to Section
5.
“Parent”
means any corporation (other than the Company) in an unbroken chain
of corporations ending with the Company if each of such
corporations other than the Company owns stock possessing fifty
percent (50%) or more of the total combined voting power of all
classes of stock in one of the other corporations in such
chain.
“Participant”
means a person who holds an Award under this Plan.
“Performance
Award”
means cash or stock granted pursuant to Section 10 or Section 12 of
the Plan. “Performance
Factors”
means any of the factors selected by the Committee and specified in
an Award Agreement, from among the following objective measures,
either individually, alternatively or in any combination, applied
to the Company as a whole or any business unit or Subsidiary or
Affiliate, either individually, alternatively, or in any
combination, on a GAAP or non-GAAP
basis, and measured, to the extent applicable on an absolute basis
or relative to a pre-established target, to determine whether the
performance goals established by the Committee with respect to
applicable Awards have been satisfied:
|
|
|
|
|
|
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(a) |
Profit Before Tax; |
|
(b) |
Billings; |
|
(c) |
Revenue; |
|
(d) |
Net revenue; |
|
(e) |
Earnings (which may include earnings before interest and taxes,
earnings before taxes, and net earnings); |
|
(f) |
Operating income; |
|
(g) |
Operating margin; |
|
(h) |
Operating profit; |
|
(i) |
Controllable operating profit, or net operating profit; |
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(j) |
Net Profit; |
|
(k) |
Gross margin; |
|
(l) |
Operating expenses or operating expenses as a percentage of
revenue; |
|
(m) |
Net income; |
|
(n) |
Earnings per share; |
|
(o) |
Total stockholder return; |
|
(p) |
Market share; |
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(q) |
Return on assets or net assets; |
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(r) |
The Company’s stock price; |
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(s) |
Growth in stockholder value relative to a pre-determined
index; |
|
(t) |
Return on equity; |
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(u) |
Return on invested capital; |
|
(v) |
Cash Flow (including free cash flow or operating cash
flows) |
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(w) |
Cash conversion cycle; |
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(x) |
Economic value added; |
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(y) |
Individual confidential business objectives; |
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(z) |
Contract awards or backlog; |
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(aa) |
Overhead or other expense reduction; |
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(bb) |
Credit rating; |
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(cc) |
Strategic plan development and implementation; |
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(dd) |
Succession plan development and implementation; |
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(ee) |
Improvement in workforce diversity; |
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(ff) |
Customer indicators; |
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(gg) |
New product invention or innovation; |
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(hh) |
Attainment of research and development milestones; |
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(ii) |
Improvements in productivity; |
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(jj) |
Bookings; |
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(kk) |
Attainment of objective operating goals and employee metrics;
and
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(ll) |
Any other metric that is capable of measurement as determined by
the Committee.
|
The Committee may, in recognition of unusual or non-recurring items
such as acquisition-related activities or changes in applicable
accounting rules, provide for one or more equitable adjustments
(based on objective standards) to the Performance Factors to
preserve the Committee’s original intent regarding the Performance
Factors at the time of the initial award grant. It is within the
sole discretion of the Committee to make or not make any such
equitable adjustments.
“Performance
Period”
means the period of service determined by the Committee, during
which years of service or performance is to be measured for the
Award.
“Performance
Share”
means a performance share bonus granted as a Performance
Award.
“Permitted
Transferee”
means any child, stepchild, grandchild, parent, stepparent,
grandparent, spouse, former spouse, sibling, niece, nephew,
mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law, or sister-in-law (including adoptive relationships)
of the Employee, any person sharing the Employee’s household (other
than a tenant or employee), a trust in which these persons (or the
Employee) have more than 50% of the beneficial interest, a
foundation in which these persons (or the Employee) control the
management of assets, and any other entity in which these persons
(or the Employee) own more than 50% of the voting
interests.
“Plan”
means this Meta Platforms, Inc. 2012 Equity Incentive
Plan.
“Purchase
Price”
means the price to be paid for Shares acquired under the Plan,
other than Shares acquired upon exercise of an Option or
SAR.
“Restricted
Stock Award”
means an award of Shares pursuant to Section 6 or Section 12 of the
Plan, or issued pursuant to the early exercise of an
Option.
“Restricted
Stock Unit”
means an Award granted pursuant to Section 9 or Section 12 of the
Plan. “SEC”
means the United States Securities and Exchange
Commission.
“Securities
Act”
means the United States Securities Act of 1933, as
amended.
“Shares”
means shares of the Company’s Common Stock and the common stock of
any successor entity.
“Stock
Appreciation Right”
means an Award granted pursuant to Section 8 or Section 12 of the
Plan.
“Stock
Bonus”
means an Award granted pursuant to Section 7 or Section 12 of the
Plan.
“Subsidiary”
means any corporation (other than the Company) in an unbroken chain
of corporations beginning with the Company if each of the
corporations other than the last corporation in the unbroken chain
owns stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other
corporations in such chain.
“Substitute
Awards”
shall mean Awards granted or Shares issued by the Company in
assumption of, or in substitution or exchange for, awards
previously granted, or the right or obligation to make future
awards, by a company acquired by the Company or any Subsidiary or
Affiliate or with which the Company or any Subsidiary or Affiliate
combines.
“Termination”
or “Terminated”
means, for purposes of this Plan with respect to a Participant,
that the Participant has for any reason ceased to provide services
as an employee, officer, director, consultant, independent
contractor or advisor to the Company or a Parent, Subsidiary or
Affiliate. The Committee will have sole discretion to determine
whether a Participant has ceased to provide services for purposes
of the Plan and the effective date on which the Participant ceased
to provide services (the “Termination
Date”).
“Unvested
Shares”
means Shares that have not yet vested or are subject to a right of
repurchase in favor of the Company (or any successor
thereto).
Appendix A-2
PLAN AMENDMENT
THIRD AMENDMENT TO THE
META PLATFORMS, INC.
2012 EQUITY INCENTIVE PLAN
This Third Amendment (the “Amendment”)
to the Meta Platforms, Inc. 2012 Equity Incentive Plan (as amended
and restated on June 20, 2016 and amended on February 13, 2018) (as
further amended from time to time, the “Plan”)
is approved and adopted to be effective as of March 1, 2023 (the
“Amendment
Effective Date”).
RECITALS
A. Section 24 of the Plan provides that the Board may amend the
Plan, subject to stockholder approval under circumstances where
stockholder approval is required, including for the increase in
number of Shares (as defined in the Plan) available under the
Plan.
B. This Amendment is subject to the approval of stockholders of
Meta Platforms, Inc., a Delaware corporation (the
“Company”).
C. The Company now desires to amend the Plan in accordance with the
terms and conditions of this Amendment.
AMENDMENT
NOW THEREFORE, effective as of the Amendment Effective Date,
Section 2.1 of the Plan is hereby amended and restated by deleting
Section 2.1 in its entirety and replacing it with the
following:
“2.1 Number
of Shares Available.
Subject to Sections 2.6 and 21 and any other applicable provisions
hereof, the total number of Shares reserved and available for grant
and issuance pursuant to this Plan as of March 1, 2023, is
425,000,000 Shares
plus (i) any Shares subject to grants previously made under the
Plan that are outstanding as of March 1, 2023 and (ii) any Shares
reserved and available for grant and issuance pursuant to this Plan
as of March 1, 2023, prior to giving effect to this Amendment.
Substitute Awards may be granted under the Plan and any such grants
shall not reduce the Shares authorized for grant under the
Plan.”
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