○ | Accountability. We are accountable to each other and has served in that role since December 2020. Ms. Brannon leads our finance and legal functions. Throughout her career, Ms. Brannon has served as the Chief Financial Officer for several companies in the information technology and software industries. Ms. Brannon previously served as the Chief Financial Officer at Asure Software from October 2017 until August 2020. She has also served as a self-employed Finance Executive Consultant from May 2015 to December 2020, through which she offered consultative services for board and audit committee presentations and corporate governance. Ms. Brannon was the Chief Financial Officer of Arista Networks, Inc. from July 2013 until April 2015. Prior to that, she was the Chief Financial Officer at Delivery Agent, where she prepared Delivery Agent for its Initial Public Offering. Ms. Brannon has a BA in Political Science from Murray State University. Martin Attiq
Age 39
Chief Business Officer
Mr. Attiq serves as our Chief Business Officer and has been with Astra since January 2020. Mr. Attiq leads our business development, partnerships, spaceport services, real estate strategy, communications and policy functions. From January 2016 until January 2020, Mr. Attiq served as the Vice President and Head of Strategic Partnerships for SigFig, a digital innovation company for retail banking and wealth management. Prior to that, from July 2005 to July 2015, Mr. Attiq was a Director at BlackRock, where he co-founded and helped scale the Financial Markets Advisory group. Mr. Attiq holds a B.S.E. in Industrial and Operations Engineering from the University of Michigan as well as an M.S. in Management from Stanford University Graduate School of Business where he was a Sloan Fellow.
Benjamin Lyon
Age 43
Chief Engineer and Executive Vice President of Engineering and Operations
Mr. Lyon has served as our Chief Engineer and Executive Vice President of Engineering and Operations since February 2021. Mr. Lyon previously served at Apple in various capacities since May 1999, most recently as Senior Director of the Special Projects Group since April 2014, and previously as Director of Sensing Hardware, Senior Manager of Sensing Hardware, Electrical Engineer – Technical Lead for Trackpads and Electrical Engineer for Input and Displays. Mr. Lyon holds a B.S. in Electrical and Computer Engineering from Carnegie Mellon University.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENTThe following table sets forth information known to the Company regarding the beneficial ownership of our Class A common stock and Class B common stock as of April 21, 2022 by:
each person known by us to beneficially own more than 5% of our common stock;
each of our named executive officers;
each of our directors (including the director nominees); and
all of our directors and executive officers as a group.
Beneficial ownership is determined according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security if they possess sole or shared voting or investment power over that security, including options and warrants that are currently exercisable or exercisable within 60 days. In computing the number of shares of Class A or Class B common stock beneficially owned by a person and the percentage ownership, the Company deemed outstanding shares of its Class A common stock subject to options held by that person that are currently exercisable or exercisable within 60 days and restricted stock units held by that person that are subject to vest within 60 days. The Company did not deem these shares outstanding, however, for the purpose of computing the percentage ownership of any other person.
The beneficial ownership of Company stock is based on 208,614,084 shares of Class A common stock and 55,539,188 shares of Class B common stock issued and outstanding as of April 21, 2022.
Unless otherwise indicated, the Company believes that each person named in the table below has sole voting and investment power with respect to all of the Class A or Class B common stock beneficially owned by them. Except as otherwise indicated, the address of each beneficial owner listed is c/o Astra Space, Inc., 1900 Skyhawk Street, Alameda, California 94501.
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Directors and Executive Officers:
| | | | | | | | | | | | | | | | Martin Attiq(1)(3) | | | 618,893 | | | * | | | — | | | — | | | * | Kelyn Brannon(1)(4) | | | 811,044 | | | * | | | — | | | — | | | * | Michèle Flournoy(1)(5) | | | 13,556 | | | * | | | — | | | — | | | * | Chris C. Kemp(1)(6) | | | 6,650 | | | * | | | 27,095,633 | | | 48.8% | | | 35.5% | Michael E. Lehman(1)(7) | | | 24,602 | | | * | | | — | | | — | | | * | Adam London(1) | | | — | | | — | | | 28,443,555 | | | 51.2% | | | 37.2% | Benjamin Lyon(1)(8) | | | 326,649 | | | * | | | — | | | — | | | * | Craig McCaw(2) | | | 9,280,927 | | | 4.5% | | | — | | | — | | | 4.5% | Lisa Nelson(1)(9) | | | 16,684 | | | * | | | — | | | — | | | * | Scott Stanford(1)(10) | | | 29,649,132 | | | 14.2% | | | — | | | — | | | 3.9% | All directors and executive officers as a group (ten individuals)
| | | 40,748,137 | | | 19.5% | | | 55,539,188 | | | 100% | | | 78.0% | | | | | | | | | | | | | | | | | Five Percent Holders:
| | | | | | | | | | | | | | | | ACME, LLC and affiliated funds(11) | | | 29,626,192 | | | 14.2% | | | — | | | — | | | 3.9% | A/NPC Holdings LLC(12) | | | 25,155,093 | | | 12.1% | | | — | | | — | | | 3.3% | Canaan X L.P.(13) | | | 16,489,668 | | | 8.0% | | | — | | | — | | | 2.2% |
**
| Percentage of total voting power represents voting power with respect to all shares of Class A common stock and Class B common stock, as a single class. Each share of Class B common stock is entitled to 10 votes per share and each share of Class A common stock is entitled to one vote per share. |
(1)
| The business address of each of these holders is 1900 Skyhawk Street, Alameda, CA 94501. |
(2)
| The business address of Mr. McCaw is 2300 Carillon Point, Kirkland, WA 98033. Includes 14,911 restricted stock units which vest within 60 days of April 21, 2022. The record holder of the remaining shares reported here is X-icity Holdings Corporation (“X-icity”) Mr. McCaw is the Co-CEO of Pendrell. Mr. McCaw shares voting and investment discretion with respect to the Class A common stock held of record by Pendrell Corporation (“Pendrell”), which owns 100% of X-icity. Mr. McCaw shares voting and investment discretion with respect to these shares and disclaims any beneficial ownership of any shares held by X-icity or Pendrell except to the extent of his pecuniary interest therein. The business address of Pendrell is 2300 Carillon Point, Kirkland, WA 98033. |
(3)
| Includes options to purchase 585,084 shares of Class A common stock that will be exercisable 60 days from April 21, 2022, and 12,012 restricted stock units which will vest within 60 days from April 21, 2022. |
(4)
| Includes options to purchase 518,474 shares of Class A common stock that will be exercisable 60 days from April 21, 2022, and 99,681 restricted stock units which will vest within 60 days from April 21, 2022. |
(5)
| Consists solely of restricted stock units which will vest within 60 days from April 21, 2022. |
(6)
| Number of shares of Class A common stock reported consists solely of options to purchase shares of Class A common stock that will be exercisable 60 days from April 21, 2022. |
(7)
| Includes 18,352 restricted stock units which will vest within 60 days from April 21, 2022. |
(8)
| Includes 81,351 restricted stock units which will vest within 60 days from April 21, 2022. |
(9)
| Consists solely of restricted stock units which will vest within 60 days from April 21, 2022. |
(10)
| Shares reported includes 22,940 restricted stock units which will vest within 60 days from April 21, 2022, and shares held by ACME, LLC and its affiliates Sherpa Ventures Fund II, LP (“ACME Fund II”), ACME SPV AS, LLC (collectively “ACME Capital”) and Eagle Creek Capital LLC (collectively “ACME Capital”). See Note 11. Scott Stanford exercises voting and dispositive control over the securities held by ACME Fund II and Eagle Creek Capital LLC and thus may be deemed to beneficially own such securities. Scott Stanford and Hany Nada exercise voting and dispositive control over the securities held by ACME SPV AS, LLC and thus may be deemed to beneficially own such securities. |
(11)
| Based on the Schedule 13D filed on July 12, 2021, funds managed by ACME Capital are the record holders of the shares reported herein. Scott Stanford exercisesvoting and dispositive control over the securities held by ACME Fund II and Eagle Creek Capital LLC and thus may be deemed to beneficially own such securities. Scott Stanford and Hany Nada exercise voting and dispositive control over the securities held by ACME SPV AS, LLC and thus may be deemed to beneficially own such securities. The business address of ACME Capital is 500 Howard Street, Suite 201, San Francisco, CA 94105. |
(12)
| Based on the Scheduled 13G filed on July 8, 2021, A/NPC Holdings LLC is a Delaware limited liability company (“A/NPC Holdings”). 61.24% of the interests of A/NPC Holdings are held by Newhouse Cable Holdings, LLC, a New York limited liability company (“Newhouse Cable”). The remaining 38.76% of the interests in A/NPC Holdings are held by Advance Communications Company LLC, a New York limited liability company (“Advance Communications Co.”), which is also the managing member of A/NPC Holdings. Newhouse Cable is a wholly-owned subsidiary of Newhouse Broadcasting Corporation, a New York corporation. Advance Communications Co. is an indirect |
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wholly-owned subsidiary of Advance Publications, Inc., a New York corporation (“API”). All of the common shares in API are owned by Newhouse Family Holdings, L.P., a Delaware limited partnership (“NFH”). As a result of its ownership of all of the outstanding common shares of API, NFH has the power to elect the board of directors of API. Advance Long-Term Management Trust, a New Jersey trust (“Advance Long-Term Trust”), is the sole general partner of NFH. The trustees of Advance Long-Term Trust are Samuel I. Newhouse, III, Steven O. Newhouse, Michael A. Newhouse, Victor F. Ganzi and Thomas Summer. NFH, Advance Long-Term Trust and each trustee of Advance Long-Term Trust disclaim beneficial ownership of the shares of Class A Common Stock reported on this Proxy Statement. The business address of A/NPC Holdings LLC is c/o Advance Finance Group, One World Trade Center, 43rd Floor, New York, NY 10007, Attn: William J. Barry and Sol Cotlier.
(13)
| Based on the Schedule 13G filed on January 27, 2022, the shares are held directly by Canaan X L.P. (the “Canaan Fund”). The sole general partner of the Canaan Fund is Canaan Partners X LLC (“Canaan X”), and may be deemed to have sole voting, investment and dispositive power with respect to the shares held by the Canaan Fund. Investment and voting decisions with respect to the shares held by the Canaan Fund are made by the managers of Canaan X, collectively. The business address is 2765 Sand Hill Road, Menlo Park, CA 94025. |
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COMPENSATION DISCUSSION AND ANALYSIS | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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The Compensation Committee seeks to maintain a compensation program for its named executive officers (the “NEOs”) that supports Astra’s short-termRespect. We respect each other and long-term strategic goals. The program reflects our pay-for-performance philosophy and is intended to promote the retention of high-performing executives and the creation of long-term stockholder value. Specifically, our goal is to align the compensation of our NEOs with stockholder value and motivate our NEOs to achieve the Company’s strategic objectives.opposing ideas
We operate in a highly competitive industry and the competition for executive talent continues to intensify. The challenges we face in hiring and retaining NEOs include:
|
○ | Highly Competitive Spacetech Industry —Reliability. We are a pioneer in the innovativerigorous and highly competitive SpaceTech industry. Many of the companies with whom we compete for talent are largerconsistently deliver quality and are able to offer higher compensation than us.
Challenging Employee Retention Environment reliable— In the Spacetech industry, there is substantial and continuous competition for executives with the experience and aptitude to motivate and lead engineers in designing, developing and managing our product and service offerings. We are headquartered in Alameda, California, part of the Silicon Valley, where competition for top talent is particularly challenging.
Our compensation program relies upon a mix of base salary and equity incentive compensation to reward, motivate and retain our NEOs. We aligned our base salaries across our NEOs in the third quarter 2021, such that all receive an annual base salary of $500,000 (other than Mr. Kemp, our CEO, who receives $600,000) as we view each of the NEOs as critical to Astra’s future success and increasing long-term stockholder value.
Our primary incentive and retention tool is our 2021 Omnibus Incentive Plan (the “Plan”) and the compensation of our NEOs is heavily weighted to equity grants under the Plan. In 2021, we granted to our NEOs a combination of service-based stock options (“SSOs”), service-based restricted stock units (“RSUs”) and performance-based stock options (“PSOs”). As described in more detail below under “Long-Term Equity Incentive Compensation,” vesting of our PSOs are tied to the Company’s achievement of five (5) critical business objectives and the increase in the Company’s stock price. Given the Company’s status in 2021 as an emerging growth company and that its paid commercial operations did not start until the first quarter of 2022, the Compensation Committee believed that focusing the PSOs products on the strategic objectives necessary to drive financial performance and thus long-term stockholder value would serve as a strong incentive to the Company’s NEOs to ensure these objectives were achieved. As a result, a large percentage of the NEOs’ incentive compensation is tied to the PSOs. To ensure the retention of our NEOs, we incorporated SSOs and RSUs into our compensation programs. These generally vest over a period of four (4) years. See “Long-Term Equity Incentive Compensation” below regarding specific vesting schedules for each of the NEOs.
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Our NEOs realized compensation for 2021 was significantly below the total compensation reported in the Summary Compensation Table. This result is consistent with the pay-for-performance nature of our executive compensation program where approximately 58% of the equity awards granted to our NEOs are delivered in the form of PSOs. These deliver value to the NEOs only if the Company’s stock price increases and then only as and when the five critical business objectives are achieved. Based on the closing trading price for a share of the Company’s Class A common stock as of April 21, 2022, all stock options (both SSOs and PSOs) granted to the NEOs are underwater (meaning that their exercise price is higher than the current market price). The value of underwater SSOs and PSOs included in each NEOs total compensation for 2021 is as follows:
Chris Kemp
| | | PSOs
| | | $30,301,659
| | SSOs
| | | $7,231,659time
| Adam London
|
The Compensation Committee periodically reviews the compensation principles used for setting the total cash compensation and equity incentive compensation for the Company’s workforce. The Company also periodically compares the components of its compensation with its peer companies and those of its competitors in the Spacetech industry to ensure that compensation remains competitive and continues to attract, retain, and motivate a skilled and diverse workforce. Pursuant to its charter, the Compensation Committee is authorized to engage, at the expense of the Company, a compensation consultant to provide independent advice, support, and expertise to assist the Compensation Committee in overseeing and reviewing Astra’s overall executive compensation strategy, structure, policies, and programs, and to assess whether our compensation structure establishes appropriate incentives for management and other key employees. Aon’s Human Capital Solutions practice, a division of Aon plc (“Aon”), in its role as the Compensation Committee’s independent compensation consultant, assisted with executive and director pay assessments and worked with the Compensation Committee to review the design of the executive compensation program in 2022. In addition, Aon assisted the Compensation Committee in identifying the peer groups of publicly-traded companies the Compensation Committee used in competitive market analyses and benchmarking of executive compensation. Aon reported directly to the Compensation Committee and provided no other remunerated services to the Company. Aon does not provide services for any of our affiliates. In accordance with SEC rules and requirements, and Nasdaq listing standards, the Company has affirmatively determined that Aon is independent, and that no conflicts of interest exist between the Company and Aon (or any individuals working on the Company’s account on behalf of Aon). COMPENSATION BENCHMARKING In evaluating executive officer compensation, the Compensation Committee annually considers the compensation paid by an executive compensation peer group, and to use that information as a basis for evaluating the pay of our executive officers. The peer group is comprised of approximately 20 companies from industries that include TABLE OF CONTENTS aerospace and defense, electronic equipment and instruments, application software, and construction machinery and heavy trucks, among others. In July 2022, the Compensation Committee reevaluated its peer group for executive compensation and removed companies that were not aligned with Astra’s market capitalization and headcount criteria, and added companies that were better aligned with our industry, market capitalization, headcount and geography. More specifically, the criteria used to assess the appropriateness of the current peer group and identify companies to add to the peer group were as follows: (i) a focus on publicly traded hardware and software technology companies with an emphasis on growth stage aerospace and electric vehicle technology where possible; (ii) target companies with market capitalization generally between $150 million and $2.0 billion based on our market capitalization at the time of analysis; (iii) target companies with headcount generally ranging from 100 employees to 1,200 employees based on headcount at the time of analysis; and (iv) emphasize technology “hub” locations where possible. In 2022, our executive compensation was divided into the following pay elements: | | | PSOs
| | | $6,060,335
| | SSOs
| | | $3,615,830
| Kelyn Brannon
| | | PSOs
| | | $3,030,168
| | SSOs
| | | $6,799,723
| Martin Attiq
| | | PSOs
| | | $9,090,501
| | SSOs
| | | $1,274,090
| Benjamin Lyon
| | | PSOs
| | | $12,120,668
| | SSOs
| | | N/AAnnual Base Salary | | | • Compensate executives for their normal day-to-day responsibilities | | | • Only fixed portion of compensation
(1)
| Reflects the grant date fair value determined in accordance with the Financial Accounting Standards Board Accounting Standards Codification Topic 718, Comparison. The assumptions made in these valuations are discussed in our Form 10-K in Item 15 — Consolidated Financial Statements• All other compensation elements are variable |
| On June 30, 2021, we closed on our Merger, thereby becoming a publicly traded company. On July 1, 2021, we merged with Apollo Fusion, Inc., whose propulsion module (now known as Astra Spacecraft Engine) achieved successful orbital ignition on board the Spaceflight Sherpa-LTE1 orbital transfer vehicle. On November 4, 2021, we filed an application with the Federal Communication Commission, under which we requested authority to launch and operate a non-geostationary orbit satellite system using V-band frequencies as we work to build out our space services offering. On November 20, 2021, we conducted our first commercial orbital launch on our launch vehicle LV0007.
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COMPENSATION POLICIES AND PRACTICESOur compensation program is designed to provide appropriate performance incentives and avoid compensation practices that do not promote the interests of our stockholders.
✔
| | | Maintain strong alignment between corporate performance and NEO compensation by having a majority of the total compensation consist of performance-based compensation.
| | | ✘
| | | No stock options granted below the fair market value of a share of our Class A common stock on the grant date
| ✔
| | | Have employment and change in control agreements with our NEOs.
| | | ✘
| | | No guaranteed bonuses in connection with annual pay structure (except with respect to Kelyn Brannon and Benjamin Lyon for 2021, which they each negotiated at the time they joined the Company and we provided as incentives to their on-boarding).
| ✔
| | | Maintain a long-term incentive plan that provides for forfeiture of awards if an employee engages in misconduct.
| | | ✘
| | | No hedging or pledging of our securities by NEOs and directors.
| ✔
| | | Use an independent compensation consultant retained by and reporting directly to the Compensation Committee.
| | | ✘
| | | No perquisites
| ✔
| | | Have agreements that only provide for “double-trigger” accelerated vesting of all unvested options and RSUs to any of our NEO’s upon a change of control.
| | | ✘
| | | No excise tax gross-ups
| ✔
| | | Conduct competitive benchmarking to align our executive compensation with the market.
| | | | | | |
AsService-Based Stock Options (SSOs)
| | | • Motivate executives to build long-term stockholder value
• Retain our executives | | | • Provide value only if stock price increases
• Exercise price is equal to the per share price of Astra Common Stock on the grant date
• Generally vest over a newly public company,period of four years, with 25% vesting on the Compensation Committee continuesfirst vesting date (which is either February 15, 2022 or August 15, 2022, depending on the NEO) and then quarterly thereafter1 | | | | | | | | Restricted Stock Units (RSUs) | | | • Motivate executives to workbuild long-term stockholder value
• Retain our executives | | | • Generally vest over a period of four years, with 25% vesting on the first vesting date (which is either February 15, 2022 or August 15, 2022, depending on the NEO) and then quarterly thereafter1 | | | | | | | | Performance Based Stock Options (PSOs) | | | • Motivate the executives to refinefocus on achieving the Company’s critical business objectives supporting its executive compensation program. In 2022, it expects to considerlong term strategy and increasing the adoptionCompany’s stock price | | | • PSOs vest based on achievement of a clawback policy, stock ownership guidelines.performance objectives and the implementation of a process for assessing the effectiveness of the compensation plan for the purpose of identifying economic or reputational risksincreases in the design of our incentive compensation programs.stock price
2021 NAMED EXECUTIVE OFFICERSChris Kemp
| | | Chief Executive Officer
| Adam London
| | | Chief Technology Officer
| Kelyn Brannon
| | | Chief Financial Officer
| Martin Attiq
| | | Chief Business Officer
| Benjamin Lyon
| | | Chief Engineer and Executive Vice President of Engineering and Operations
|
The Company maintains compensation principles that are• PSOs were intended to ensure that its compensation practices are fair and reasonable as applied to both executive and non-executive employees. These principles align with the Company’s mission to Improve Life on Earth from SpaceTM, balance both individual and company performance, and seek to provide competitive wages and benefits with consistent position in the median range of the most relevant markets to employees based on their roles, responsibilities, skills, and performance.
As it relates to Astra’s executive compensation program, our goal is to ensure this program:
closely aligns our executive compensation with stockholder value creation, avoiding plans that encourage our executives to take excessive risk, while driving long-term value to stockholders;
supports our long-term business strategy by ensuring that performance objectives are consistent with driving long-term stockholder value;
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recognizes that the portion ofcover a NEO’s compensation that is at-risk and performance-based should be tied to the level of that individual’s responsibility and their ability to control the achievement of the performance objectives;five year period through 20262
emphasizes equity-based compensation over cash compensation;
allows us to recruit and retain a top-tier executive team in a competitive industry and to motivate our executive team to achieve superior performance over sustained periods;
provides a competitive compensation opportunity while adhering to market standards for compensation; and
complements and advances values the underlie Astra’s culture, which values are set forth below:
○ | Serve — We serve our employee, our customers and the world. |
○ | Learn — We listen to feedback and learn through constant iteration. |
○ | Simplify to Scale — We achieve scale by simplifying our products, processes and service. |
○ | Optimize Globally — We make trade-offs locally in order to optimize globally. |
○ | Ship — The more we ship, the more we learn, the faster we achieve our goals. |
The Compensation Committee periodically reviews the compensation principles used for setting the total cash compensation and equity incentive compensation for the Company’s workforce. The Company also periodically compares the components of its compensation with its peer companies and those of its competitors in the Spacetech industry to ensure that compensation remains competitive and continues to attract, retain, and motivate a skilled and diverse workforce.Pursuant to its charter, the Compensation Committee is authorized to engage, at the expense of the Company, a compensation consultant to provide independent advice, support, and expertise to assist the Compensation Committee in overseeing and reviewing Astra’s overall executive compensation strategy, structure, policies, and programs, and to assess whether our compensation structure establishes appropriate incentives for management and other key employees.
Aon’s Human Capital Solutions practice, a division of Aon plc (“Aon”), in its role as the Compensation Committee’s independent compensation consultant, assisted with executive and director pay assessments and worked with the Compensation Committee to review the design of the executive compensation program for 2021. In addition, Aon assisted the Compensation Committee in identifying the peer groups of publicly-traded companies the Compensation Committee used in competitive market analyses and benchmarking of both executive and non-executive compensation.
Aon reported directly to the Compensation Committee and provided no other remunerated services to the Company. Aon does not provide services for any of our affiliates. In accordance with SEC rules and requirements, and Nasdaq listing standards, the Company(1)
| Axel Martinez has affirmatively determined that Aon is independent, and that no conflicts of interest exist between the Company and Aon (or any individuals working on the Company’s account on behalf of Aon).TABLE OF CONTENTS
COMPENSATION BENCHMARKINGIn evaluating executive officer compensation, the Compensation Committee intends to annually consider the compensation paid by an executive compensation peer group, and to use that information as a basis for evaluating the pay of our executive officers. In August 2021, the Compensation Committee adopted an executive compensation peer group consisting of the twenty companies identified below, and used that information as part of its decision making in granting equity awards to the named executive officers in September 2021.
Aeva Technologies | | | Electronic Equipment and Instruments | | | 9 | | | 1,620 | Array Technologies | | | Electrical Components and Equipment | | | 853 | | | 2,120 | C3.ai | | | Application Software | | | 183 | | | 6,770 | Canoo | | | Automobile Manufacturers | | | — | | | 1,840 | ChargePoint | | | Electrical Components and Equipment | | | 241 | | | 4,640 | Fisker | | | Automobile Manufacturers | | | 0 | | | 4,670 | Hyliion | | | Construction Machinery and Heavy Trucks | | | 0 | | | 1,080 | JFrog | | | Systems Software | | | 207 | | | 2,860 | Lordstown Motors | | | Automobile Manufacturers | | | — | | | 678 | Luminar Technologies | | | Auto Parts and Equipment | | | 32 | | | 5,880 | Nikola | | | Construction Machinery and Heavy Trucks | | | — | | | 4,080 | nLIGHT | | | Electronic Equipment and Instruments | | | 270 | | | 1,050 | PagerDuty | | | Application Software | | | 281 | | | 2,860 | Proterra | | | Biotechnology | | | 243 | | | 1,960 | QuantumScape | | | Auto Parts and Equipment | | | — | | | 9,500 | Sumo Logic | | | Application Software | | | 242 | | | 1,360 | Telos | | | Systems Software | | | 242 | | | 1,030 | Velodyne Lidar | | | Electronic Equipment and Instruments | | | 62 | | | 916 | Virgin Galactic | | | Aerospace and Defense | | | 3 | | | — | 75th Percentile | | | | | | 243 | | | 4,648 | 50th Percentile | | | | | | 207 | | | 2,040 | 25th Percentile | | | | | | 9 | | | 1,073 | Astra Space | | | Aerospace and Defense | | | — | | | 1,830 |
Revenues set forth in the table above reflect the twelve months ended December 31, 2021 and the market capitalization value for each peer company are as of December 31, 2021. The peer group was chosen in August 2021 based primarily on companies that had gone public within the last five years within the industries similar to those in which the Company competes and having a market capitalization similar to that of the Company. At that time, Astra was positioned modestly above the 50th percentile in the market capitalization for the peer group and had room to grow in terms of total headcount.
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The charts below demonstrate how the NEOs’ total 2021 compensation was allocated among base salary, bonuses (where applicable), service-based stock options,options. He did receive service-based restricted stock units which vest over a period of four years, with 25% vesting on November 15, 2023 and performance-based stock options. The charts also indicate the portionthen quarterly thereafter.
|
(2)
| No PSOs were granted in 2022, but they remain a significant part of the NEOs’ total 2021 compensation that is subject tofor the achievement of challenging performance goals set forth in our PSOs. In addition, each NEO was granted SSOs that are dependent on an increase in the stock price during the term that the option is exercisable. Thus, a significant portion of our NEOs’ total 2021 compensation was “at-risk.”40NEOs (other than Axel Martinez).
|
TABLE OF CONTENTS Annual Base Salary
| | | • Compensate executives for their normal day-to-day responsibilities
| | | • Only fixed portion of compensation (except for Ms. Brannon and Mr. Lyon )
• All other compensation elements are variable
| | | | | | | | Service-Based Stock Options (SSOs)
| | | • Motivate executives to build long-term stockholder value
• Retain our executives
| | | • Provide value only if stock price increases
• Exercise price is equal to the per share price of Astra common stock on the grant date
• Generally vest over a period of four years, with 25% vesting on the first vesting date (which is either February 15, 2022 or August 15, 2022, depending on the NEO) and then quarterly thereafter
| | | | | | | | Restricted Stock Units (RSUs)
| | | • Motivate executives to build long-term stockholder value
• Retain our executives
| | | • Generally vest over a period of four years, with 25% vesting on the first vesting date (which is either February 15, 2022 or August 15, 2022, depending on the NEO) and then quarterly thereafter
| | | | | | | | Performance Based Stock Options (PSOs)
| | | • Motivate the executives to focus on achieving the Company’s critical business objectives supporting its long term strategy and increasing the Company’s stock price
| | | • PSOs vest based on achievement of performance objectives and increases in the stock price
• PSOs are intended to cover a five year period through 2026
• The Compensation Committee does not intend to make additional grants of PSOs until the five year period expires
|
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We establish the base salaries of our NEOs by considering the base salaries paid to executives holding similar positions within our peer group of companies and targeting the 25th to 50th percentile among those peer companies. Base salaries for our NEOs, other than Ms. Brannon, is positioned well below the median of the Company’s peer group. The Compensation Committee's approach is consistent with the Company’s philosophy to emphasize equity-based compensation over cash compensation and its pay for performance philosophy.
In September 2021, we adjusted base salaries for Dr. London and Ms. Brannon to align them with the base salaries of Mr. Lyon and Mr. Attiq as we view each of these NEOs as critical to Astra’s future success and increasing long-term stockholder value. Following these adjustments, the annual base salaries for all NEOs, other than Mr. Kemp, were $500,000.
Mr. Kemp was paid an annual base salary of $600,000 during 2021.
Mr. Lyon was paid an annual base salary of $400,000 from February 2021, to May 1, 2021, when his salary increased to $500,000, annually.
Mr. Attiq was paid an annual base salary of $500,000 during 2021.
In 2021, the Company paid Ms. Brannon and Mr. Lyon a bonus of $300,000 and $250,000, respectively, both of which were negotiated at the time they joined the Company to incentivize them to join the organization. We did not pay short-term cash incentives to any other NEO as the Company granted larger equity incentives to better align with stockholders’ long-term interests and in support of our pay-for-performance philosophy.
LONG-TERM EQUITY INCENTIVE COMPENSATIONIn an effort to drive long-term stockholder value and retain its NEOs, the Company awards equity grants under its 2021 Omnibus Incentive Plan, which grants consisted in 2021 of a combination of service-based stock options (“SSOs”), service-based restricted stock units (“RSUs”) and performance-based stock options (“PSOs”). The table below sets forth the awards that were granted in 2021 to each NEO, along with the grant date fair value of each award.
Chris Kemp | | | RSUs | | | 650,809 | | | $5,833,248 | | PSOs | | | 6,508,088 | | | $30,301,659 | | SSOs | | | 1,301,618 | | | $7,231,659 | Adam London | | | RSUs | | | 325,405 | | | $2,941,629 | | PSOs | | | 1,301,618 | | | $6,060,335 | | SSOs | | | 650,809 | | | $3,615,830 | Kelyn Brannon | | | RSUs | | | 1,387,527 | | | $12,543,105 | | PSOs | | | 650,809 | | | $3,030,168 | | SSOs | | | 1,244,345 | | | $6,799,723 | Martin Attiq | | | RSUs | | | 306,826 | | | $2,773,676 | | PSOs | | | 1,952,427 | | | $9,090,501 | | SSOs | | | 229,322 | | | $1,274,090 | Benjamin Lyon | | | RSUs | | | 1,301,618 | | | $11,766,497 | | PSOs | | | 2,603,236 | | | $12,120,668 | | SSOs | | | — | | | — |
We establish the base salaries of our NEOs by considering the base salaries paid to executives holding similar positions within our peer group of companies and targeting the 25th to 50th percentile among those peer companies, except with respect to Mr. Kemp, whose target base salary is between the 50th to 75th percentile among peer companies. The Compensation Committee's approach is consistent with the Company’s philosophy to emphasize equity-based compensation over cash compensation and its pay for performance philosophy. As of December 31, 2022, the base salaries for our NEOs were as follows: Mr. Kemp was paid an annual base salary of $600,001 during 2022. Dr. London and Ms. Brannon were paid an annual base salary of $500,001 during 2022. Ms. Brannon left us in November 2022, so she did not receive her entire base salary in 2022. Mr. Martinez joined the Company on October 10, 2022, and was paid a prorated portion of an annual base salary of $450,000 during 2022. ANNUAL BONUS PAYMENTS Beginning with calendar year 2023, Mr. Martinez has a target bonus of 50% of his annual base salary, payable, in whole or in part, if certain Company business objectives are met and subject to management and Compensation Committee discretion. In the future, Mr. Martinez’ future bonus targets will be determined at the discretion of the Compensation Committee. Mr. Martinez was not eligible to receive a bonus for 2022. Consistent with our pay for performance philosophy, Mr. Kemp and Dr. London did not receive in 2022, and are not expected to receive, in 2023, a cash bonus as part of their current compensation arrangements. LONG-TERM EQUITY INCENTIVE COMPENSATION In an effort to drive long-term stockholder value and retain its NEOs, the Company awards equity grants under its 2021 Omnibus Incentive Plan, which grants consisted in 2022 of a combination of service-based stock options (“SSOs”) for Mr. Kemp, Dr. London and Ms. Brannon and service-based restricted stock units (“RSUs) for all NEOs. Specifically, on January 20, 2022, the Company granted service-based SSOs and RSUs to Mr. Kemp, Dr. London and Ms. Brannon. In addition, on October 20, 2022 the Company granted service-based RSUs to Mr. Martinez as an inducement to him to join the Company initially as its executive vice president of finance with the intention that he would be promoted to Chief Financial Officer. The ultimate value of these awards to the NEOs, upon the vesting of the RSUs or the exercise of the SSOs, is directly based upon the Company’s stock price at the time of vesting or exercise. The exercise price for the stock option grants is $5.21, which was the closing share price for a share of the Company’s Class A Common Stock on January 20, 2022, the grant date. The Company is subject to the “clawback” provision of Section 304 of the Sarbanes-Oxley Act of 2022 which generally requires public company chief executive officers and chief financial officers to disgorge bonuses, other incentive- or equity-based compensation, and profits on sales of company stock that they receive within the 12-month period following the public release of financial information if there is a restatement because of material noncompliance, due to misconduct, with financial reporting requirements under the federal securities laws. We are reviewing the final clawback rule adopted by the SEC that implements the applicable provisions of the Dodd-Frank Act and the NASDAQ’s related proposed listing standard, in each case relating to recoupment of incentive-based compensation. The Company will implement its clawback policy in accordance with the new listing standard when the new listing standard becomes final. We provide all of our employees, including our NEOs, broad-based employee benefits that are intended to attract and retain employees while providing them with health and welfare benefits, including medical, dental, vision, life and disability insurance coverage, and the ability for eligible participants to participate in our 401(k) plan. We do not provide any perquisites for the NEOs. BRANNON SEVERANCE BENEFITS Ms. Brannon’s last day of employment with us was November 9, 2022. In connection with the transition of Ms. Brannon’s duties and responsibilities as chief financial officer, including those related to certain outstanding (1)
| Reflects the grant date fair value determined in accordance with the Financial Accounting Standards Board Accounting Standards Codification Topic 718, Comparison. The assumptions made in these valuations are discussed in our Form 10-K in Item 15 — Consolidated Financial Statements |
The mix of service-based and performance-based equity grants among the NEOs was primarily driven by the executive officer’s direct ability to drive the performance metrics measured.
The equity grants as a whole further support the goals of the Company’s compensation philosophy to align each executive officer’s interests with the long-term interests of the Company’s stockholders and to drive stockholder
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value. While the equity grants to the Company’s executive officers are, as a whole, positioned above the median of the Company’s peer group, these grants are intended to cover a period of four (4) years for the service-based awards and five years for the performance base awards. These are typically longer periods of time than the grants issued to similarly situated executive officers for the Company’s peers and are much more heavily weighted towards performance-based awards than the Company's peers.
Service-Based Incentive CompensationOn September 20, 2021, the Company granted service-based SSOs and RSUs to the NEOs. The ultimate value of these awards to the executive, upon the vesting of the RSUs or the exercise of the service-based stock options, is directly based upon the Company’s stock price at the time of vesting or exercise. Information with respect to their specific grants are set forth below under “Grants of Plan-Based Awards for the Fiscal Year Ended December 31, 2021.” The exercise price for the stock option grants is $9.04, which was the closing share price for a share of the Company’s Class A common stock on September 20, 2021, the grant date.
The SSOs and RSUs vest based on each NEO’s continued service to the Company, specifically:
All of the RSUs granted to Mr. Kemp and Dr. London, (b) 114,662 of the RSUs granted to Mr. Attiq and (c) all of the service-based stock options granted to Mr. Kemp, Dr. London and Mr. Attiq vest as follows: 25% of the grant vesting on August 15, 2022, and then in substantially equal quarterly installments beginning on November 15, 2022, through and including August 15, 2025.
All of the RSUs and SSOs granted to Ms. Brannon and (b) the remaining RSUs granted to Mr. Attiq (192,164) vest as follows: 25% of the grant vests on February 15, 2022, with the remainder vesting in substantially equal quarterly installments beginning on May 15, 2022, through and including February 15, 2025.
The RSUs granted to Benjamin Lyon vest as follows: 31.25% of the grant vests on November 15, 2021, with the remainder vesting in substantially equal quarterly installments beginning on February 15, 2022, through and including August 15, 2024.
In January 2022, the Company granted additional SSOs and RSUs to all of the NEOs, except Mr. Lyon who had negotiated his equity grants as part of his offer letter. These SSOs and RSUs vest as follows:
All grants to Messrs. Kemp, London and Attiq vest as follows: 25% of the grant vesting on August 15, 2022, and then in substantially equal quarterly installments beginning on November 15, 2022, through and including August 15, 2025.
All grants to Ms. Brannon vest as follows: 25% of the grant vests on February 15, 2022, with the remainder vesting in substantially equal quarterly installments beginning on May 15, 2022, through and including February 15, 2025.
Performance-Based Incentive CompensationConsistent with our pay-for-performance philosophy, the Company awarded PSOs to the NEOs with the intention that these awards would cover a five-year performance period. The exercise price of the PSOs is $9.04, which was the closing share price for a share of the Company’s Class A common stock on September 20, 2021, the grant date. The awards vest subject to the achievement of the following milestones:
Milestone A:
| | | The Company has had a Successful Orbital Delivery.
| Milestone B:
| | | The Company has had six (6) Orbital Launches during a six (6) consecutive month period.
| Milestone C:
| | | The Company has completed a prototype for a Spacecraft that has achieved an Orbital Launch.
| Milestone D:
| | | The Company has conducted twenty-six (26) Orbital Launches during a six (6) consecutive month period.
| Milestone E:
| | | The Company has achieved an Orbital Launch for an aggregate of 100 Spacecraft.
|
The milestones do not need to be achieved in any specific order or sequence.
After a milestone is achieved, twenty percent (20%) of the PSO grant will vest on the vesting date immediately following the date that the volume weighted average share price for a period of thirty trading days has met the share price threshold. For this purpose, a “vesting date” is the February 15, May 15, August 15 or November 15
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immediately following the date the share price threshold is achieved and the “share price threshold” is (i) $15.00 following the achievement of the first milestone; (b) $20.00 following the achievement of the second milestone; (c) $30.00 following the achievement of the third milestone; (d) $40.00 following the achievement of the fourth milestone, and (e) $50.00 following the achievement of the fifth milestone. Notwithstanding the foregoing, no portion of the performance-based stock option grant will vest until November 15, 2022, and no unvested portion of the PSO grant shall vest after November 15, 2026, meaning the unvested portion of the PSO grant will expire at that date. The foregoing summary of the vesting schedule for the PSO grants is qualified in its entirety by reference to the full text of the form of Performance Stock Option Award Agreement on file with the Securities and Exchange Commission.
The size of the PSO grants reflects the expectation of the Company’s Compensation Committee that the grants will address the Company’s growth and development goals over the next five years. Thus, the Compensation Committee does not, at this time, anticipate granting any additional PSOs in the near future.
The Company is subject to the “clawback” provision of Section 304 of the Sarbanes-Oxley Act of 2022 which generally requires public company chief executive officers and chief financial officers to disgorge bonuses, other incentive- or equity-based compensation, and profits on sales of company stock that they receive within the 12-month period following the public release of financial information if there is a restatement because of material noncompliance, due to misconduct, with financial reporting requirements under the federal securities laws.
We provide all of our employees, including our NEOs, broad-based employee benefits that are intended to attract and retain employees while providing them with health and welfare benefits, including medical, dental, vision, life and disability insurance coverage, and the ability for eligible participants to participate in our 401(k) plan.
We do not provide any perquisites for the NEOs.
POTENTIAL TERMINATION AND CHANGE-IN-CONTROL BENEFITSSee the discussion below under “Employment Agreements” as well as “Payments upon Termination or Change-in-Control” for information related to potential termination and change-in-control benefits available to our NEOs.
OVERSIGHT OF RISKS RELATED TO COMPENSATION POLICIESWith the assistance of the Compensation Committee’s independent compensation consultant, Aon, the Compensation Committee reviewed Astra’s material compensation policies and practices and concluded that these policies and practices do not create risks that are reasonably likely to have a material adverse effect on Astra. The key features of the executive compensation program that support this conclusion include:
appropriate pay philosophy, peer group and market positioning and
effective balance in cash and equity mix, short- and long-term focus, corporate performance focus and discretion.
POLICY AGAINST HEDGING AND MONETIZATION TRANSACTIONS AND PLEDGINGThe Board has adopted an Insider Trading Policy (the “Policy”), which applies to all of our directors, officers, and employees. The policy prohibits our directors, officers, and employees from engaging in hedging or monetization transactions, such as prepaid variable forwards, equity swaps, collars, exchange funds, short sales, and transactions in put options, call options, or other derivative securities. The Policy also prohibits directors, officers, and employees from holding Astra securities in a margin account or pledging them as collateral for a loan.
STOCK OWNERSHIP GUIDELINESWhile the Company believes that equity ownership by our NEOs is important as it aligns their interests with those of our stockholders, the Company does not currently require our NEOs hold a specific number of shares of our Class A common stock. Both our Nominating and Corporate Governance Committee and our Compensation Committee will evaluate on a periodic basis whether to adopt stock ownership guidelines for its NEOs and its directors.
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TAX AND ACCOUNTING CONSIDERATIONSThe Compensation Committee takes into account tax consequences to NEOs in designing the various elements of our compensation program, such as designing the terms of awards to defer immediate income recognition in accordance with Section 409A of the Code. The Compensation Committee remains informed of and takes into account the accounting implications of its compensation programs. However, the Compensation Committee approves programs based on their total alignment with our strategy and long-term goals. Similarly, the Compensation Committee is aware that, under current tax law, any compensation paid to our NEOs in excess of $1 million per year generally will not be tax deductible.
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Summary Compensation Table for the Fiscal Year Ended December 31, 2021Chris Kemp
Chief Executive Officer
| | | 2021 | | | 557,000 | | | — | | | 5,883,248 | | | 37,533,318 | | | — | | | — | | | 104 | | | 43,973,671 | | 2020 | | | 256,000 | | | — | | | 23,572,500(4) | | | 969 | | | — | | | — | | | — | | | 23,829,469 | Adam London
Chief Technology Officer
| | | 2021 | | | 407,542(5) | | | — | | | 2,941,629 | | | 9,676,164 | | | — | | | — | | | 104 | | | 13,025,439 | | 2020 | | | 227,000 | | | — | | | 7,857,500(4) | | | — | | | — | | | — | | | — | | | 8,084,500 | Kelyn Brannon
Chief Financial Officer
| | | 2021 | | | 420,417(6) | | | 300,000(7) | | | 12,543,105 | | | 9,829,891 | | | — | | | — | | | 5,904 | | | 23,099,317 | | 2020 | | | 8,021 | | | — | | | — | | | 6,205,050 | | | — | | | — | | | — | | | 6,213,071 | Martin Attiq
Chief Business Officer
| | | 2021 | | | 458,334 | | | — | | | 2,773,676 | | | 10,364,592 | | | — | | | — | | | 1,667 | | | 13,598,269 | Benjamin Lyon
Chief Engineer and Executive Vice President of Engineering and Operations
| | | 2021(8) | | | 409,259 | | | 250,000(7) | | | 11,766,497 | | | 12,120,668 | | | — | | | — | | | 2,587 | | | 24,594,010 |
TABLE OF CONTENTS litigation matters to which we are a party, we offered Ms. Brannon a retention bonus of $100,000 and severance benefits to include: (a) $400,000 of severance pay, (b) payment of the employer’s portion for continuation of health coverage through March 31, 2024 and (c) the acceleration of the vesting of 996,826 restricted stock units. Ms. Brannon has agreed to forfeit all 2,309,935 vested and unvested options to purchase shares of the Company’s Class A Common Stock as of November 9, 2022. Ms. Brannon has also agreed to be available through March 31, 2023 to provide transition services. In connection with our offer of severance, Ms. Brannon executed a severance agreement that included a general release of claims. OVERSIGHT OF RISKS RELATED TO COMPENSATION POLICIES The Compensation Committee reviewed Astra’s material compensation policies and practices and concluded that these policies and practices do not create risks that are reasonably likely to have a material adverse effect on the Company. The key features of the executive compensation program that support this conclusion include: appropriate pay philosophy, peer group and market positioning and effective balance in cash and equity mix, short- and long-term focus, corporate performance focus and discretion. POLICY AGAINST HEDGING AND MONETIZATION TRANSACTIONS AND PLEDGING The Board has adopted an Insider Trading Policy (the “Policy”), which applies to all of our directors, officers, and employees. The policy prohibits our directors, officers, and employees from engaging in hedging or monetization transactions, such as prepaid variable forwards, equity swaps, collars, exchange funds, short sales, and transactions in put options, call options, or other derivative securities. The Policy also prohibits directors, officers, and employees from holding Astra securities in a margin account or pledging them as collateral for a loan. STOCK OWNERSHIP GUIDELINES While the Company believes that equity ownership by our NEOs is important as it aligns their interests with those of our stockholders, the Company does not currently require our NEOs hold a specific number of shares of our Class A Common Stock. Both our Nominating and Corporate Governance Committee and our Compensation Committee expect to evaluate in 2023 whether to adopt stock ownership guidelines for its NEOs and its directors. TAX AND ACCOUNTING CONSIDERATIONS The Compensation Committee takes into account tax consequences to NEOs in designing the various elements of our compensation program, such as designing the terms of awards to defer immediate income recognition in accordance with Section 409A of the Code. The Compensation Committee remains informed of and takes into account the accounting implications of its compensation programs. However, the Compensation Committee approves programs based on their total alignment with our strategy and long-term goals. Similarly, the Compensation Committee is aware that, under current tax law, any compensation paid to our NEOs in excess of $1 million per year generally will not be tax deductible. TABLE OF CONTENTS Summary Compensation Table for the Fiscal Year Ended December 31, 2022 Chris Kemp
Chief Executive Officer and President
| | | 2022 | | | 600,001 | | | — | | | 1,130,215 | | | 1,386,612 | | | — | | | — | | | 360 | | | 3,117,188 | | 2021 | | | 557,000 | | | — | | | 5,883,248 | | | 37,533,318 | | | — | | | — | | | 104 | | | 43,973,671 | Adam London
Chief Technology Officer
| | | 2022 | | | 500,001 | | | — | | | 565,107 | | | 693,303 | | | — | | | — | | | 360 | | | 1,758,771 | | 2021 | | | 407,542 | | | — | | | 2,941,629 | | | 9,676,164 | | | — | | | — | | | 104 | | | 13,025,439 | Axel Martinez
Chief Financial Officer
| | | 2022(4) | | | 101,250 | | | 75,000 | | | 778,350 | | | — | | | — | | | — | | | 138 | | | 954,738 | Kelyn Brannon
Former Chief Financial Officer
| | | 2022(5) | | | 429,925 | | | 100,000 | | | 1,080,486 | | | 1,325,599 | | | — | | | — | | | 407,486 | | | 3,343,496 | | 2021 | | | 420,417 | | | 300,000 | | | 12,543,105 | | | 9,829,891 | | | — | | | — | | | 5,904 | | | 23,099,317 |
(1)
| Reflects actual base salary earnings. |
(2)
| Reflects the grant date fair value determined in accordance with the Financial Accounting Standards Board Accounting Standards Codification Topic 718, Comparison. The assumptions made in these valuations are discussed in our Form 10-K in Item 15 — Consolidated Financial Statements. |
(3)
| Reflects Company paid life insurance premiums for all NEOs and in the case of Ms. Brannon, Mr. Attiq and Mr. Lyon, also includes amounts matched under the Company’s 401(k) plan. |
(4)
| Reflects grants received prior to the Merger and which were converted to shares of the Company’s Class B common stock in connection therewith. |
(5)
| Dr. London’s initial base salary in 2021 was $400,000. His base salary increased to $500,000 on September 1, 2021. |
(6)
| Ms. Brannon commenced employment with us on December 23, 2020. Ms. Brannon’s annualized base salary in 2020 was $330,000. Ms. Brannon’s initial base salary in 2021 was $400,000. Her base salary increased to $500,000 on September 1, 2021. |
(7)
| Amounts reflect a one-time negotiated bonus in connection with the on-boarding of Ms. Brannon and Mr. Lyon. |
(8)
| Mr. Lyon commenced employment with us on February 6, 2021. Mr. Lyon’s annual base salary in 2021 was initially $400,000 and then increased to $500,000 on May 1, 2021. |
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Grants of Plan-Based Awards for the Fiscal Year Ended December 31, 2021Chris Kemp | | | RSUs | | | 9/20/2021 | | | — | | | — | | | — | | | — | | | — | | | — | | | 650,809 | | | — | | | — | | | 5,833,248 | | PSOs | | | 9/20/2021 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 6,508,088 | | | 9.04 | | | 30,301,659 | | SSOs | | | 9/20/2021 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 1,301,618 | | | 9.04 | | | 7,231,659 | Adam London | | | RSUs | | | 9/20/2021 | | | — | | | — | | | — | | | — | | | — | | | — | | | 325,405 | | | — | | | — | | | 2,941,629 | | PSOs | | | 9/20/2021 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 1,301,618 | | | 9.04 | | | 6,060,335 | | SSOs | | | 9/20/2021 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 650,809 | | | 9.04 | | | 3,615,830 | Kelyn Brannon | | | RSUs | | | 9/20/2021 | | | — | | | — | | | — | | | — | | | — | | | — | | | 1,387,527 | | | — | | | — | | | 12,543,105 | | PSOs | | | 9/20/2021 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 650,809 | | | 9.04 | | | 3,030,168 | | SSOs | | | 9/20/2021 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 1,244,345 | | | 9.04 | | | 6,799,723 | Martin Attiq | | | RSUs | | | 9/20/2021 | | | — | | | — | | | — | | | — | | | — | | | — | | | 306,826 | | | — | | | — | | | 2,773,676 | | PSOs | | | 9/20/2021 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 1,952,427 | | | 9.04 | | | 9,090,501 | | SSOs | | | 9/20/2021 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 229,322 | | | 9.04 | | | 1,274,090 | Benjamin Lyon | | | RSUs | | | 9/20/2021 | | | — | | | — | | | — | | | — | | | — | | | — | | | 1,301,618 | | | — | | | — | | | 11,766,497 | | PSOs | | | 9/20/2021 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 2,603,236 | | | 9.04 | | | 12,120,668 | | SSOs | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — |
(1)
| Reflects the grant date fair value determined in accordance with the Financial Accounting Standards Board Accounting Standards Codification Topic 718, Comparison. The assumptions made in these valuations are discussed in our Form 10-K in Item 15 — Consolidated Financial Statements. |
47(3)
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Outstanding Equity Awards at Fiscal Year-End | Reflects Company paid life insurance premiums for the Fiscal Year Ended December 31, 2021Chris Kemp | | | — | | | 7,809,706 | | | 9.04 | | | 9/20/2031 | | | 650,809 | | | 4,510,106 | | | — | | | — | | 6,650 | | | — | | | 0.46 | | | 2/26/2030 | | | — | | | — | | | — | | | — | Adam London | | | — | | | 1,952,427 | | | 9.04 | | | 9/20/2031 | | | 325,405 | | | 2,255,057 | | | — | | | — | Kelyn Brannon | | | — | | | 1,895,154 | | | 9.04 | | | 9/20/2031 | | | 1,387,527 | | | 9,615,562 | | | — | | | — | Martin Attiq | | | — | | | 2,181,749 | | | 9.04 | | | 9/20/2031 | | | 306,826 | | | 2,126,304 | | | — | | | — | | 77,584 | | | — | | | 0.46 | | | 5/14/2030 | | | — | | | — | | | — | | | — | | 398,750 | | | 471,252 | | | 0.46 | | | 2/26/2030 | | | — | | | — | | | — | | | — | Benjamin Lyon | | | — | | | 2,603,236 | | | 9.04 | | | 9/20/2031 | | | 894,863 | | | 6,201,401 | | | — | | | — |
(1)
| The number of securities underlying options are allocated among PSOsall NEOs and SSOs as follows: (a) for Mr. Kemp, 6,508,088 PSOs and 1,301,618 SSOs; (b) for Dr. London, 1,301,618 PSOs and 650,809 SSOs; (3) for Ms. Brannon, 650,809 PSOs and 1,244,345 SSOs; (d) for Mr. Attiq, 1,952,427 PSOs and 700,574 SSOs; and (5) for Mr. Lyon, 2,603,236 PSOs and no SSOs. |
Option Exercises and Stock Vested Table for the Fiscal Year Ended December 31, 2021Chris Kemp
| | | —
| | | —
| | | —
| | | —
| Adam London
| | | —
| | | —
| | | —
| | | —
| Kelyn Brannon
| | | 997,500
| | | 7,830,000(1)
| | | —
| | | —
| Martin Attiq
| | | 266,000
| | | 2,088,000(1)
| | | —
| | | —
| Benjamin Lyon
| | | —
| | | —
| | | 406,755
| | | 4,295,333(2)
|
(1)
| This exercise relates to stock options that the Company granted to Ms. Brannon and Mr. Attiq in December 2020, before the Company closed on the Merger. At that time, the Company was using 409A valuations to determine the exercise price of stock options. The stocks options granted to Ms. Brannon and Mr. Attiq were inadvertently issued below market value, which triggered a penalty from the Internal Revenue Code. This penalty would extend throughout the vesting period on the stock options On April 23, 2021 and prior to the Closing of the Merger, the Board for Legacy Astra approved the accelerated vesting of these options and the exercise of the options by Ms. Brannon and Mr. Attiq. Upon exercise, the shares were then sold at an agreed upon price in a secondary sale transaction to enable Ms. Brannon and Mr. Attiq to pay the tax penalty in 2021 rather than having the tax penalty increase due to the share price appreciation over the vesting period. |
(2)
| Reflect awards of restricted stock units that vested on November 15, 2021, at the closing per share price on that date of $10.56. |
Pension Benefits for the Fiscal Year Ended December 31, 2021None of the NEOs received qualified retirement income benefits for fiscal year 2021.
We entered into employment agreements with Mr. Kemp, Dr. London, Ms. Brannon and Mr. Attiq on February 1, 2022, which agreements were amended on September 1, 2021. Also on September 1, 2021, we entered into an employment agreement with Mr. Lyon. The Compensation Committee’s goal was to align the rights and benefits provided to the NEOs. Thus, the material terms of the NEOs employment agreements are identical except with those limited exceptions noted below.
Under the terms of the employment agreements (as amended on September 1, 2021, or entered on September 1, 2021, in the case of Mr. Lyon), each NEO would be paid an annualMartinez and Ms. Brannon also includes amounts matched under the Company’s 401(k) plan.
|
(4)
| Mr. Martinez commenced employment with us on October 11, 2022 as our executive vice president of finance and was awarded a $75,000 sign-on bonus. Mr. Martinez’s annualized base salary in 2022 was $450,000. |
(5)
| Ms. Brannon ceased employment with us on November 9, 2022. Ms. Brannon’s annualized base salary in 2022 was $500,001. She received $400,000 in severance and $100,000 as a retention bonus. |
TABLE OF CONTENTS Outstanding Equity Awards at Fiscal Year-End for the Fiscal Year Ended December 31, 2022 Chris Kemp | | | 406,754 | | | 7,402,952(2) | | | 9.04 | | | 9/20/2031 | | | 596,576 | | | 258,795(3) | | | — | | | — | | 135,583 | | | 298,289(4) | | | 5.21 | | | 1/20/2032 | | | — | | | — | | | — | | | — | | 6,650 | | | — | | | 0.46 | | | 2/26/2030 | | | — | | | — | | | — | | | — | Adam London | | | 203,376 | | | 1,749,051(5) | | | 9.04 | | | 9/20/2031 | | | 298,289 | | | 129,398(3) | | | — | | | — | | 67,790 | | | 149,145(4) | | | 5.21 | | | 1/20/2032 | | | — | | | — | | | — | | | — | Axel Martinez | | | — | | | — | | | — | | | — | | | 1,500,000 | | | 650,700(6) | | | — | | | — | Kelyn Brannon | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — |
(1)
| The number of $500,000, exceptsecurities underlying options are allocated among PSOs and SSOs as follows: (a) for Mr. Kemp, who would be paid an annual base salary of $600,000. This change resulted in increases to6,508,088 PSOs and 1,193,153 SSOs; and (b) for Dr. London, 1,301,618 PSOs and 596,578 SSOs. There was no outstanding equity for Ms. Brannon’s annual base salariesBrannon as of September 1, 2021. Mr. Attiq’sDecember 31, 2022. |
(2)
| Includes 6,508,088 PSOs that vest based on the achievement of certain milestones and Mr. Lyon’s annual base salaries remained at $500,000.894,864 SSOs that vested 25% on August 15, 2022, and then continue to vest in substantially equal quarterly installments beginning on November 15, 2022, through and including August 15, 2025. |
(3)
| Amounts are comprised of restricted stock units that vested 25% on August 15, 2022, and then continue to vest in substantially equal quarterly installments beginning on November 15, 2022, through and including August 15, 2025. |
(4)
| Amounts are comprised of SSOs that vested 25% on August 15, 2022, and then continue to vest in substantially equal quarterly installments beginning on November 15, 2022, through and including August 15, 2025. |
(5)
| Includes 1,301,618 PSOs that vest based on the achievement of certain milestones and 515,226 SSOs that vested 25% on August 15, 2022, and then continue to vest in substantially equal quarterly installments beginning on November 15, 2022, through and including August 15, 2025. |
(6)
| Amounts are comprised of restricted stock units that vest 25% on November 15, 2023, and then in substantially equal quarterly installments on each February 15, May 15, August 15 and November 15, through and including August 15, 2026. |
We entered into employment agreements with Mr. Kemp, Dr. London and Ms. Brannon on February 1, 2021, which agreements were amended on September 1, 2021. In providing for these amendments, the Compensation Committee’s goal was to align the rights and benefits provided to the NEOs. Prior to Mr. Martinez joining us on October 10, 2022 as our executive vice president of finance, we entered into an employment agreement with him. The material terms of the NEOs employment agreements are identical except with those limited exceptions noted below. Under the terms of the employment agreements of Mr. Kemp and Dr. London (as amended on September 1, 2021,), each NEO would be paid an annual base salary of $500,000, except Mr. Kemp who would be paid an annual base salary of $600,000. Pursuant to Mr. Martinez’s employment agreement, he would be paid an annual base salary of $450,000. The employment agreements allow the Company to pay an annual bonus to the NEO based on targets and performance metrics set by the Board. Mr. Martinez’s employment agreement included a one-time sign on bonus of $75,000, which was paid when he joined the Company on September 30, 2022 and has target bonus opportunity of 50% of his base salary for 2023 if certain Company business objectives are met. Mr. Martinez was not eligible for an annual bonus for calendar year 2022. Currently, the Compensation Committee has not, and does not expect to, set target bonuses for Mr. Kemp and Dr. London for 2023 and Mr. Martinez’s bonus target for future years is subject to the determination of the Compensation Committee. Mr. Martinez’s employment agreement set forth the amount of restricted stock units which were to be issued to each him in connection with his employment. All other employment agreements were silent on eligibility to participate in the 2021 Omnibus Incentive Plan. All of the NEO employment agreements except for Mr. Martinez’s provide that if an NEO’s employment is terminated by the Company without “Cause” or by the NEO for “Good Reason”, other than in connection with a TABLE OF CONTENTS The employment agreements allow the Company to pay an annual bonus to the NEO based on targets and performance metrics set by the Board. Ms. Brannon’s employment agreement also provided for a one-time bonus in the amount of $300,000 for fiscal year 2021, which was agreed to when she joined Astra in December 2020. Mr. Lyon’s employment agreement included a one-time sign on bonus of $250,000, which was paid when he joined the Company in February 2021.
Mr. Lyon’s employment agreement set forth the amount of restricted stock units and performance-based stock options that were to be issued to him in connection with his employment. All other employment agreements were silent on eligibility to participate in the Plan, except for Mr. Attiq, whose employment agreement makes him eligible to participate in the Company’s Long-Term Incentive Plan.
Mr. Lyon’s employment agreement also gives him the right to elect the role of chief operating officer if and when the Company requires that role.
The employment agreements provide that if an NEO’s employment is terminated by the Company without “Cause” or by the NEO for “Good Reason”, other than in connection with a Change of Control, the NEO will be entitled to severance consisting of (i) twelve months’ salary continuation; (ii) the target amount of any annual bonus that would otherwise be earned in the year of termination (offset by any amounts already paid toward the annual bonus); (iii) COBRA premium subsidy payments, at the rate of the Company’s normal contribution for active employees at the executive’s coverage level, for up to twelve months following termination; and (iv) accelerated vesting of unvested equity awards. If the qualifying termination occurs within the three months prior to or twelve months following a “Change of Control,” the severance will instead consist of (i) twelve months’ salary continuation (24 months in the case of Mr. Kemp); (ii) the target amount of any annual bonus that would otherwise be earned in the year of termination (offset by any amounts already paid toward the annual bonus; (iii) COBRA premium subsidy payments, at the rate of the Company’s normal contribution for active employees at the executive’s coverage level, for up to twelve months following termination (18 months in the case of Mr. Kemp); and (iv) accelerated vesting of unvested equity awards.
All of the NEO employment agreements provide that if a qualifying termination occurs within the three months prior to or twelve months following a “Change of Control,” the NEO is entitled to receive a severance consisting of (i) twelve months’ salary continuation (24 months in the case of Mr. Kemp); (ii) the target amount of any annual bonus that would otherwise be earned in the year of termination (offset by any amounts already paid toward the annual bonus), except that Mr. Martinez is not entitled to any bonus amount as severance; (iii) COBRA premium subsidy payments, at the rate of the Company’s normal contribution for active employees at the executive’s coverage level, for up to twelve months following termination (18 months in the case of Mr. Kemp); and (iv) accelerated vesting of unvested equity awards, except that Mr. Martinez is entitled to accelerated vesting of only those unvested equity awards that are scheduled to vest within the twelve months following termination. In either case, the Company’s obligation to make the severance payments, and the NEOs right to retain the same, is wholly conditioned on the NEO providing a general release of claims in favor of the Company and continuing to comply with the NEO’s obligations under their respective employment agreement, including the restrictive covenants. Specifically, the employment agreements contain (i) a perpetual confidentiality covenant; (ii) an assignment of intellectual property covenant; (iii) non-competition and non-solicitation of business partners covenants during the course of employment; (iv) a non-solicitation covenant with respect to employees and other service providers during the course of employment and for twelve months thereafter; and (v) a non-disparagement obligation. The foregoing summary of the terms and conditions of the employment agreements is not complete and is qualified in their entirety by reference to the full text of such employment agreements and related amendments on file with the SEC. The Compensation Committee is aware that executives and senior management have inconsistent severance benefits in the event of a Change of Control and intends to adopt, and has directed management to propose, a severance plan that provides for consistent treatment of executives and senior management in the event their employment is terminated as a result of a Change of Control. The Omnibus Incentive Plan The 2021 Omnibus Incentive Plan (the “Plan”) initially reserved 36,765,000 shares of Class A common stockCommon Stock for issuance for awards in accordance with the terms of the Plan. Pursuant to the terms of the Plan, an additional 13,148,738 shares of Class A common stockCommon Stock were reserved for issuance under the Plan on January 1, 2022, and the stockholders approved an amendment on June 1, 2022, authorizing an additional 6,000,000 shares of our Class A Common Stock to be reserved for issuance under the Plan. In addition, the number of shares of Class A common stockCommon Stock in the pool will automatically increase on January 1 of each year from 2023 to 2031 by the lesser of (i) 5% of the sum of number of shares of (x) Class A common stockCommon Stock and (y) Class B common stockCommon Stock outstanding as of the close of business on the immediately preceding December 31 and (ii) the number of shares of Class A common stockCommon Stock as determined by the Board. As of January 1, 2023, there was an additional 7,500,000 shares of Class A Common Stock reserved for issuance under the Plan. As of April 10, 2023, there were 14,764,507 shares of Class A Common Stock remaining to be issued under the Plan. The purpose of the Plan is to advance the Company’s interests by providing for the grant to our employees, directors, consultants and advisors of stock and stock-based awards. The Plan authorizes the award of stock-based incentives to encourage eligible employees, officers, directors, and consultants to expend maximum effort in the creation of stockholder value. As of April 21, 2022, over thirty-nine percent (39%) of the outstanding equity incentives granted under the Plan are subject to performance-based vesting metrics. The Board or the Compensation Committee will make grants of awards under the Plan to eligible participants under and pursuant to the terms of the Plan. The Employee Stock Purchase Plan The Employee Stock Purchase Plan (“ESPP”) initially reserved 5,000,000 shares of Class A common stockCommon Stock for grants to participants of options to purchase shares of Class A common stockCommon Stock in accordance with the terms of the ESPP. InPursuant to the terms of the Plan, an additional 2,629,738 shares of Class A Common Stock were reserved for issuance under the TABLE OF CONTENTS Plan on January 1, 2022. In addition, the number of shares reserved for issuance automatically increases on January 1 of each year from 20222023 to 2031 by the lesser of (i) 1% of the sum of number of shares of (x) Class A common stockCommon Stock and (y) Class B common stockCommon Stock outstanding as of the close of business on the immediately preceding December 31 and (ii) the number of shares of Class A common stockCommon Stock as determined by the Board. As of January 1, 2022,2023, there was an additional 2,629,7482,692,367 shares of Class A common stock reserved for issuance under the ESPP, and 7,629,748ESPP. As of April 10, 2023, there were 9,077,401 shares of Class A common stockCommon Stock remaining to be issued. issued under the ESPP. The purpose of the ESPP is to enable eligible employees to use payroll deductions to purchase shares of Class A common stockCommon Stock at a discount and thereby acquire an interest in the Company. The Company expects that the Board or the Compensation Committee will make grants of awards under the ESPP to eligible participants. Employees who are eligible to participate in the ESPP may elect to participate in the ESPP in accordance with, and subject to, its terms and conditions. PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROLAs described above under “Potential Termination and Change-in-Control Benefits” “Employment Agreements,” each of our NEOs are entitled to potential termination and change-in-control benefits upon the occurrence of certain events. The following table calculates the amounts to be provided as if such events occurred on December 31, 2021.
Chris Kemp | | | 5,133,818 | | | 5,133,818 | | | 5,943,270 | | | $0 | | | $0 | Adam London | | | 2,785,970 | | | 2,785,970 | | | 2,785,970 | | | $0 | | | $0 | Kelyn Brannon | | | 10,133,935 | | | 10,133,935 | | | 10,133,935 | | | $0 | | | $0 | Martin Attiq | | | 5,684,218 | | | 5,684,218 | | | 5,684,218 | | | $0 | | | $0 | Benjamin Lyon | | | 6,732,314 | | | 6,732,314 | | | 6,732,314 | | | $0 | | | $0 |
(1)
| The separation benefits consist of 12 months base salary, reimbursement for 12 months of premiums paid in connection with continuation coverage under COBRA at the NEO’s current coverage rate and accelerating all unvested SSOs and PSOs and RSUs for each NEO. In determining the value of unvested equity awards, we calculated the value of such awards as if they were exercised (in the case of SSOs and PSOs) and then sold on December 31, 2021 at the per share closing price of $6.93. The amount attributable to each NEO related to the acceleration of the vesting of equity awards is as follows: |
Chris Kemp
| | | $4,510,106
| Adam London
| | | $2,255,057
| Kelyn Brannon
| | | $9,615,562
| Martin Attiq
| | | $5,175,304
| Benjamin Lyon
| | | $6,201,401
|
(2)
| For Mr. Kemp, separation benefits consist of 24 months base salary, reimbursement for 18 months of premiums paid in connection with continuation coverage under COBRA at the Mr. Kemp’s current coverage rate and the value of the acceleration of unvested SSOs, PSOs and RSUs For all other NEOs, the separation benefits consist of 12 months base salary, reimbursement for 12 months of premiums paid in connection with continuation coverage under COBRA at the NEO’s current coverage rate and the value of acceleration of all unvested equity awards. In each case, we calculated the value of the acceleration of unvested equity awards in the same manner described in Note 1. |
The Compensation Committee intends to periodically compare the amount of compensation actually received by the NEOs to the amounts reported in its annual proxy statement and summarizing the compensation that would be owed to such individuals in the event of the termination of their employment under certain circumstances. Reviewing this information helps the Compensation Committee better understand the Company’s potential obligations to the NEOs following the termination of their employment. It also helps the Compensation Committee better assess the risk of any of the NEOs leaving the Company prematurely because the Company is not providing sufficient retention incentives.
The ratio of our CEO’s annual total compensation ($43.9 million) compared to our median compensated employee ($277,011) was:
| | | 159 to 1
| This ratio is a reasonable estimate calculated in a manner consistent with Item 402(u) of the SEC’s Regulation S-K.
| | | |
TABLE OF CONTENTS We are providing information regardingPAY VERSUS PERFORMANCEThe following table shows the relationship of the annualpast two fiscal years’ total compensation offor our median compensated employeenamed executive officers as set forth in the Summary Compensation Table, the “compensation actually paid” to our named executive officers (as determined under SEC rules), our total shareholder return (“TSR”), and our net income. SEC rules require certain adjustments be made to the annualSummary Compensation Table totals to determine Compensation Actually Paid as reported in the Pay Versus Performance Table. Compensation Actually Paid does not represent cash and/or equity value transferred to the applicable named executive officer without restriction, but rather is a valuation calculated under applicable SEC rules. In general, Compensation Actually Paid is calculated as summary compensation table total compensation adjusted to (a) include the value of Chris Kemp, our CEO. While we have providedany pension benefit (or loss) attributed to the disclosure required by SEC rules, we also believe that it is more meaningful to our stockholders to sharepast fiscal year, including on account of any amendments adopted during such year; and (b) include the CEO Pay Ratio excluding the 6,508,088 PSOs, which constitute a significant partfair market value of Mr. Kemp’s compensation and are significantly at-risk because they do not vest until certain performance milestones and share price thresholds are satisfied. We determined that,equity awards as of December 31, 2021, our employee population excluding our CEO consisted of 322 full-time employees. To identify2022 or, if earlier, the median employee from our employee population, we reviewedvesting date (rather than the annual total compensation of each of our employeesgrant date) and factor in the same manner as calculated for the annual total compensation of our CEO. Withdividends and interest accrued with respect to the annual total compensationsuch awards. For purposes of the median employee, we identified and calculated the elements of such employee’s compensation for 2021 in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K, resulting in annual total compensation of the median employee of $277,011.disclosure below, no pension valuation adjustments were required.
2022 | | | 3,117,188 | | | (52,125,199) | | | 2,085,668 | | | 16,642,449 | | | 4.29 | | | (411,438) | 2021 | | | 43,973,671 | | | (33,791,150) | | | 18,568,009 | | | (64,465,356) | | | 68.55 | | | (257,782) |
As set forth in the amount reported in the “Total” column of our Summary Compensation Table for the Fiscal Year Ended December 31, 2021 included in this Proxy Statement, CEO total compensation was $43,973,671. Based on this information, for 2021, our CEO’s ratio of annual total compensation to the median of the annual total compensation of all of our employees (other than the CEO) was approximately 157 to 1. As discussed in the CD&A, 71% of Mr. Kemp’s compensation is in the form of PSOs and therefore at-risk. Excluding compensation attributable to the PSOs, CEO total compensation would be $13.7 million, for a CEO pay ratio of approximately 49 to 1.(1)
| Mr. Kemp was the Company’s PEO for each of the 2022 and 2021 fiscal years. |
(2)
| The amounts disclosed reflect the adjustments listed in the table below to the amounts reported in the Summary Compensation Table for Mr. Kemp, the Company’s PEO: |
2022 | | | (2,516,826) | | | (5,180,649) | | | (5,180,649) | | | (51,966,534) | | | (304,060) | | | — | | | (55,581,566) | 2021 | | | (43,416,567) | | | (34,330,166) | | | (34,330,166) | | | 0 | | | (21,147) | | | — | | | (77,764,821) |
(3)
| For the year ended December 31, 2022, the Company’s non-PEO NEOs were: Dr. London, Mr. Martinez and Ms. Brannon. For the year ended December 31, 2021, our non-PEO NEOs were: Dr. London, Ms. Brannon (our former chief financial officer), Mr. Attiq (our chief business officer) and Mr. Lyon (our former executive vice president of engineering and operations). |
(4)
| The amounts disclosed reflect the adjustments listed in the table below to the amounts reported in the Summary Compensation Table for the Company’s non-PEO NEOs: |
2022 | | | (4,442,845) | | | (2,556,937) | | | 1,788,122 | | | ($4,271,832) | | | ($5,139,956) | | | — | | | (14,623,447) | 2021 | | | (72,016,221) | | | (10,584,741) | | | 1,403,008 | | | ($374,645) | | | (1,460,765) | | | — | | | ($83,033,365) |
(5)
| Calculated by dividing the sum of the cumulative amount of dividends for the measurement period, assuming dividend reinvestment (of which there were none), and the difference between the per share price of our Class A Common Stock at the end and the beginning of the measurement period by the per share price of our Class A Common Stock at the beginning of the measurement period. |
(6)
| The dollar amounts reported represent the amount of net income (loss) reflected in our consolidated audited financial statements for the year ended December 31, 2022, and 2021, as applicable. |
TABLE OF CONTENTS COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATIONAnalysis of the Information Presented in the Pay Versus Performance TableCompensation Actually Paid and Net Income (Loss) Given our status in 2021 as an emerging growth company and our primary focus on developing of our launch services and space products business, including the fact that our paid commercial launch operations did not start until the first quarter of 2022 and our first delivery of space products was during 2022, we have operated at net loss since inception. Thus, we have not used net income (loss) as a performance measure for our executive compensation program. Instead, we believe, consistent with our pay for performance philosophy, that a significant amount of our executive compensation should be at-risk and should align with the strategic objectives necessary to drive financial performance and thus long-term stockholder value. From 2021 to 2022, our net loss increased. The Compensation Actually Paid to our PEO decreased during those years as there was no change to Mr. Kemp’s cash compensation in 2022 from 2021. In 2021, consistent with our pay for performance philosophy, a significant portion of Mr. Kemp’s compensation was tied to performance stock options and other equity awards, which had a large grant date fair value. Because of the size of the performance stock option grants and our intent that those grants would cover a five year performance period, Mr. Kemp (and the other NEOs excluding Mr. Martinez) were awarded a limited number of equity grants in 2022. The Compensation Actually Paid to our non-PEO NEOs increased, on average, due in part to a one-time RSU grant and bonus paid to Mr. Martinez, who joined us as our executive vice president and then chief financial officer and significant bonus payments and severance paid to Ms. Brannon, who left us as chief financial officer in November 2022. PEO and Non-PEO NEO Compensation Actually Paid and Company Total Shareholder Return (“TSR”) We utilize several performance measures to align executive compensation with the Company’s performance, but historically have not used financial performance measures such as TSR. As described under the Executive Compensation section above, a significant portion of the compensation that our NEOs (other than Mr. Martinez) are eligible to receive consists of performance stock options that are designed to provide appropriate incentives to our executives to achieve defined Company and financial goals in 2022 from 2021. The Board believes that the amount of “at risk” compensation for its NEOs aligns with the interests of the Company’s stockholders, as demonstrated by the overall decrease in Compensation Actually Paid, particularly in the case of the PEO and when compared to the significant decline in our stock price, in part due to market conditions in which we have no control, since December 2021. All information contained in this report shallprovided above under the “Pay Versus Performance” heading will not be deemed to be “soliciting material” or “filed” or incorporated by reference in future filings with the SEC, or subject to the liabilitiesany filing of Section 18 of the Exchange Act, except to the extent that the Company specifically incorporates it by reference into a document filedour company under the Securities Act of 1933, as amended, whether made before or after the Exchange Act. The Compensation Committee has revieweddate hereof and discussed the Compensation Discussion and Analysis included in this Proxy Statement required by Item 402(b) of Regulation S-K with management and, based upon such review and discussion, the Compensation Committee has recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement.
| | | Compensation Committee:
| | | | Scott Stanford, Chair
Michael Lehman
Lisa Nelson
|
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATIONNo member of our Compensation Committee has served as one of our officers or employees at any time. None of our executive officers serves as a member of the compensation committeeirrespective of any other company that has an executive officer serving as a member of the Board. None of our executive officers serves as a member of the board of directors ofgeneral incorporation language in any other company that has an executive officer serving as a member of our Compensation Committee.such filing.
TABLE OF CONTENTS CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS The following is a description of transactions since JuneJanuary 1, 2020 (inception),2021 to which we have been a participant in which the amount involved, exceeded or will exceed $120,000, and in which any of our directors, executive officers or holders of more than 5% of our capital stock, or any members of their immediate family, had or will have a direct or indirect material interest, other than compensation arrangements which are described under “Executive Officer and Director Compensation.” EXCHANGE WITH CO-FOUNDERS AND EXECUTIVE OFFICERS
To facilitate the delivery of Astra Class B common stock by Mr. Kemp and Dr. London, Legacy Astra entered into an exchange agreement with Mr. Kemp and Dr. London, effective as of immediately prior to the consummation of the Business Combination, pursuant to which each share of Legacy Astra Class A common stock held by Mr. Kemp and Dr. London was automatically exchanged for one share of Astra Class B common stock such that as of immediately following the completion of the Business Combination, Mr. Kemp and Dr. London collectively held approximately 75% of the voting power of the capital stock of the Company on a fully-diluted basis.
SERIES C FINANCING
On January 28, 2021, Legacy Astra entered into a Series C Preferred Stock Purchase Agreement pursuant to which Legacy Astra issued an aggregate of 42,854,347 shares of Legacy Astra Series C preferred stock. 4,531,055 shares of Legacy Astra Series C preferred stock were issued at a purchase price of $6.62097 per share for aggregate consideration of approximately $29,999,979. In addition, 38,323,292 shares of Legacy Astra Series C preferred stock were issued upon the conversion of certain of Legacy Astra’s outstanding convertible promissory notes at a purchase price of $1.32703 or $1.70618 per share, for aggregate consideration of approximately $60,989,852. The outstanding shares of Legacy Astra Series C preferred stock were exchanged for shares of our Class A common stock in connection with the Closing.
The participants in this preferred stock financing include certain holders of more than 5% of Astra’s capital stock and/or entities related to Astra’s and Holicity’s directors at the Closing. The following table sets forth the aggregate number of shares of Legacy Astra Series C preferred stock issued to these related persons in this preferred stock financing:
A/NPC Holdings LLC | | | 7,819,887 | | | $10,377,225 | | | January 28, 2021 | Canaan X, L.P. | | | 2,151,738 | | | $3,078,271 | | | January 28, 2021 | ACME Capital(1) | | | 584,964 | | | $820,160 | | | January 28, 2021 | Pendrell Corporation(2) | | | 1,510,352 | | | $9,999,995 | | | January 28, 2021 |
(1)
| Mr. Stanford, a director of both Legacy Astra and the Company, is the co-founder of Acme, LLC and its affiliates, including Acme Capital. |
(2)
| Mr. McCaw, the Chairman and co-Chief Executive Officer of Pendrell Corporation, became a member of the Board upon Closing. |
AGREEMENTS WITH ASTRA STOCKHOLDERS
Investors’ Rights, Voting and Right of First Refusal Agreements
In connection with Legacy Astra’s Series C preferred stock financing, Legacy Astra entered into investors’ rights, voting and right of first refusal and co-sale agreements containing registration rights, information rights, voting rights and rights of first refusal, among other things, with holders of Legacy Astra’s preferred stock and certain holders of its common stock.
Investors’ Rights AgreementINVESTORS’ RIGHTS AGREEMENT
In connection with the execution of the Business Combination Agreement, Holicity, Legacy Astra, certain Holicity Stockholders and certain Legacy Astra stockholders entered into the Investors’ Rights Agreement, to be effective at the Closing. In addition, all other Legacy Astra stockholders that received capital stock of the Company in the Business Combination signed a joinder to the Investors’ Rights Agreement pursuant to a letter of transmittal. TABLE OF CONTENTS
Pursuant to the Investors’ Rights Agreement, the Company will be required to register for resale securities held by the stockholders party thereto. The Company will have no obligation to facilitate more than one demand made by the Pendrell Holicity Holdings Corporation (the “Sponsor”) or its affiliates that the Company register such stockholders’ securities. In addition, the holders have certain “piggyback” registration rights with respect to registrations initiated by the Company. The Company will bear the expenses incurred in connection with the filing of any registration statements pursuant to the Investors’ Rights Agreement. The Investors’ Rights Agreement also restricts the ability of Mr. Kemp, Dr. London and the Sponsor to transfer its shares of Class A common stock for a period of one year following the Closing, subject to certain permitted transfers, unless the closing price of the Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the Closing. In addition, the Investors’ Rights Agreement also restricts the ability of each stockholder who is a party thereto to transfer its shares of Class A common stock for a period of six months following the Closing, subject to certain permitted transfers. Bridge Loan with Pendrell
On May 20, 2021, Legacy Astra entered into the Bridge Loan with Pendrell Corporation as the lender, pursuant to which Pendrell agreed to make a loan to Legacy Astra in a principal amount of $25,000,000. Pendrell is the parent of Sponsor and entered into the Bridge Loan with Legacy Astra to provide it with liquidity during the period prior to the Closing. The Bridge Loan was repaid in full in connection with the Closing.
SHARES GRANTED TO MR. KEMP’S SPOUSE
The spouse of Mr. Kemp, our CEO, received a grant of 33,000 shares of RSUs on November 9, 2021, which were issued under the Plan. The RSUs were granted in connection with investor relations and marketing services provided to the Company. The RSUs vested on November 15, 2021.
COVID-19COVID TEST PURCHASES FROM CUE HEALTH INC.
We began purchasing COVID-19Covid-19 test readers and related test cartridges from Cue Health, Inc. in the late second quarter 2021, at their standard pricing. In August 2021, the Company entered into a six-month subscription arrangement with Cue Health, Inc. for the purchase of COVID-19Covid-19 test readers and the related test cartridges. Under Cue Health, Inc.’s standard subscription arrangement, we receive a twenty percent (20%) discount on each Cue Reader and fourteen percent (14%) discount on each test cartridge. Mr. Stanford, a member of the Board and our Lead Independent Director, servesat the time served on the board of directors of Cue Health, Inc. Funds affiliated with ACME Capital collectively beneficially own 10.4% 10.3%of the outstanding common stock of Cue Health, Inc. Mr. Stanford was not involved in the negotiation of our arrangement with Cue Health, Inc. We made purchases of $1.0 million under this agreement during 2022. The agreement was terminated in the fourth quarter of 2022. DIRECTOR AND OFFICER INDEMNIFICATION AND DIRECTORS’ AND OFFICERS’ LIABILITY INSURANCE Our Charter provides that we will indemnify our directors and officers to the fullest extent permitted by the DGCL. In addition, we have entered into indemnification agreements with our directors and officers. We also maintain a general liability insurance policy, which covers certain liabilities of directors and officers of the Company arising out of claims based on acts or omissions in their capacities as directors or officers. RELATED PERSON TRANSACTION POLICY The Board has adopted a written related person transaction policy that sets forth the following policies and procedures for the review and approval or ratification of related person transactions. This policy covers, with certain exceptions set forth in Item 404 of Regulation S-K under the Securities Act of 1933, as amended, or the Securities Act, any transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships, in which we were or are to be a participant, where the amount involved exceeds $120,000 in any fiscal year and a related person had, has or will have a direct or indirect material interest, including without limitation, purchases of goods or services by or from the related person or entities in which the related person has a material interest, indebtedness, guarantees of indebtedness and employment by us of a related person. In reviewing and approving any such transactions, our audit committee is tasked with considering all relevant facts and circumstances, including, but not limited to, whether the transaction is on terms comparable to those that could be obtained in an arm’s length transaction and the extent of the related person’s interest in the transaction. TABLE OF CONTENTS
DELINQUENT SECTION 16(a) REPORTSSection 16(a) of the Exchange Act requires the Company’s directors and executive officers and persons who beneficially own more than 10% of the Company’s Class A common stock to file with the SEC reports showing initial ownership of and changes in ownership of the Company’s Class A common stock and other registered equity securities. Based solely upon our review of the copies of such forms or written representations from certain reporting persons received by us with respect to fiscal year 2021, the Company believes that its directors and executive officers and persons who own more than 10% of a registered class of its equity securities have complied with all applicable Section 16(a) filing requirements for fiscal year 2021, except for the Forms 3 and 4 of Mr. Attiq filed on July 2, 2021. These forms contained inadvertent errors with respect to certain holdings of Mr. Attiq, and which were each amended to correct such errors pursuant to Forms 3/A and 4/A filed on July 16, 2021.
TABLE OF CONTENTS The information contained in this report shall not be deemed to be “soliciting material” or “filed” or incorporated by reference in future filings with the SEC, or subject to the liabilities of Section 18 of the Exchange Act, except to the extent that the Company specifically incorporates it by reference into a document filed under the Securities Act or the Exchange Act. We operate in accordance with a written charter adopted by the Board and reviewed annually by the Nominating and Corporate Governance Committee and us. We are responsible for overseeing the quality and integrity of Astra Space, Inc.’s accounting, auditing and financial reporting practices. In accordance with the rules of the SEC and Nasdaq, the Audit Committee is composed entirely of members who are independent, as defined by the listing standards of Nasdaq and Rule 10A-3 under the Exchange Act. Further, the Board has determined that Mr. Lehman is an audit committee financial expert as defined by the rules of the SEC. 1.
| The Audit Committee has reviewed and discussed the consolidated balance sheet of the Company and its subsidiaries as of December 31, 2022, and the related consolidated statements of operations, of comprehensive loss, of stockholders’ equity and of cash flows for the year then ended, including the related notes (collectively referred to as the “consolidated financial statements”) with management. |
2.
| The Audit Committee has discussed with PricewaterhouseCoopers LLP, our independent registered public accounting firm for year ended December 31, 2022, the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (the “PCAOB”) and the SEC. |
3.
| The Audit Committee has received the written disclosures and the letter from PricewaterhouseCoopers LLP required by applicable requirements of the PCAOB regarding PricewaterhouseCoopers LLP’s communications with the Audit Committee concerning independence, and has discussed with PricewaterhouseCoopers LLP its independence from the Company. |
4.
| Based on the review and discussions referred to above, the Audit Committee recommended to the Board that the consolidated financial statements be included in our Annual Report on Form 10-K for the year ended December 31, 2022. |
We believe that Holicity’s audit committee fully discharged its oversight responsibilities consistent with our charter, including with respect to the audit process. Holicity’s audit committee reviewed and discussed our audited financial statements for the period from January 1, 2021 (inception) through June 30, 2021, with management and WithumSmith+Brown, PC (“Withum”), the Company’s independent registered public accounting firm for that period. Management has the responsibility for the preparation of the Company’s financial statements, and Withum has the responsibility for the audit of those statements. We understand that Holicity’s audit committee discussed with Withum the matters required to be discussed by Public Company Accounting Oversight Board, or PCAOB, Auditing Standard No. 1301 and the SEC. We understand that Holicity’s audit committee received the written disclosures and the letter from Withum pursuant to Rule 3526, Communication with Audit Committees Concerning Independence, of the PCAOB, concerning any relationships between Withum and the Company and the potential effects of any disclosed relationships on Withum’s independence, and discussed with Withum its independence. Holicity’s audit committee reviewed with Withum their audit plans, audit scope, identification of audit risks and their audit efforts, and discussed and reviewed the results of Withum’s examination of the Company’s financial statements both with and without management.
On June 30, 2021 in connection with the consummation of the Merger, the Board approved the engagement of Grant Thornton LLP (“Grant Thornton”) as the independent registered public accounting firm for the fiscal year ended December 31, 2021, subject to ratification by Astra Space, Inc.’s stockholders. The stockholders ratified this appointment on September 29, 2021 at the Company’s 2021 Annual Meeting of Stockholders. Grant Thornton served as the independent registered public accounting firm for Legacy Astra prior to the Merger for the years ended December 31, 2020 and 2019.
The Audit Committee has reviewed with Grant Thornton the consolidated balance sheets of the Company and its subsidiaries as of December 31, 2021 and 2020, the related consolidated statements of operations, temporary equity and stockholders’ equity (deficit), and cash flows for each of the three years in the period ended December 31, 2021, and the related notes (collectively referred to as the “Financial Statements”). The Audit Committee has further reviewed and discussed the Financial Statements with management. The Audit Committee has discussed with Grant Thornton the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board and the SEC. The Audit Committee has received the written disclosures and the letter from Grant Thornton, required by applicable requirements of the Public Company Accounting Oversight Board regarding Grant Thornton’s communications with the Audit Committee concerning independence, and has discussed with Grant Thornton its independence from the Company. Based on the review and discussions referred to above, the Audit Committee recommended to the Board of Directors that the Financial Statements be included in our annual report on Form 10-K for the year ended December 31, 2021, for filing with the SEC.
On March 18, 2022, the Audit Committee dismissed Grant Thornton as the Company’s independent registered public accounting firm and approved the engagement of PwC as the Company’s independent registered public accounting firm for the Company’s fiscal year ending December 31, 2022, subject to stockholder ratification. The dismissal did not affect Grant Thornton’s engagement for the year ended December 31, 2021.
| | | Audit Committee: | | | | Michael Lehman, Chair | | | | Julie Cullivan | | | | Lisa Nelson | | | | Scott Stanford |
TABLE OF CONTENTS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM AUDIT AND NON-AUDIT FEES The following table presents fees for professional services rendered by PricewaterhouseCoopers LLP (“PwC”), our principal independent registered public accounting firm for the year ended December 31, 2022, and by Grant Thornton LLP (“GT”), our principal independent registered public accounting firm for the years ended December 31, 2021 and ended December 31, 2020.2021. As discussed above,below, the Audit Committee appointed PwC to serve as the Company’s independent registered public accounting firm for the year ended December 31, 2022. PwC did Audit Fees | | | $1,749,000 | | | $1,417,100 | Audit-Related Fees | | | — | | | — | Tax Fees | | | — | | | — | All Other Fees | | | 6,650 | | | — | Total | | | $1,755,650 | | | $1,417,100 |
For clarity, (a) the amounts provided in the table above do not provide anyinclude fees paid to WithumSmith+Brown as a result of performing services to Astra during the yearsCompany prior to the closing of the business combination on June 30, 2021; (b) amounts for the year-ended December 31, 2022, reflect only amounts paid to PwC; and (c) amounts for the year ended December 31, 2021, and December 31, 2020.reflect only amounts paid to Grant Thornton, including amounts paid to Grant Thornton for services provided to the legacy Astra, now Astra Space Operations, Inc., a wholly owned subsidiary of us, prior to the closing of the business combination. Audit Fees | | | $1,749,222 | | | $135,136 | Audit-Related Fees | | | — | | | — | Tax Fees | | | — | | | — | All Other Fees | | | — | | | — | Total | | | $1,749,222 | | | $135,136 |
AUDIT FEES For 2021 auditAudit Fees represents fees and expenses for professional services Grant Thornton billed us approximately $1,749,222 forprovided in connection with the audit of the Company’s annual consolidated financial statement,statements and the reviewreviews of the Company’s quarterly consolidated financial statements, advice on Form 10-Q that are customary under the standards of the PCAOB (United States). For the period from June 2, 2020 (inception) through December 31, 2020, Withum billed us approximately $135,136 in audit fees, which included approximately $85,490accounting matters directly related to the audit, and reviewaudit services provided in connection with our initial public offering and the Merger.other regulatory filings.
AUDIT-RELATED FEES
There were no audit-related fees billed to us by Grant Thornton for 2021 or Withum for 2020.
TAX FEES
There were no tax fees billed to us by Grant Thornton for 2021 or Withum for 2020.
ALL OTHER FEES There were no otherAll Other Fees represents license fees billed to us by Grant Thornton for 2021 and or Withum for 2020.PwC’s online research software in 2022.
PRE-APPROVAL BY AUDIT COMMITTEE OF PRINCIPAL ACCOUNTANT SERVICES The Audit Committee is responsible for appointing, setting compensation for, and overseeing the work of the independent registered public accounting firm. The Audit Committee has established a policy regarding pre-approval of all audit and permissible non-audit services provided by the independent registered public accounting firm. Unless the Audit Committee has pre-approved audit services or a specified category of non-audit services, any engagement to provide such services must be pre-approved by the Audit Committee if it is to be provided by the independent registered public accounting firm. The Audit Committee must also pre-approve any proposed services. Routine and recurring services provided by the Company’s independent registered public accounting firm within the specific service descriptions and budgets pre-approved by the Audit Committee may be undertaken without further authorization by the Audit Committee. The specific service descriptions and budgets pre-approved by the Audit Committee shall be initially established prior to the commencement of any service provided. The Audit Committee’s pre-approval is effective only for services to be provided in the fiscal year for which the services were pre-approved, unless the Audit Committee specifically provides for a different period. Any engagement of the independent auditors for a specific service with fees proposed to exceed $100,000 requires approval by the Audit Committee. Any later changes in terms, conditions, scope or fees shall require further Audit Committee pre-approval. Further, Audit Committee approval is required for all internal control-related services (other than those performed as part of the annual audit).
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Any other engagement of the independent auditors for a specific service that does not require Audit Committee pre-approval may be pre-approved by a member or members of the Audit Committee to whom such authority is delegated by the Audit Committee. In addition, each of the Audit Committee members has the authority to TABLE OF CONTENTS pre-approve any audit services if the need for consideration of a pre-approval request arises between regularly scheduled meetings. Any services approved by a delegated member or members of the Audit Committee is communicated to the Audit Committee at its next regularly scheduled meeting. CHANGES IN INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM On June 30, 2021, the Audit Committee approved the engagement of Grant Thornton LLP (“Grant Thornton”) as our independent registered public accounting firm to audit our consolidated financial statements for the year ended December 31, 2021. Grant Thornton served as independent registered public accounting firm of Legacy Astra, now known as Astra Space Operations, Inc. and a wholly-owned subsidiary of us, prior to the business combination which closed on June 30, 2021 and dismissed WithumSmith+Brown (“Withum”), as Holicity’s (now known as us) independent registered public accounting firm. This decision was ratified by the Company’s board of directors. The reports of Withum on Holicity’s financial statements as of and for the period from June 2, 2020 (inception) to December 31, 2020 did not contain an adverse opinion or a disclaimer of opinion, and were not qualified or modified as to uncertainties, audit scope or accounting principles. During Holicity’s fiscal year ending December 31, 2020 and the subsequent interim period through March 31, 2021, there were no disagreements between Holicity and Withum on any matter of accounting principles or practices, financial disclosure or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Holicity, would have caused it to make reference to the subject matter of the disagreements in its reports on Holicity’s financial statements for such years. During Holicity’s fiscal year ending December 31, 2020 and the subsequent interim period through March 31, 2021, there were no “reportable events” (as defined in Item 304(a)(1)(v) of Regulation S-K under the Securities Exchange Act of 1934, as amended). During the period from June 2, 2020 (inception) through December 31, 2020, and the subsequent interim period through the date of Withum’s dismissal, the Company did not consult with Grant Thornton regarding either (i) the application of accounting principles to a specified transaction, either completed or proposed; or the type of audit opinion that might be rendered on the financial statements of the Company, and no written report or oral advice was provided that Grant Thornton concluded was an important factor considered by us in reaching a decision as to the accounting, auditing, or financial reporting issue; or (ii) any matter that was either the subject of a “disagreement” (as defined in Item 304(a)(1)(iv) of Regulation S-K under the Exchange Act) or a “reportable event” (as defined in Item 304(a)(1)(v) of Regulation S-K under the Exchange Act). This disclosure is consistent with prior disclosures regarding our change in independent registered accounting firms from Withum to Grant Thornton. We had previously provided Withum with a copy of the foregoing disclosures and had requested that Withum furnish the Company with a letter addressed to the SEC stating whether it agrees with the statements made by the Company set forth above. A copy of Withum’s letter to the SEC, dated June 30, 2021, was filed as Exhibit 16.1 to the Company’s Current Report on Form 8-K, filed with the SEC on July 1, 2021. On March 18, 2022, the Audit Committee dismissed Grant Thornton as the Company’s independent registered public accounting firm. Grant Thornton was previously engaged to audit the Company’s consolidated financial statements for the year ended December 31, 2021. The dismissal did not affect Grant Thornton’s engagement for the year ended December 31, 2021. As described below, the change in independent registered public accounting firm is not the result of any disagreement with Grant Thornton. Grant Thornton had served as the Company’s independent registered public accounting firm since the Business Combination, and it served as Legacy Astra’s independent registered public accounting firm since the fourth quarter of 2020 and performed audits of Legacy Astra’s financial statements for the fiscal years ended December 31, 2019 and 2020. Grant Thornton also audited Astra’s financial statements for the year ended December 31, 2021. Grant Thornton’s audit reports on the financial statements for the fiscal years ended December 31, 2019, 2020 and 2021 did not provide an adverse opinion or disclaimer of opinion to our financial statements, nor modify its opinion as to uncertainty, audit scope or accounting principles, except that Grant Thornton’s audit reports for the fiscal years ended December 31, 2019 and 2020 included a statement of substantial doubt about our ability to continue as a going concern. No similar statement, with respect to our ability to continue as a going concern, was provided for the fiscal year ended December 31, 2021. Grant Thornton’s audit report for the fiscal year ended December 31, 2021 included TABLE OF CONTENTS a paragraph regarding Astra changing its method of accounting for leases as of January 1, 2021 due to the adoption of Accounting Standards Update No. 2016-02, Leases, (Topic 842). During the fiscal years ended December 31, 2019, 2020 and 2021, there were no “disagreements” within the meaning of Item 304(a)(1)(iv) of Regulation S-K and the related instructions between the Company and Grant Thornton on any matters of accounting principles or practices, financial statement disclosures or auditing scope or procedures which, if not resolved to Grant Thornton’s satisfaction, would have caused Grant Thornton to make reference thereto in its reports on the financial statements of the Company for such years. During the fiscal years ended December 31, 2019, 2020 and 2021, there were no “reportable events” (as that term is defined in Item 304(a)(1)(v) of Regulation S-K), other than the material weaknesses identified in our public reports for the fiscal years ended December 31, 2019, 2020 and 2021. This disclosure is consistent with prior disclosures regarding our change in independent registered accounting firms from Grant Thornton to PwC, and we have provided Grant Thornton with a copy of these disclosures in response to Item 304(a) of Regulation S-K and requested that Grant Thornton furnish us with a copy of their letter addressed to the SEC pursuant to Item 304(a)(3) of Regulation S-K, stating whether Grant Thornton agrees with the statements made by us here. Copies of Grant Thornton’s letters to the SEC, dated March 23, 2022, May 5, 2022 and August 26, 2022, were filed with the Company’s Current Report on Form 8-K, Post-Effective Amendment No. 1 to Registration Statement on Form S-1 and Registration Statement on Form S-1, filed with the SEC on March 23, 2022, May 5, 2022 and August 26, 2022, respectively. On March 18, 2022, our Audit Committee approved the engagement of PricewaterhouseCoopers LLP (“PwC”) as the Company’s new independent registered public accounting firm for the Company’s fiscal year ending December 31, 2022, subject to PwC’s completion of its client acceptance procedures. During the fiscal years ended December 31, 2019, 2020 and 2021 and through March 18, 2022, neither we, nor anyone on its behalf, consulted PwC regarding either (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on our financial statements, and neither a written report nor oral advice was provided to us that PwC concluded was an important factor considered by us in reaching a decision as to any accounting, auditing or financial reporting issue; or (ii) any matter that was the subject of a “disagreement” (as defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions) or a “reportable event” (as described in Item 304(a)(1)(v) of Regulation S-K). TABLE OF CONTENTS STOCKHOLDER PROPOSALS FOR THE 20232024 ANNUAL MEETING REQUIREMENTS FOR STOCKHOLDER PROPOSALS TO BE CONSIDERED FOR INCLUSION IN OUR PROXY MATERIALS To be considered for inclusion in next year’s proxy statement for the 20232024 annual meeting of stockholders, stockholder proposals pursuant to Rule 14a-8 under the Exchange Act must be received by our Corporate Secretary, at Astra Space, Inc., 1900 Skyhawk Street, Alameda, CA 94501 no later than February 1, 2023,9, 2024, which is 120 days prior to June 1, 2023.8, 2024. REQUIREMENTS FOR STOCKHOLDER PROPOSALS OR DIRECTOR NOMINATIONS TO BE BROUGHT BEFORE AN ANNUAL MEETING Our Bylaws provide that, for stockholder nominations to the Board or other proposals to be considered at an annual meeting, the stockholder must have given timely notice thereof in writing to the Corporate Secretary, at Astra Space, Inc., 1900 Skyhawk Street, Alameda, CA 94501. To be timely for the 20232024 annual meeting, the stockholder’s notice must be delivered to or mailed and received by us not before February 1, 20239, 2024 or after March 3, 2023,10, 2024, which is not more than 120 days, and not less than 90 days prior to June 1, 2023.8, 2024. If the 20232024 annual meeting of stockholders is more than 30 days before or more than 60 days after June 1, 2023,8, 2024, notice by the stockholder to be timely must be delivered not earlier than the close of business 120 days before the meeting and not later than the later of (i) the close of business 90 days before the meeting or (ii) the close of business 10 days following the day on which public announcement of the date of the 20232024 annual meeting is first made by the Company. Such notice must provide the information required by our amended and restated bylaws with respect to each matter the stockholder proposes to bring before the 20232024 annual meeting. ToIn addition to complying with the deadlines set forth above, to comply with the universal proxy rules (once effective),of the SEC, stockholders who intend to solicit proxies in support of director nominees other(other than nominees of the BoardBoard) for the 20232024 annual meeting of stockholders must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act and postmarked or transmitted electronically no later than April 2, 2022,9, 2024, which is 60 days prior to June 1, 2023.8, 2024.
REQUESTING ADDITIONAL MATERIALS Stockholders may request additional copies of the proxy materials or Notice of Availability by contacting Broadridge Financial Solutions, Inc. by telephone at 1-800-579-1639 or by e-mail at sendmaterial@proxyvote.com. We are mailing a full set of our printed proxy materials to stockholders on or about April 29, 2022.28, 2023. On this date, all stockholders of record and beneficial owners will have the ability to access all of the proxy materials on the website at https://astra.com. HOUSEHOLDING OF PROXY MATERIALS We have adopted a procedure approved by the SEC called “householding.” Under this procedure, multiple stockholders who share the same last name and address and do not participate in electronic delivery will receive only one copy of the proxy materials. We have undertaken householding to reduce our printing costs and postage fees. Stockholders may elect to receive individual copies of the proxy materials or Notice of Availability at the same address by contacting Broadridge Financial Solutions, Inc. by telephone at 1-866-540-7095, by mail at Broadridge Financial Solutions, Inc., Householding Department, 51 Mercedes Way, Edgewood, New York 11717, or by e-mail at sendmaterial@proxyvote.com. Stockholders who are receiving individual copies of such materials and who would like to receive single copies at a shared address may contact Broadridge Financial Solutions, Inc. with this request by using the contact information provided above. TABLE OF CONTENTS INFORMATION ABOUT THE MEETING AND VOTING PURPOSES OF THE ANNUAL MEETING The purposes of the Annual Meeting are: 1.
| To elect onethree Class II directorIII directors to serve until the 20252026 Annual Meeting of Stockholders.Stockholders; |
2.
| To approve the Reverse Stock Split Proposal; |
3.
| To approve the LTIP Proposal; |
4.
| To approve an amendment to the Astra Space, Inc.2021 Omnibus Incentive Plan to increase the number of shares of Class A common stock authorizedavailable for issuance under the Plan by 6,000,000 shares.(the “Amendment to the 2021 Omnibus Incentive Plan Proposal”); and |
3.5.
| To ratify the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2022. |
4.
| To approve, on a non-binding advisory basis, the compensation of our named executive officers; and |
5.
| To approve, on a non-binding advisory basis, the frequency of the non-binding advisory vote on executive compensation.2023. |
STOCKHOLDERS ENTITLED TO VOTE AT THE ANNUAL MEETING The Board has established the close of business on April 21, 202210, 2023 as the “record date” for the Annual Meeting. This means that you are entitled to vote at this meeting (and any adjournments) if our records show that you owned our common stockCommon Stock at that time. As of this record date, (i) 208,614,084215,286,444 shares of our Class A common stockCommon Stock were issued and outstanding, held by approximately 12198 registered stockholders of record and (ii) 55,539,188 shares of our Class B common stockCommon Stock were issued and outstanding, held by two registered stockholders of record. Each issued and outstanding share of Class A common stockCommon Stock as of the record date is entitled to one vote and each issued and outstanding share of Class B common stockCommon Stock as of the record date is entitled to 10 votes on each matter properly to come before the Annual Meeting (except Proposal No. 3 for the reasons discussed below) and can be voted only if the record owner of that share, determined as of the record date, is present by remote communication at the meeting or represented by proxy. A list of stockholders entitled to vote will be available for examination during the annual meeting at www.virtualshareholdermeeting.com/ASTR2022ASTR2023. VOTING SHARES THAT YOU HOLD IN YOUR NAME VOTE BY INTERNET — www.proxyvote.com. Use the Internet to transmit your voting instructions up until 11:59 p.m., Eastern Time, on May 31, 2022.June 7, 2023. Please have the Notice in hand when you access the website. Follow the steps outlined on the secured website to vote your shares. VOTE BY PHONE — Use a touch tone phone by calling the toll-free number 1-800-690-6903 to transmit your voting instructions up until 11:59 p.m., Eastern Time, on May 31, 2022. Please have the Notice in hand when you access the phone number. Follow the steps outlined on the phone line to vote your shares.
VOTE BY MAIL — If you requested and received a proxy card by mail, mark, sign and date your proxy card and return it in the postage-paid envelope we will provide or mail it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. If you vote by mail, we must receive your proxy card no later than 6:00 p.m. Eastern Time, on May 31, 2022.June 7, 2023. VOTE BY PHONE — Use a touch tone phone by calling the toll-free number 1-800-690-6903 to transmit your voting instructions up until 11:59 p.m., Eastern Time, on June 7, 2023. Please have the Notice in hand when you access the phone number. Follow the steps outlined on the phone line to vote your shares. VOTE BY REMOTE COMMUNICATION AT THE VIRTUAL ANNUAL MEETING — See “Attending the Annual Meeting,” below. In light of the public health concerns related to the ongoing COVID-19 pandemic and afterAfter careful consideration, the Board has determined to hold a virtual meeting in order to facilitate stockholder attendance and participation by enabling stockholders to participate from any location and at no cost.
To participate in the Annual Meeting, stockholders as of the record date, or their duly appointed proxies, will need the 16-digit control number provided on the proxy card, voting instructions form or Notice. We encourage you to access the meeting 10 minutes before the start time of 9:10:00 a.m., Pacific Time, on June 1, 2022.8, 2023. Please allow ample time for online check-in, which will begin at 8:9:30 a.m., Pacific Time, on June 1, 2022.8, 2023. If you encounter any difficulties accessing the virtual meeting during the check-in or meeting time, please call the technical support number that will be posted on the virtual stockholder meeting log in page. TABLE OF CONTENTS We are committed to ensuring that stockholders will be afforded the same rights and opportunities to participate as they would at an in-person meeting. You will be able to attend the meeting online, vote your shares electronically and submit questions during the meeting by visiting www.virtualshareholdermeeting.com/ASTR2022ASTR2023. We will try to answer as many stockholder-submitted questions as time permits that comply with the meeting rules of conduct. However, we reserve the right to edit inappropriate language or to exclude questions that are not pertinent to meeting matters or that are otherwise inappropriate. If we receive substantially similar questions, we will group such questions together and provide a single response to avoid repetition. Instructions on how to attend and participate via the Internet, including how to demonstrate proof of ownership, will be posted at www.virtualshareholdermeeting.com/ASTR2022ASTR2023. ATTENDING THE ANNUAL MEETING The Annual Meeting will be held entirely online at www.virtualshareholdermeeting.com/ASTR2022ASTR2023. A summary of the information you need to attend the Annual Meeting online is provided below: Instructions on how to attend and participate via the Internet, including how to demonstrate proof of common stock ownership, are posted at www.virtualshareholdermeeting.com/ASTR2022ASTR2023. Questions regarding how to attend and participate via the Internet will be answered by calling 1-800-690-6903 on the day before the annual meeting and the day of the Annual Meeting. Please have your 16-digit control number to enter the Annual Meeting. Stockholders may submit questions via the Internet while attending the Annual Meeting. The Annual Meeting webcast will begin promptly at 9:10:00 a.m., Pacific Time. We encourage you to access the meeting prior to the start time. Online check-in will begin at 8:9:30 a.m., Pacific Time, and you should allow ample time for the check-in procedures. Webcast replay of the Annual Meeting will be available until the sooner of June 1, 20238, 2024 or the date of the next annual meeting of stockholders to be held in 2023.2024. ASKING QUESTIONS DURING THE ANNUAL MEETING Only our stockholders of record as of April 21, 2022,10, 2023, are permitted to ask questions during the Annual Meeting. If you wish to submit a question during the Annual Meeting, log into the virtual meeting platform at www.virtualshareholdermeeting.com/ASTR2022ASTR2023, type your question into the “Ask a Question” field, and click “Submit.” Questions relevant to Annual Meeting matters will be answered during the Annual Meeting, subject to time constraints. Generally, stockholder questions must be relevant to the agenda items then before the Annual Meeting. Stockholder questions or remarks must be pertinent to matters addressed at the Annual Meeting. Questions from multiple stockholders on the same topic or that are otherwise related may be grouped, summarized, and answered together. TECHNICAL ASSISTANCE FOR THE ANNUAL MEETING We will have technicians ready to assist you with any technical difficulties you may have accessing the virtual meeting website. If you encounter any difficulties accessing the virtual meeting website during the check-in or meeting time, please call the technical support number that will be posted on the annual meeting login page. VOTING SHARES THAT YOU HOLD IN BROKERAGE OR SIMILAR ACCOUNTS Many stockholders hold their shares through a broker, bank or other nominee rather than directly in their own name. If you hold your shares in one of these ways, you are considered a beneficial owner, not a record owner, and you therefore have no direct vote on any matter to come before the Annual Meeting. Your broker, bank, or nominee will send you voting instructions for you to use in directing the broker, bank or nominee in how to vote your shares. Your broker, bank, or nominee may allow you to deliver your voting instructions via the telephone or the Internet. If you hold your shares through a broker and you do not timely provide your broker with specific instructions on how to vote your shares, your broker will not be authorized to cast a vote on your behalf on Proposals 1, 2, 4 or 53 but will TABLE OF CONTENTS will be authorized to cast a vote on your behalf, in its discretion, on Proposal 3.4. In such cases, a “broker non-vote” may be entered with respect to your shares on Proposals 1, 2 4 or 53 to reflect that your broker was present with respect to your shares at the meeting but was not exercising voting rights on your behalf with respect to those shares.
TREATMENT OF ABSTENTIONS AND BROKER NON-VOTES An abstention occurs when a stockholder abstains from voting or does not vote on a proposal. As explained above, a “broker non-vote” occurs when a broker has not received voting instructions from the beneficial owner and the broker does not have discretionary authority to vote the shares because the proposal is non-routine. Abstentions and broker non-votes will be treated as follows with respect to votes on each of the proposals: 1. | | | Election of Class II Director | | | Not considered votes properly cast and therefore will have no effect on this proposal. | | | No effect on this proposal. | 2. | | | Reverse Stock Split Proposal | | | Counted toward the tabulation of votes on this proposal and will have the same effect as a vote AGAINST this proposal. | | | No effect on this proposal. | 3. | | | LTIP Proposal | | | Counted toward the tabulation of votes on this proposal and will have the same effect as a vote AGAINST this proposal except that an abstention by Mr. Kemp, Dr. London or Mr. Attiq will have no effect on this proposal because the Board has determined that such persons have an interest in the outcome of this proposal and are not entitled to vote thereon and thus, any vote cast by such persons is not a vote that is properly cast. | | | No effect on this proposal. | 4. | | | Amendment to 2021 Omnibus Incentive Plan Proposal | | | Counted toward the tabulation of votes on this proposal and will have the same effect as a vote AGAINST this proposal. | | | No effect on this proposal. | 3.5.
| | | PwC Ratification Proposal | | | Counted toward the tabulation of votes on this proposal and will have the same effect as a vote AGAINST this proposal | | | Not applicable since brokers have discretionary authority to vote on this proposal. | 4.
| | | Say on Pay Proposal
| | | Counted toward the tabulation of votes on this proposal and will have the same effect as a vote AGAINST this proposal.
| | | No effect on this proposal.
| 5.
| | | Say on Frequency Proposal
| | | Counted toward the tabulation of votes on this proposal and will have the same effect as a vote AGAINST this proposal.
| | | No effect on this proposal.
|
YOUR VOTING OPTIONS ON EACH OF THE PROPOSALS You may vote “for,” or “withhold” (meaning you choose to withhold from the proxy holder named in the proxy card your authority to vote), with respect to the election of the nomineenominees for Class IIIII director (Proposal 1). You may vote “for,” “against,” or “abstain” with respect to the proposal on the PlanReverse Stock Split Proposal (Proposal 2). You may vote “for,” “against,” or “abstain” with respect to the proposal on the PwC RatificationLTIP Exchange Proposal (Proposal 3). You may vote “for,” “against,” or “abstain” with respect to the Sayproposal on Paythe Amendment to the 2021 Omnibus Incentive Plan Proposal (Proposal 4). You may vote “1 year,“for,” “2 years,” “3 years,“against,” or “abstain” with respect to the Sayproposal on Frequencythe PwC Ratification Proposal (Proposal 5). If any other matter is presented at the Annual Meeting, your proxy provides that your shares will be voted by the proxy holder named in the proxy card in accordance with his or her best judgment. At the time this Proxy Statement was first made available, we knew of no matters that needed to be acted on at the Annual Meeting, other than those discussed in this Proxy Statement. TABLE OF CONTENTS THE BOARD’S VOTING RECOMMENDATIONS The Board of Directors recommends that you vote: FOR with respect to the election as director the individual named as nominee in this Proxy Statement (Proposal 1). FOR the Reverse Stock Split Proposal (Proposal 2). FOR the LTIP Proposal (Proposal 3). FOR the Amendment to the 2021 Omnibus Incentive Plan Proposal (Proposal 2)4). FOR the PwC Ratification Proposal (Proposal 3). FOR the Say on Pay Proposal (Proposal 4).
THREE YEARS with respect to the Say on Frequency Proposal (Proposal 5).
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If any other matter is properly brought before the Annual Meeting, the Company – through the individual named in the proxy and acting as the “proxy holder,” or his or her designee, and pursuant to the blanket authorization granted under the proxy – will vote your shares on that matter in accordance with the discretion and judgment of the proxy holder. REQUIRED VOTES TO APPROVE EACH PROPOSAL Holders of our Class A common stockCommon Stock are entitled to cast one vote per share on all matters to be voted on at the Annual Meeting. Holders of our Class B common stockCommon Stock are entitled to cast 10 votes per share on all matters to be voted on at the Annual Meeting.Meeting, except for Proposal 3 since all holders of Class B Common Stock (e.g. Mr. Kemp and Dr. London”) have a direct interest in the outcome of Proposal 3 and the Board has determined that such persons are not entitled to vote on such Proposal. Votes cast by the Class B Holders on Proposal 3 will not be deemed to be properly cast and will not be counted toward the tabulation of the votes. The holders of our Class A common stockCommon Stock and our Class B common stockCommon Stock shall vote together as a single class on all matters to be voted on at the Annual Meeting.Meeting, except Proposal 3 in which only the holders of Class A Common Stock are entitled to vote. The election of directordirectors shall be determined by a majority of the votes properly cast at the Annual Meeting in respect of the shares present in person (including virtually) or represented by proxy at the meeting and entitled to vote on the election of director. If thea director nominee does not receive the affirmative vote of a majority of the votes case,cast, he or she will not be elected. Holders of our Class A common stockCommon Stock and Class B common stockCommon Stock are not entitled to cumulative voting rights under the Charter. In addition, the affirmative vote of a majority of the issued and outstanding shares of Class A Common Stock and Class B Common Stock, voting as a single class, are required to approve the Reverse Stock Split Proposal. A majority of the votes properly cast at the meeting in respect of shares present in person (including virtually) or represented by proxy and entitled to vote on any of the following proposals will approve: (i) the LTIP Proposal, (ii) the Amendment to the 2021 Omnibus Incentive Plan Proposal; (ii)(iii) the PwC Ratification Proposal; (iii) the Say on Pay Proposal; and (iv)(iii) all other matters that arise at the Annual Meeting. Only “for” and “against” votes will affect the outcome. Please note, however, that because the vote on the PwC Ratification Proposal and the Say on Pay Proposal is advisory in nature, the results of such vote will not be binding upon the Board or its Committees. The SayCommittees and because the vote on Frequencythe Reverse Stock Split authorizes the Board to approve the reverse stock split in a range and at a time to be determined in its discretion, the Reverse Stock Split may not occur. None of Mr. Kemp, Dr. London or Mr. Attiq are permitted to vote on the LTIP Proposal requires a majoritybecause they all have grants under the LTIP plan and are therefore interested in the outcome of the votes properly cast atLTIP Proposal. Further, if the meeting in respect of shares present in person (including virtually) or represented by proxy to approve one of the frequency options (one, two, or three years). If none of the frequency options receive a majority of the votes properly cast at the meeting, the frequency option that receives the highest number of votes cast will be considered to be the frequency selected by stockholders. Although this voteLTIP Proposal is advisory and therefore not binding on the Company, the Board andapproved, the Compensation Committee will have the discretion to issue new performance stock options to Mr. Kemp, Dr. London and Mr. Attiq, provided that the new performance stock options must be granted no later than July 31, 2023, have an exercise price equal to the fair market value the opinions of stockholders and will consider the outcomea share of this advisory vote in determining when to seek the stockholders’ non-binding advisory voteour Class A Common Stock on the compensationdate of our named executive officers at future annual meetings.grant and be exercisable, subject to the satisfaction of the vesting conditions and performance metrics, in an amount of no more than 4.0 million shares for Mr. Kemp and 1.0 million shares for each of Dr. London and Mr. Attiq. If the LTIP Proposal and the Amendment to the 2021 Omnibus Incentive Plan Proposal are both approved, the number of shares available for issuance under the 2021 Omnibus Incentive Plan will be increased by 237,867 shares. If the LTIP Proposal is not approved and the Amendment to the 2021 Omnibus Incentive Plan Proposal is approved, then the number of shares available for issuance under the 2021 Omnibus Incentive Plan will be increased by 4.0 million shares.
TABLE OF CONTENTS QUORUM The presence, in person (including virtually) or by proxy, of the holders of shares of outstanding capital stock of the Company representing a majority of the voting power of all outstanding shares of capital stock of the Company entitled to vote at the Annual Meeting will constitute a quorum for the transaction of business. Abstentions, withheld votes, and broker non-votes, if any, will be included in the calculation of the number of shares considered to be present at the meeting to determine whether a quorum has been established. VOTING ON POSSIBLE OTHER MATTERS We are not aware that any person intends to propose that any matter, other than the five numbered proposals specifically described by this Proxy Statement, be presented for consideration or action by our stockholders at the Annual Meeting. If any such other matter should properly come before the Annual Meeting, however, favorable action on such matter would generally require the affirmative vote of a majority of the votes properly cast in respect of shares present in person (including virtually) or by proxy at the Annual Meeting, unless our Charter or Bylaws or applicable law require otherwise. If you vote by proxy, you will be granting the proxy holder authority to vote your shares on any such other matter in accordance with his or her discretion and judgment. REVOCATION OF PROXIES OR VOTING INSTRUCTIONS A stockholder of record who has delivered a proxy card in response to this solicitation may revoke it before it is exercised at the Annual Meeting by executing and delivering a timely and valid later-dated proxy, by a timely and valid later Internet or telephone vote, by voting by remote communication at the meeting or by giving written notice to the Corporate Secretary. Attendance at the meeting online will not have the effect of revoking a proxy unless a stockholder gives proper written notice of revocation to the Corporate Secretary before the proxy is exercised or the stockholder votes by remote communication at the meeting. Beneficial owners who have directed their broker, bank or nominee as to how to vote their shares should contact their broker, bank, or nominee for instructions as to how they may revoke or change those voting directions. TABLE OF CONTENTS
SOLICITATION OF PROXIES The Board is making this solicitation of proxies for the Annual Meeting. We will bear all costs of this solicitation, including the cost of preparing and distributing this Proxy Statement, the Form 10-K and the enclosed form of proxy card and including the cost of hosting the virtual meeting. After the initial distribution of this Proxy Statement, proxies may be solicited by mail, telephone, or personally by directors, officers, employees, or agents of the Company. Brokerage houses and other custodians, nominees and fiduciaries will be requested to forward soliciting materials to beneficial owners of shares held by them for the accounts of beneficial owners, and we will pay their reasonable out-of-pocket expenses. STOCKHOLDER LIST The names of stockholders of record entitled to vote at the Annual Meeting will be available at the Annual Meeting and for 10 days prior to the Annual Meeting for any purpose germane to the Annual Meeting, between the hours of 9:00 a.m. and 5:00 p.m., Pacific Time, at our principal executive office at 1900 Skyhawk Street, Alameda, California 94501. Please contact our Corporate Secretary if you wish to review the list of stockholders at our principal executive office. TRANSFER AGENT Our transfer agent is Continental Stock Transfer & Trust Company. All communications concerning stockholder inquiries can be handled by contacting: Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, NY 10004
Attention: Proxy Department
Telephone: (212) 509-4000
E-mail: proxy@continentalstock.com TABLE OF CONTENTS CERTIFICATE OF AMENDMENT
TO
SECOND AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
ASTRA SPACE, INC. Astra Space, Inc. (the “Corporation”), a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the “DGCL”), hereby certifies that: 1.
| The name of the Corporation is Astra Space, Inc. The Corporation’s Certificate of Incorporation was originally filed with the Secretary of State of the State of Delaware on June 2, 2020, under the name of Holicity, Inc. |
2.
| The Amended and Restated Certificate of Incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on August 5, 2020. |
3.
| The Second Amended and Restated Certificate of Incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on June 30, 2021 (the “Charter”). |
4.
| The Board of Directors of the Corporation (the “Board”), acting in accordance with the provisions of Sections 141 and 242 of the DGCL, duly adopted resolutions to amend the Charter as follows: |
Article IV of the Charter is hereby amended by adding the following new paragraph C, Reverse Stock Split, at the end of Article IV: “That, effective upon the effective time of this Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation (this “Certificate of Amendment”) with the Secretary of State of the State of Delaware (the “Effective Time”), a one-for-[]1 reverse stock split of the Corporation’s Class A Common Stock, par value $0.0001 per share (“Class A Common Stock”) and Class B Common Stock, par value $0.0001 per share (“Class B Common Stock”), shall become effective, pursuant to which: (i) each [] shares of Class A Common Stock outstanding and held of record by each stockholder of the Corporation [(including treasury shares)] immediately prior to the Effective Time shall be reclassified and combined into one validly issued, fully paid and nonassessable share of Class A Common Stock automatically and without any action by the holder thereof upon the Effective Time and shall represent one share of Class A Common Stock from and after the Effective Time; and (ii) each []1 shares of Class B Common Stock outstanding and held of record by each stockholder of the Corporation [(including treasury shares)] immediately prior to the Effective Time shall be reclassified and combined into one validly issued, fully paid and nonassessable share of Class B Common Stock automatically and without any action by the holder thereof upon the Effective Time and shall represent one share of Class B Common Stock from and after the Effective Time (such reclassification and combination of shares, the “Reverse Stock Split”). The par value of the Class A Common Stock and the Class B Common Stock following the Reverse Stock Split shall remain at $0.0001 per share. No fractional shares of Class A Common Stock or Class B Common Stock shall be issued as a result of the Reverse Stock Split and, in lieu thereof, upon surrender after the Effective Time of a book entry position which formerly represented shares of Class A Common Stock or Class B Common Stock that were issued and outstanding immediately prior to the Effective Time, any person who would otherwise be entitled to a fractional share of Class A Common Stock or Class B Common Stock as a result of the Reverse Stock Split, following the Effective Time, shall be entitled to a rounding up of their fractional share to the nearest whole share. No stockholder will receive cash in lieu of fractional shares. Each book entry position that, immediately prior to the Effective Time, represented shares of Class A Common Stock or Class B Common Stock that were issued and outstanding immediately prior to the Effective Time shall, from and after the Effective Time, automatically and without the necessity of presenting the same for exchange, represent that number of whole shares of Class A Common Stock or Class B Common Stock, as applicable, after the Effective Time into which the shares formerly represented by such certificate or book entry position TABLE OF CONTENTS have been reclassified (subject to the adjustment for fractional shares as described above); provided, however, that each person of record holding a book entry position that represented shares of Class A Common Stock or Class B Common Stock that were issued and outstanding immediately prior to the Effective Time shall receive, upon surrender of such book entry position, a new book entry position evidencing and representing the number of whole shares (subject to the adjustment for fractional shares as described above); of Class A Common Stock or Class B Common Stock, as applicable, after the Effective Time into which the shares of Class A Common Stock or Class B Common Stock, as applicable, formerly represented by such certificate or book entry position shall have been reclassified.” 5.
| Thereafter pursuant to a resolution of the Board, this Certificate of Amendment was submitted to the stockholders of the Corporation for their approval and was duly adopted at an annual meeting of the stockholders of the Corporation, in accordance with the provisions of Section 242 of the DGCL. |
6.
| All other provisions of the Charter as currently on file with the Secretary of State of the State of Delaware shall remain in full force and effect. |
IN WITNESS WHEREOF, the Corporation on has caused this Certificate of Amendment to be duly executed and acknowledged in its name and on its behalf by an authorized officer this day of , 2023. | | | ASTRA SPACE, INC. | | | | | | | | | | | By: | | | | | | | Name: | | | | | | | Title: | | | |
TABLE OF CONTENTS ASTRA SPACE, INC. 2021 OMNIBUS INCENTIVE PLAN, AS AMENDED 1. DEFINED TERMS
Exhibit A, which is incorporated by reference, defines certain terms used in the Plan and includes certain operational rules related to those terms. 2. PURPOSE
The Plan has been established to advance the interests of the Company by providing for the grant to Participants of Stock and Stock-based Awards. 3. ADMINISTRATION
The Plan will be administered by the Administrator. The Administrator has discretionary authority, subject only to the express provisions of the Plan, (i) to administer and interpret the Plan and any Awards; (ii) to determine eligibility for and grant Awards; (iii) to determine the exercise price or the base value from which appreciation is measured, or the purchase price, if any, applicable to any Award; (iv) to determine, modify, accelerate or waive the terms and conditions of any Award; (v) to determine the form of settlement of Awards (whether in cash, shares of Stock, other Awards or other property); (vi) to prescribe forms, rules and procedures relating to the Plan and Awards; and (vii) otherwise to do all things necessary or desirable to carry out the purposes of the Plan or any Award. Determinations of the Administrator made with respect to the Plan or any Award are conclusive and bind all persons. 4. LIMITS ON AWARDS UNDER THE PLAN
4.
| LIMITS ON AWARDS UNDER THE PLAN |
4.1 Number of Shares. Subject to adjustment as provided in Section 8.2, the maximum number of shares of Stock that may be delivered in satisfaction of Awards under the Plan is 55,913,738[____]1 shares (the “Initial Share Pool”). The Initial Share Pool will automatically increase on January 1 of each year from 20232024 to 2031 by the lesser of (i) five percent (5%) of the sum of the number of shares of (x) Stock and (y) the Company’s Class B common stock, par value $0.0001 per share, in each case, outstanding as of the close of business on the immediately preceding December 31 and (ii) the number of shares of Stock determined by the Board on or prior to such date for such year (the Initial Share Pool as it may be so increased, the “Share Pool”). Up to 55,913,738[ ]1 shares of Stock from the Share Pool may be delivered in satisfaction of ISOs, but nothing in this Section 4.1 will be construed as requiring that any, or any fixed number of, ISOs is awarded under the Plan. For purposes of this Section 4.1, shares of Stock will not be treated as delivered under the Plan, and will not reduce the Share Pool, unless and until they are actually delivered to a Participant. Without limiting the generality of the foregoing, the number of shares of Stock delivered in satisfaction of Awards will be determined (i) by excluding shares of Stock withheld by the Company in payment of the exercise price or purchase price of any Award or in satisfaction of tax withholding requirements with respect to any Award; (ii) by including only the number of shares of Stock delivered in settlement of a SAR any portion of which is settled in Stock; and (iii) by excluding any shares of Stock underlying Awards settled in cash or that expire, become unexercisable, terminate or are forfeited to or repurchased by the Company without the delivery (or retention, in the case of Restricted Stock or Unrestricted Stock) of Stock. For the avoidance of doubt, the Share Pool will not be increased by any shares of Stock delivered under the Plan that are subsequently repurchased using proceeds directly attributable to Stock Option exercises. The limits set forth in this Section 4.1 will be construed to comply with Section 422. 4.2 Substitute Awards. The Administrator may grant Substitute Awards under the Plan. To the extent consistent with the requirements of Section 422 and the regulations thereunder and other applicable legal requirements (including applicable stock exchange requirements), shares of Stock delivered in respect of Substitute Awards will be in addition to and will not reduce the Share Pool. Notwithstanding the foregoing or anything in Section 4.1 to the contrary, if any Substitute Award is settled in cash or expires, becomes unexercisable, terminates or is forfeited to or repurchased by the Company without the delivery (or retention, in the case of Restricted Stock or Unrestricted Stock) of Stock, the shares of Stock previously subject to such Award will not increase the Share Pool or otherwise be available for future grant under the Plan. The Administrator will determine the extent to which the terms and conditions of the Plan apply to Substitute Awards, if at all. TABLE OF CONTENTS 4.3 Type of Shares. Stock delivered by the Company under the Plan may be authorized but unissued Stock, treasury Stock or previously issued Stock acquired by the Company. No fractional shares of Stock will be delivered under the Plan. TABLE OF CONTENTS
4.4 Director Limits. Notwithstanding anything to the contrary in the Plan or any other plan or policy of the Company, the aggregate value of all compensation granted or paid to any Director with respect to any calendar year, including Awards granted under the Plan and cash fees or other compensation paid by the Company to such Director outside of the Plan for his or her services as a Director during such calendar year, may not exceed $750,000 in the aggregate ($1,000,000 in the aggregate with respect to a Director’s first year of service on the Board), calculating the value of any Awards based on the grant date fair value in accordance with the Accounting Rules, assuming a maximum payout. For the avoidance of doubt, the limitation in this Section 4.4 will not apply to any compensation granted or paid to a Director for his or her services to the Company or a subsidiary other than as a Director. 5. ELIGIBILITY AND PARTICIPATION
5.
| ELIGIBILITY AND PARTICIPATION |
The Administrator will select Participants from among Employees and Directors of, and consultants and advisors to, the Company and its subsidiaries. Eligibility for ISOs is limited to individuals described in the first sentence of this Section 5 who are employees of the Company or of a “parent corporation” or “subsidiary corporation” of the Company as those terms are defined in Section 424 of the Code. Eligibility for Stock Options, other than ISOs, and SARs is limited to individuals described in the first sentence of this Section 5 who are providing direct services on the date of grant of the Award to the Company or to a subsidiary of the Company that would be described in the first sentence of Treasury Regulation § 1.409A-1(b)(5)(iii)(E). 6. RULES APPLICABLE TO ALL AWARDS
6.
| RULES APPLICABLE TO ALL AWARDS |
6.1 Award Provisions. The Administrator will determine the terms and conditions of all Awards, subject to the limitations provided herein. Each Award granted under the Plan will be evidenced by an Award agreement in such form as the Administrator determines (any such agreement, an “Award Agreement”). No term of an Award will provide for automatic “reload” grants of additional Awards upon the exercise of a Stock Option or SAR. By accepting (or, under such rules as the Administrator may prescribe, being deemed to have accepted) an Award, the Participant will be deemed to have agreed to the terms and conditions of the Award and the Plan. Notwithstanding any provision of the Plan to the contrary, Substitute Awards may contain terms and conditions that are inconsistent with the terms and conditions specified herein, as determined by the Administrator. 6.2 Term of Plan. No Awards may be made after ten (10) years from the Date of Adoption, but previously granted Awards may continue beyond that date in accordance with their terms. 6.3 Transferability. Neither ISOs nor, except as the Administrator otherwise expressly provides in accordance with the third sentence of this Section 6.3, other Awards may be transferred other than by will or by the laws of descent and distribution. During a Participant’s lifetime, ISOs and, except as the Administrator otherwise expressly provides in accordance with the third sentence of this Section 6.3, SARs and NSOs may be exercised only by the Participant or the Participant’s legal representative. The Administrator may permit the gratuitous transfer (i.e., transfer not for value) of Awards other than ISOs, subject to applicable securities and other laws and such terms and conditions as the Administrator may determine. 6.4 Vesting; Exercisability. The Administrator will determine the time or times at which an Award vests or becomes exercisable and the terms and conditions on which a Stock Option or SAR remains exercisable. Without limiting the foregoing, the Administrator may at any time accelerate the vesting and/or exercisability of an Award (or any portion thereof), regardless of any adverse or potentially adverse tax or other consequences resulting from such acceleration. Unless the Administrator expressly provides otherwise, however, the following rules will apply if a Participant’s Employment ceases: (a) Except as provided in (b) and (c) below, immediately upon the cessation of the Participant’s Employment each Stock Option and SAR (or portion thereof) that is then held by the Participant or by the Participant’s permitted transferees, if any, will cease to be exercisable and will terminate and each other Award that is then held by the Participant or by the Participant’s permitted transferees, if any, to the extent not then vested will be forfeited. (b) Subject to (c) and (d) below, each Stock Option and SAR (or portion thereof) held by the Participant or the Participant’s permitted transferees, if any, immediately prior to the cessation of the Participant’s Employment, to the extent then vested and exercisable, will remain exercisable for the lesser of (i) a period of three (3) months following TABLE OF CONTENTS such cessation of Employment or (ii) the period ending on the latest date on which such Stock Option or SAR could have been exercised without regard to this Section 6.4, and will thereupon immediately terminate. TABLE OF CONTENTS
(c) Subject to (d) below, each Stock Option and SAR (or portion thereof) held by a Participant or the Participant’s permitted transferees, if any, immediately prior to the cessation of the Participant’s Employment due to his or her death or by the Company due to his or her Disability, to the extent then vested and exercisable, will remain exercisable for the lesser of (i) the one- (1) year period ending on the first anniversary of such cessation of Employment or (ii) the period ending on the latest date on which such Stock Option or SAR could have been exercised without regard to this Section 6.4, and will thereupon immediately terminate. (d) All Awards (whether or not vested or exercisable) held by a Participant or the Participant’s permitted transferees, if any, immediately prior to the cessation of the Participant’s Employment will immediately terminate upon such cessation of Employment if the termination is for Cause or occurs in circumstances that in the determination of the Administrator would have constituted grounds for the Participant’s Employment to be terminated for Cause (in each case, without regard to the lapsing of any required notice or cure periods in connection therewith). 6.5 Additional Restrictions. The Administrator may cancel, rescind, withhold or otherwise limit or restrict any Award at any time if the Participant is not in compliance with all applicable provisions of the Award Agreement and the Plan, or if the Participant breaches any non-competition, non-solicitation, non-disparagement, confidentiality or other restrictive covenant by which he or she is bound. 6.6 Recovery of Compensation. The Administrator may provide in any case that any outstanding Award (whether or not vested or exercisable), the proceeds from the exercise or disposition of any Award or Stock acquired under any Award, and any other amounts received in respect of any Award or Stock acquired under any Award will be subject to forfeiture and disgorgement to the Company, with interest and other related earnings, if the Participant to whom the Award was granted (or such Participant’s permitted transferee) is not in compliance with any provision of the Plan or any applicable Award, or any non-competition, non-solicitation, no-hire, non-disparagement, confidentiality, invention assignment, or other restrictive covenant by which he or she is bound. Each Award will be subject to any policy of the Company or any of its subsidiaries that relates to trading on non-public information and permitted transactions with respect to shares of Stock, including limitations on hedging and pledging. In addition, each Award will be subject to any policy of the Company or any of its affiliates that provides for forfeiture, disgorgement, or clawback with respect to incentive compensation that includes Awards under the Plan and will be further subject to forfeiture and disgorgement to the extent required by law or applicable stock exchange listing standards, including, without limitation, Section 10D of the Exchange Act. Each Participant, by accepting or being deemed to have accepted an Award under the Plan, agrees (or will be deemed to have agreed) to the terms of this Section 6.6 and any clawback, recoupment or similar policy of the Company or any of its subsidiaries and further agrees (or will be deemed to have further agreed) to cooperate fully with the Administrator, and to cause any and all permitted transferees of the Participant to cooperate fully with the Administrator, to effectuate any forfeiture or disgorgement described in this Section 6.6. Neither the Administrator nor the Company nor any other person, other than the Participant and his or her permitted transferees, if any, will be responsible for any adverse tax or other consequences to a Participant or his or her permitted transferees, if any, that may arise in connection with this Section 6.6. 6.7 Taxes. The grant of an Award and the issuance, delivery, vesting and retention of Stock, cash or other property under an Award are conditioned upon the full satisfaction by the Participant of all tax and other withholding requirements with respect to the Award. The Administrator will prescribe such rules for the withholding of taxes and other amounts with respect to any Award as it deems necessary. Without limitation to the foregoing, the Company or any parent or subsidiary of the Company will have the authority and the right to deduct or withhold (by any means set forth herein or in an Award Agreement), or require a Participant to remit to the Company or a parent or subsidiary of the Company, an amount sufficient to satisfy all U.S. and non-U.S. federal, state and local income tax, social insurance, payroll tax, fringe benefits tax, payment on account or other tax-related items related to participation in the Plan and any Award hereunder and legally applicable to the Participant and required by law to be withheld (including, any amount deemed by the Company, in its discretion, to be an appropriate charge to the Participant even if legally applicable to the Company or any parent or subsidiary of the Company). The Administrator, in its sole discretion, may hold back shares of Stock from an Award or permit a Participant to tender previously-owned shares of Stock in satisfaction of tax or other withholding requirements (but not in excess of the maximum withholding amount consistent with the Award being subject to equity accounting treatment under the Accounting Rules). Any TABLE OF CONTENTS amounts withheld pursuant to this Section 6.7 will be treated as though such payment had been made directly to the Participant. In addition, the Company may, to the extent permitted by law, deduct any such tax and other withholding amounts from any payment of any kind otherwise due to a Participant from the Company or any parent or subsidiary of the Company. TABLE OF CONTENTS
6.8 Dividend Equivalents. The Administrator may provide for the payment of amounts (on terms and subject to such restrictions and conditions established by the Administrator) in lieu of cash dividends or other cash distributions with respect to Stock subject to an Award whether or not the holder of such Award is otherwise entitled to share in the actual dividend or distribution in respect of such Award; provided, however, that (i) dividends or dividend equivalents relating to an Award that, at the dividend payment date, remains subject to a risk of forfeiture (whether service-based or performance-based) will be subject to the same risk of forfeiture as applies to the underlying Award, together with such additional limitations or restrictions as the Administrator may impose, and (ii) no dividends or dividend equivalents will be payable with respect to Stock Options or SARs. Any entitlement to dividend equivalents or similar entitlements will be established and administered either consistent with an exemption from, or in compliance with, the applicable requirements of Section 409A. 6.9 Rights Limited. Nothing in the Plan or any Award will be construed as giving any person the right to be granted an Award or to continued employment or service with the Company or any of its subsidiaries, or any rights as a stockholder except as to shares of Stock actually delivered under the Plan. The loss of existing or potential profit in any Award will not constitute an element of damages in the event of a termination of a Participant’s Employment for any reason, even if the termination is in violation of an obligation of the Company or any of its subsidiaries to the Participant. 6.10 Coordination with Other Plans. Shares of Stock and/or Awards under the Plan may be granted in tandem with, or in satisfaction of or substitution for, other Awards under the Plan or awards made under other compensatory plans or programs of the Company or any of its subsidiaries. For example, but without limiting the generality of the foregoing, awards under other compensatory plans or programs of the Company or any of its subsidiaries may be settled in Stock (including, without limitation, Unrestricted Stock) under the Plan if the Administrator so determines, in which case the shares delivered will be treated as awarded under the Plan (and will reduce the number of shares thereafter available for delivery under the Plan in accordance with the rules set forth in Section 4). 6.11 Section 409A (a) Without limiting the generality of Section 12.2 hereof, each Award will contain such terms as the Administrator determines and will be construed and administered such that the Award either qualifies for an exemption from the requirements of Section 409A or satisfies such requirements. (b) Notwithstanding anything to the contrary in the Plan or any Award Agreement, the Administrator may unilaterally amend, modify or terminate the Plan or any outstanding Award, including, without limitation, changing the form of the Award, if the Administrator determines that such amendment, modification or termination is necessary or desirable to avoid the imposition of an additional tax, interest or penalty under Section 409A. If any provision of the Plan would otherwise frustrate or conflict with this intent, such provision will be interpreted and deemed amended so as to avoid such conflict. If an operational failure occurs with respect to the requirements of Section 409A, any affected Participant, by accepting an Award under the Plan, agrees to cooperate fully with the Company to correct such failure, to the extent possible, in accordance with any correction procedure established by the Internal Revenue Service. No provision of the Plan will be interpreted to transfer any liability for a failure to comply with Section 409A from a Participant or any other person or entity to the Company. (c) If a Participant is determined on the date of the Participant’s termination of Employment to be a “specified employee” within the meaning of that term under Section 409A(a)(2)(B) of the Code, then, with regard to any payment that is considered nonqualified deferred compensation under Section 409A, to the extent applicable, payable on account of a “separation from service”, such payment will be made or provided on the date that is the earlier of (i) the first business day following the expiration of the six- (6) month period measured from the date of such “separation from service” and (ii) the date of the Participant’s death (the “Delay Period”). Upon the expiration of the Delay Period, all payments delayed pursuant to this Section 6.11(c) (whether they would have otherwise been payable in a single lump sum or in installments in the absence of such delay) will be paid, without interest, on the first business day following the expiration of the Delay Period in a lump sum and any remaining payments due under the Award will be paid in accordance with the normal payment dates specified for them in the applicable Award Agreement. TABLE OF CONTENTS (d) For purposes of Section 409A, each payment made under the Plan or any Award will be treated as a separate payment. TABLE OF CONTENTS
(e) With regard to any payment considered to be nonqualified deferred compensation under Section 409A, to the extent applicable, that is payable upon a change in control of the Company or other similar event, to the extent required to avoid the imposition of an additional tax, interest or penalty under Section 409A, no amount will be payable unless such change in control constitutes a “change in control event” within the meaning of Treasury Regulation § 1.409A-3(i)(5). 7. ADDITIONAL RULES APPLICABLE TO STOCK OPTIONS AND SARS
7.
| ADDITIONAL RULES APPLICABLE TO STOCK OPTIONS AND SARS |
7.1 Time and Manner of Exercise. Unless the Administrator expressly provides otherwise, no Stock Option or SAR will be deemed to have been exercised until the Administrator receives a notice of exercise in a form acceptable to the Administrator that is signed by the appropriate person and accompanied by any payment required under the Award. The Administrator may limit or restrict the exercisability of any Stock Option or SAR in its discretion, including in connection with any Covered Transaction. Any attempt to exercise a Stock Option or SAR by any person other than the Participant will not be given effect unless the Administrator has received such evidence as it may require that the person exercising the Award has the right to do so. 7.2 Exercise Price. The exercise price (or the base value from which appreciation is to be measured) per share of each Award requiring exercise must be no less than one hundred percent (100%) (in the case of an ISO granted to a ten percent (10%) stockholder within the meaning of Section 422(b)(6) of the Code, one hundred ten percent (110%)) of the Fair Market Value of a share of Stock, determined as of the date of grant of the Award, or such higher amount as the Administrator may determine in connection with the grant. 7.3 Payment of Exercise Price. Where the exercise of an Award (or portion thereof) is to be accompanied by payment, payment of the exercise price must be made by cash or check acceptable to the Administrator or, if so permitted by the Administrator and if legally permissible, (i) through the delivery of previously acquired unrestricted shares of Stock, or the withholding of unrestricted shares of Stock otherwise deliverable upon exercise, in either case that have a Fair Market Value equal to the exercise price; (ii) through a broker-assisted cashless exercise program acceptable to the Administrator; (iii) by other means acceptable to the Administrator; or (iv) by any combination of the foregoing permissible forms of payment. The delivery of previously acquired shares in payment of the exercise price under clause (i) above may be accomplished either by actual delivery or by constructive delivery through attestation of ownership, subject to such rules as the Administrator may prescribe. 7.4 Maximum Term. The maximum term of Stock Options and SARs must not exceed ten (10) years from the date of grant (or five (5) years from the date of grant in the case of an ISO granted to a ten percent (10%) stockholder described in Section 7.2 above). 7.5 No Repricing. Except in connection with a corporate transaction involving the Company (which term includes, without limitation, any stock dividend, stock split, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination or exchange of shares) or as otherwise contemplated by Section 8 below, the Company may not, without obtaining stockholder approval, (i) amend the terms of outstanding Stock Options or SARs to reduce the exercise price or base value of such Stock Options or SARs; (ii) cancel outstanding Stock Options or SARs in exchange for Stock Options or SARs that have an exercise price or base value that is less than the exercise price or base value of the original Stock Options or SARs; or (iii) cancel outstanding Stock Options or SARs that have an exercise price or base value greater than the Fair Market Value of a share of Stock on the date of such cancellation in exchange for cash or other consideration. 8. EFFECT OF CERTAIN TRANSACTIONS
8.
| EFFECT OF CERTAIN TRANSACTIONS |
8.1 Mergers, etc. Except as otherwise expressly provided in an Award Agreement or other agreement or by the Administrator, the following provisions will apply in the event of a Covered Transaction: (a) Assumption or Substitution. If the Covered Transaction is one in which there is an acquiring or surviving entity, the Administrator may provide for (i) the assumption or continuation of some or all outstanding Awards or any portion thereof; or (ii) the grant of new awards in substitution therefor by the acquiror or survivor or an affiliate of the acquiror or survivor. (b)Cash-Out of Awards. Subject to Section 8.1(e) below, the Administrator may provide for payment (a “cash-out”), with respect to some or all Awards or any portion thereof (including only the vested portion thereof, TABLE OF CONTENTS with the unvested portion terminating as provided in Section 8.1(d) below), equal in the case of each applicable Award or portion thereof to the excess, if any, of (i) the Fair Market Value of one (1) share of Stock TABLE OF CONTENTS
multiplied by the number of shares of Stock subject to the Award or such portion, minusminus (ii) the aggregate exercise or purchase price, if any, of such Award or such portion thereof (or, in the case of a SAR, the aggregate base value above which appreciation is measured), in each case, on such payment and other terms and subject to such conditions (which need not be the same as the terms and conditions applicable to holders of Stock generally) as the Administrator determines, including that any amounts paid in respect of such Award in connection with the Covered Transaction be placed in escrow or otherwise made subject to such restrictions as the Administrator deems appropriate. For the avoidance of doubt, if the per-share exercise or purchase price (or base value) of an Award or portion thereof is equal to or greater than the Fair Market Value of one (1) share of Stock, such Award or portion may be cancelled with no payment due hereunder or otherwise in respect thereof. (c) Acceleration of Certain Awards. Subject to Section 8.1(e) below, the Administrator may provide that any Award requiring exercise will become exercisable, in full or in part, and/or that the delivery of any shares of Stock remaining deliverable under any outstanding Award of Stock Units (including Restricted Stock Units and Performance Awards to the extent consisting of Stock Units) will be accelerated, in full or in part, in each case, on a basis that gives the holder of the Award a reasonable opportunity, as determined by the Administrator, following the exercise of the Award or the delivery of the shares, as the case may be, to participate as a stockholder in the Covered Transaction. (d) Termination of Awards upon Consummation of Covered Transaction. Except as the Administrator may otherwise determine, each Award will automatically terminate (and in the case of outstanding shares of Restricted Stock, will automatically be forfeited) immediately upon the consummation of the Covered Transaction, other than (i) any Award that is assumed, continued or substituted for pursuant to Section 8.1(a) above, and (ii) any Award that by its terms, or as a result of action taken by the Administrator, continues following the Covered Transaction. (e) Additional Limitations. Any share of Stock and any cash or other property or other award delivered pursuant to Section 8.1(a), Section 8.1(b) or Section 8.1(c) above with respect to an Award may, in the discretion of the Administrator, contain such restrictions, if any, as the Administrator deems appropriate, including to reflect any performance or other vesting conditions to which the Award was subject and that did not lapse (and were not satisfied) in connection with the Covered Transaction. For purposes of the immediately preceding sentence, a cash-out under Section 8.1(b) above or an acceleration under Section 8.1(c) above will not, in and of itself, be treated as the lapsing (or satisfaction) of a performance or other vesting condition. In the case of Restricted Stock that does not vest and is not forfeited in connection with the Covered Transaction, the Administrator may require that any amounts delivered, exchanged or otherwise paid in respect of such Stock in connection with the Covered Transaction be placed in escrow or otherwise made subject to such restrictions as the Administrator deems appropriate to carry out the intent of the Plan. (f) Uniform Treatment. For the avoidance of doubt, the Administrator need not treat Participants or Awards (or portions thereof) in a uniform manner, and may treat different Participants and/or Awards differently, in connection with a Covered Transaction. 8.2 Changes in and Distributions with Respect to Stock (a) Basic Adjustment Provisions. In the event of a stock dividend, stock split or combination of shares (including a reverse stock split), recapitalization or other change in the Company’s capital structure that constitutes an equity restructuring within the meaning of the Accounting Rules, the Administrator will make appropriate adjustments to the maximum number of shares of Stock specified in Section 4.1 that may be delivered under the Plan, and will make appropriate adjustments to the number and kind of shares of stock or securities underlying Awards then outstanding or subsequently granted, any exercise or purchase prices (or base values) relating to Awards and any other provision of Awards affected by such change. (b) Certain Other Adjustments. The Administrator may also make adjustments of the type described in Section 8.2(a) above to take into account distributions to stockholders other than those provided for in Sections 8.1 and 8.2(a), or any other event, if the Administrator determines that adjustments are appropriate to avoid distortion in the operation of the Plan or any Award. (c) Continuing Application of Plan Terms. References in the Plan to shares of Stock will be construed to include any stock or securities resulting from an adjustment pursuant to this Section 8. TABLE OF CONTENTS 9. LEGAL CONDITIONS ON DELIVERY OF STOCK
9.
| LEGAL CONDITIONS ON DELIVERY OF STOCK |
The Company will not be obligated to deliver any shares of Stock pursuant to the Plan or to remove any restriction from shares of Stock previously delivered under the Plan until: (i) the Company is satisfied that all legal matters in connection with the issuance and delivery of such shares have been addressed and resolved; (ii) if the outstanding Stock is at the time of delivery listed on any stock exchange or national market system, the shares to be delivered have been listed or authorized to be listed on such exchange or system upon official notice of issuance; and (iii) all conditions of the Award have been satisfied or waived. The Company may require, as a condition to the exercise of an Award or the delivery of shares of Stock under an Award, such representations or agreements as counsel for the Company may consider appropriate to avoid violation of U.S. federal securities laws, or any applicable state or non-U.S. securities law. Any Stock delivered to Participants under the Plan will be evidenced in such manner as the Administrator determines appropriate, including book-entry registration or delivery of stock certificates. In the event that the Administrator determines that stock certificates will be issued in connection with Stock issued under the Plan, the Administrator may require that such certificates bear an appropriate legend reflecting any restriction on transfer applicable to such Stock, and the Company may hold the certificates pending the lapse of the applicable restrictions. 10. AMENDMENT AND TERMINATION
10.
| AMENDMENT AND TERMINATION |
The Administrator may at any time or times amend the Plan or any outstanding Award for any purpose which may at the time be permitted by applicable law, and may at any time suspend or terminate the Plan as to any future grants of Awards; provided, however, that except as otherwise expressly provided in the Plan or the applicable Award Agreement, the Administrator may not, without the Participant’s consent, alter the terms of an Award so as to affect materially and adversely the Participant’s rights under the Award, unless the Administrator expressly reserved the right to do so in the applicable Award Agreement. Any amendments to the Plan will be conditioned upon stockholder approval only to the extent, if any, such approval is required by applicable law (including the Code), regulations or stock exchange requirements, as determined by the Administrator. For the avoidance of doubt, without limiting the Administrator’s rights hereunder, no adjustment to any Award pursuant to the terms of Section 8 or Section 13 will be treated as an amendment requiring a Participant’s consent. 11. OTHER COMPENSATION ARRANGEMENTS
11.
| OTHER COMPENSATION ARRANGEMENTS |
The existence of the Plan or the grant of any Award will not affect the right of the Company or any of its subsidiaries to grant any person bonuses or other compensation in addition to Awards under the Plan. The Company, in establishing and maintaining the Plan as a voluntary and unilateral undertaking, expressly disavows the creation of any rights in Participants or others claiming entitlement under the Plan or any obligations on the part of the Company or any of its subsidiaries, or the Administrator, except as expressly provided herein. No Award will be deemed to be salary or compensation for the purpose of computing benefits under any employee benefit, severance, pension or retirement plan of the Company or any of its subsidiaries, unless the Administrator determines otherwise, applicable law provides otherwise or the terms of such plan expressly include such compensation. 12. MISCELLANEOUS
12.1 Waiver of Jury Trial. By accepting or being deemed to have accepted an Award under the Plan, each Participant waives (or will be deemed to have waived), to the maximum extent permitted under applicable law, any right to a trial by jury in any action, proceeding or counterclaim concerning any rights under the Plan or any Award, or under any amendment, waiver, consent, instrument, document or other agreement delivered or which in the future may be delivered in connection therewith, and agrees (or will be deemed to have agreed) that any such action, proceedings or counterclaim will be tried before a court and not before a jury. By accepting or being deemed to have accepted an Award under the Plan, each Participant certifies that no officer, representative, or attorney of the Company has represented, expressly or otherwise, that the Company would not, in the event of any action, proceeding or counterclaim, seek to enforce the foregoing waivers. Notwithstanding anything to the contrary in the Plan, nothing herein is to be construed as limiting the ability of the Company and a Participant to agree to submit any dispute arising under the terms of the Plan or any Award to binding arbitration or as limiting the ability of the Company to require any individual to agree to submit such disputes to binding arbitration as a condition of receiving an Award hereunder. 12.2 Limitation of Liability. Notwithstanding anything to the contrary in the Plan or any Award, neither the Company, nor any of its subsidiaries, nor the Administrator, nor any person acting on behalf of the Company, any TABLE OF CONTENTS of its subsidiaries, or the Administrator, will be liable to any Participant, to any permitted transferee, to the estate or beneficiary of any Participant or any permitted transferee, or to any other person by reason of any acceleration of income, any additional tax, or any penalty, interest or other liability asserted by reason of the failure of an Award to satisfy the requirements of Section 422 or Section 409A or by reason of Section 4999 of the Code, or otherwise asserted with respect to any Award. 12.3 Unfunded Plan. Neither the Plan nor any Award will create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company and a Participant or any other person or entity. The Company’s obligations under the Plan are unfunded, and no Participant will have any right to specific assets of the Company in respect of any Award. Participants will be general unsecured creditors of the Company with respect to any amounts due or payable under the Plan. 12.4 Severability. If any provision of the Plan or any Award or Award Agreement is or becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction or as to any person or Award, or would disqualify the Plan or any Award under any applicable law (as determined by the Administrator), such provision will be construed or deemed amended to conform to such applicable law or laws in the manner that most closely reflects the original intent of the Award or the Plan, or if it cannot be so construed or deemed amended without materially altering such intent (as determined by the Administrator), such provision will be construed or deemed stricken as to such jurisdiction, person or Award and the remainder of the Plan and any such Award will remain in full force and effect. 13. RULES FOR PARTICIPANTS IN CERTAIN JURISDICTIONS
13.
| RULES FOR PARTICIPANTS IN CERTAIN JURISDICTIONS |
The Administrator may at any time and from time to time (including before or after an Award is granted) establish, adopt or revise any rules and regulations as it may deem necessary or advisable for purposes of satisfying applicable blue sky, securities, tax or other laws of various jurisdictions, including by establishing one or more sub-plans, supplements or appendices under the Plan or any Award Agreement setting forth (i) such limitations on the Administrator’s discretion under the Plan and (ii) such additional or different terms and conditions, in each case, as the Administrator deems necessary or advisable. Any such sub-plan, supplement, appendix, rule or regulation will be deemed to be a part of the Plan but will apply only to Participants within the applicable jurisdiction (as determined by the Administrator); provided, however, that no sub-plan, supplement, appendix, rule or regulation established pursuant to this provision will increase the Share Pool. 14. GOVERNING LAW
14.1 Certain Requirements of Corporate Law. Awards and shares of Stock will be granted, issued and administered consistent with the requirements of applicable Delaware law relating to the issuance of stock and the consideration to be received therefor, and with the applicable requirements of the stock exchanges or other trading systems on which the Stock is listed or entered for trading, in each case, as determined by the Administrator. 14.2 Other Matters. Except as otherwise provided by the express terms of an Award Agreement, under a sub-plan described in Section 13 or as provided in Section 14.1 above, the laws of the State of Delaware govern the provisions of the Plan and of Awards under the Plan and all claims or disputes arising out of or based upon the Plan or any Award under the Plan or relating to the subject matter hereof or thereof without giving effect to any choice or conflict of laws provision or rule that would cause the application of the laws of any other jurisdiction. 14.3 Jurisdiction. Subject to Section 12.1 and except as may be expressly set forth in an Award Agreement, by accepting (or being deemed to have accepted) an Award, each Participant agrees or will be deemed to have agreed to (i) submit irrevocably and unconditionally to the jurisdiction of the federal and state courts located within the geographic boundaries of the United States District Court for the District of Delaware for the purpose of any suit, action or other proceeding arising out of or based upon the Plan or any Award; (ii) not commence any suit, action or other proceeding arising out of or based upon the Plan or any Award, except in the federal and state courts located within the geographic boundaries of the United States District Court for the District of Delaware; and (iii) waive, and not assert, by way of motion as a defense or otherwise, in any such suit, action or proceeding, any claim that he or she is not subject personally to the jurisdiction of the above-named courts that his or her property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper or that the Plan or any Award or the subject matter thereof may not be enforced in or by such court. * * * * TABLE OF CONTENTS Exhibit A
DEFINED TERMS The following terms, when used in the Plan, have the meanings and are subject to the provisions set forth below: “Accounting Rules”: Financial Accounting Standards Board Accounting Standards Codification Topic 718, or any successor provision. “Administrator”: The Compensation Committee, except with respect to such matters that are not delegated to the Compensation Committee by the Board (whether pursuant to committee charter or otherwise). The Compensation Committee (or the Board, with respect to such matters over which it retains authority under the Plan or otherwise) may delegate (i) to one or more of its members (or one or more other members of the Board) such of its duties, powers and responsibilities as it may determine; (ii) to one or more officers of the Company the power to grant Awards to the extent permitted by Section 152 or 157(c) of the Delaware General Corporation Law; and (iii) to such Employees or other persons as it determines such ministerial tasks as it deems appropriate. For purposes of the Plan, the term “Administrator” will include the Board, the Compensation Committee, and the person or persons delegated authority under the Plan to the extent of such delegation, as applicable. “Award”: Any or a combination of the following: (i) Stock Options. (ii) SARs. (iii) Restricted Stock. (iv) Unrestricted Stock. (v) Stock Units, including Restricted Stock Units. (vi) Performance Awards. (vii) Awards (other than Awards described in (i) through (vii) above) that are convertible into or otherwise based on Stock. “Board”: The board of directors of the Company. “Cause”: In the case of a Participant who is party to a currently effective employment, consulting, advisory, separation, severance or other agreement with the Company or any of its subsidiaries in which “cause” (or a similar term) is defined, “Cause” means the occurrence of any circumstance constituting “cause” (or such similar term) pursuant to the terms of such agreement. In every other case, “Cause” means the occurrence of any of the following, as determined by the Administrator in its sole discretion: (i) the Participant’s material failure to perform (other than by reason of disability), or substantial negligence or misconduct in the performance of, the Participant’s duties and responsibilities for the Company or any of its subsidiaries; (ii) the Participant’s breach of any confidentiality, invention assignment, non-competition, non-solicitation, no-hire, non-disparagement or other restrictive covenant obligation set forth in any written agreement by and between the Participant and the Company or any of its subsidiaries; (iii) the Participant’s material breach of any other provision of any written agreement by and between the Participant and the Company or any of its subsidiaries; (iv) the Participant’s material violation of any applicable policy or code of conduct of the Company or any of its subsidiaries; (v) the Participant’s indictment for or commission of, or plea of nolo contendere to, any felony or any crime involving moral turpitude; or (vi) other conduct by the Participant that is or reasonably could be expected to be harmful to the business interests or reputation of the Company or any of its subsidiaries; provided, that if the Administrator determines, following termination of the Participant’s employment or other service for any reason other than Cause, that such termination could have been for Cause, then the Participant’s employment will be deemed to have been terminated for Cause for all purposes hereunder, retroactive to the date of such Participant’s termination of employment or other service. “Change of Control”: 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 under the Exchange Act), directly or indirectly, of securities of the Company representing more than fifty percent (50%) of the total voting power of the Company’s then outstanding voting securities; TABLE OF CONTENTS (ii) the consummation by the Company of a merger or consolidation of the Company with any other corporation, other than a merger or consolidation that 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) more than fifty percent (50%) of the total voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation (in substantially the same proportions relative to each other as immediately prior to the transaction); or (iii) the consummation of a sale or disposition by the Company of all or substantially all of the Company’s assets (it being understood that the sale or spinoff of one or more divisions of the Company will not necessarily constitute the sale or disposition of all or substantially all of the Company’s assets). Further, for the avoidance of doubt, a transaction will not constitute a Change of Control if: (y) its sole purpose is to change the state of the Company’s incorporation; or (z) its sole purpose is to create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately before such transaction. “Code”: The U.S. Internal Revenue Code of 1986, as from time to time amended and in effect, or any successor statute as from time to time in effect, including any applicable regulations and guidance thereunder. “Company”: Astra Space, Inc. “Compensation Committee”: The compensation committee of the Board. “Covered Transaction”: Any of (i) a consolidation, merger or similar transaction or series of related transactions, including a sale or other disposition of stock, in which the Company is not the surviving corporation or which results in the acquisition of all or substantially all of the Company’s then outstanding common stock by a single person or entity or by a group of persons and/or entities acting in concert; (ii) a sale or transfer of all or substantially all the Company’s assets; (iii) a Change of Control; or (iv) a dissolution or liquidation of the Company. Where a Covered Transaction involves a tender offer that is reasonably expected to be followed by a merger described in clause (i) (as determined by the Administrator), the Covered Transaction will be deemed to have occurred upon consummation of the tender offer. “Date of Adoption”: The earlier of the date the Plan was approved by the Company’s stockholders or adopted by the Board, as determined by the Compensation Committee. “Director”: A member of the Board who is not an Employee. “Disability”: In the case of any Participant who is party to a currently effective employment, consulting, advisory, separation, severance or other agreement with the Company or any of its subsidiaries in which “disability” (or a similar term) is defined, “Disability” means the occurrence of a “disability” (or such similar term) pursuant to the terms of such agreement. In every other case, “Disability” means, as determined by the Administrator, the Participant’s absence from work for a period in excess of ninety (90) days in any twelve- (12) month period due to a disability that would entitle the Participant to receive benefits under the Company’s long-term disability program as in effect from time to time (if the Participant were a participant in such program). “Employee”: Any person who is employed by the Company or any of its subsidiaries. “Employment”: A Participant’s employment or other service relationship with the Company or any of its subsidiaries. Employment will be deemed to continue, unless the Administrator otherwise determines, so long as the Participant is employed by, or otherwise is providing services in a capacity described in Section 5 to, the Company or any of its subsidiaries; provided, that Employment, with respect to a Participant who receives an Award as an Employee, refers only to such Participant’s service as an Employee, except as the Administrator otherwise determines. If a Participant’s employment or other service relationship is with any subsidiary of the Company and that entity ceases to be a subsidiary of the Company, the Participant’s Employment will be deemed to have terminated when the entity ceases to be a subsidiary of the Company unless the Participant transfers Employment to the Company or one of its remaining subsidiaries. Notwithstanding the foregoing, in construing the provisions of any Award relating to the payment of “nonqualified deferred compensation” (subject to Section 409A) upon a termination or cessation of Employment, references to termination or cessation of employment, separation from TABLE OF CONTENTS
service, retirement or similar or correlative terms will be construed to require a “separation from service” (as that term is defined in Treasury TABLE OF CONTENTS Regulation § Section 1.409A-1(h), after giving effect to the presumptions contained therein) from the Company and from all other corporations and trades or businesses, if any, that would be treated as a single “service recipient” with the Company under Treasury Regulation § 1.409A-1(h)(3). The Company may, but need not, elect in writing, subject to the applicable limitations under Section 409A, any of the special elective rules prescribed in Treasury Regulation § 1.409A-1(h) for purposes of determining whether a “separation from service” has occurred. Any such written election will be deemed a part of the Plan. “Exchange Act”: The Securities Exchange Act of 1934, as amended. “Fair Market Value”: As of a particular date, (i) the closing price for a share of Stock reported on the Nasdaq Stock Market (or any other national securities exchange on which the Stock is then listed) for that date or, if no closing price is reported for that date, the closing price on the immediately preceding date on which a closing price was reported; or (ii) in the event that the Stock is not traded on a national securities exchange, the fair market value of a share of Stock determined by the Administrator consistent with the rules of Section 422 and Section 409A to the extent applicable. “ISO”: A Stock Option intended to be an “incentive stock option” within the meaning of Section 422. Each Stock Option granted pursuant to the Plan will be treated as providing by its terms that it is to be an NSO unless, as of the date of grant, it is expressly designated as an ISO in the applicable Award Agreement. “NSO”: A Stock Option that is not intended to be an “incentive stock option” within the meaning of Section 422. “Participant”: A person who is granted an Award under the Plan. “Performance Award”: An Award subject to performance vesting conditions, which may include Performance Criteria. “Performance Criteria”: Specified criteria, other than the mere continuation of Employment or the mere passage of time, the satisfaction of which is a condition for the grant, exercisability, vesting or full enjoyment of an Award. A Performance Criterion and any targets with respect thereto need not be based upon an increase, a positive or improved result or avoidance of loss and may be applied to a Participant individually, or to a business unit or division of the Company or to the Company as a whole. A Performance Criterion may also be based on individual performance and/or subjective performance criteria. The Administrator may provide that one or more of the Performance Criteria applicable to an Award will be adjusted in a manner to reflect events (for example, but without limitation, acquisitions or dispositions) occurring during the performance period that affect the applicable Performance Criterion or Criteria. “Plan”: The Astra Space, Inc. 2021 Omnibus Incentive Plan, as from time to time amended and in effect. “Restricted Stock”: Stock subject to restrictions requiring that it be forfeited, redelivered or offered for sale to the Company if specified performance or other vesting conditions are not satisfied. “Restricted Stock Unit”: A Stock Unit that is, or as to which the delivery of Stock or of cash in lieu of Stock is, subject to the satisfaction of specified performance or other vesting conditions. “SAR”: A right entitling the holder upon exercise to receive an amount (payable in cash or in shares of Stock of equivalent value) equal to the excess of the Fair Market Value of the shares of Stock subject to the right over the base value from which appreciation under the SAR is to be measured. “Section 409A”: Section 409A of the Code and the regulations thereunder. “Section 422”: Section 422 of the Code and the regulations thereunder. “Stock”: Class A common stock of the Company, par value $0.0001 per share. “Stock Option”: An option entitling the holder to acquire shares of Stock upon payment of the exercise price. “Stock Unit”: An unfunded and unsecured promise, denominated in shares of Stock, to deliver Stock or cash measured by the value of Stock in the future. “Substitute Awards”: Awards granted under the Plan in substitution for one or more equity awards of an acquired company that are converted, replaced or adjusted in connection with the acquisition. “Unrestricted Stock”: Stock not subject to any restrictions under the terms of the Award. | | |
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