| · | An annual cash retainer of $65,000; |
| · | An annual restricted stock unit grant valued at $100,000 that cliff vests on the day prior to the Company’s next Annual Stockholder Meeting following the grant date; |
| · | $12,000 for service on the Audit Committee; |
| · | $40,000 for serving as Chairman of the Board of Directors; |
| · | $15,000 for serving as Chairperson of the Audit Committee; |
| · | $10,000 for serving as Chairperson of the Nominating and Corporate Governance Committee; and |
| · | $10,000 for serving as Chairperson of the Human Resources Committee. |
$30,000 for serving as Lead Independent Director; $20,000 for serving as Chairperson of the Audit Committee; $10,000 for serving as Chairperson of the Nominating and Governance Committee; and $20,000 for serving as Chairperson of the Human Resources Committee. Director Stock Ownership Guidelines We believe that the financial interests of our directors should be aligned with those of our stockholders. On June 3, 2010 our Nominating and Corporate Governance Committee adopted stock ownership guidelines for all non-employee directors. The stock ownership guideline for non-employee directors is equal to twothree times the director’s annual cash retainer for board service. This amount was increased from two to three times in 2019 to more closely align the financial interests of our directors with those of our stockholders. Stock that counts towards satisfaction of our stock ownership guidelines includes shares owned outright by the non-employee director or his or her immediate family members residing in the same household or in trust and restricted stock units, whether or not vested. The value of shares owned outright is calculated as Exponent’s prior 365-day average closing common stock price. The value of restricted stock units is the grant date fair value. The calculation is done at the beginning of each year. Non-employee directors are required to achieve their stock ownership guideline within five years of the date the guidelines were adopted or the start of their service, whichever is later. If a person’s stock ownership guideline increases, that person has a five-year period to achieve the new guideline. Until the guideline is achieved, the person is required to retain at least 50% of net shares delivered through our Restricted Stock Unit Program or the exercise of stock options. Net shares refer to those that remain after shares are sold or netted to pay the exercise price of stock options and withholding taxes. As of March 30, 2016,April 7, 2021, all non-employee directors met the stock ownership guidelines or are expected to meet the applicable ownership guidelines within the specified time period. DIRECTOR COMPENSATION IN FISCAL 2015 2020 The following table sets forth information regarding outside director compensation during fiscal 2015:2020: Name | | Fees Earned or Paid in Cash ($) | | | Stock Awards (1)(2)($) | | | Total ($) | | | Fees Earned or Paid in Cash ($) | | | Stock Awards (1)(2)($) | | | Total ($) | | George H. Brown | | | | 7,250 | | | | 62,500 | | | | 69,750 | | | | | | | | | | | | | | | | | | | | | | Michael R. Gaulke | | | 102,917 | | | | 100,000 | | | | 202,917 | | | Paul R. Johnston, Ph.D. | | | | 125,000 | | | | 125,000 | | | | 250,000 | | | | | | | | | | | | | | | | Carol Lindstrom | | | | 97,000 | | | | 125,000 | | | | 222,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | Karen A. Richardson | | | 74,917 | | | | 100,000 | | | | 174,917 | | | | 107,000 | | | | 125,000 | | | | 232,000 | | | | | | | | | | | | | | | | Stephen C. Riggins | | | 88,875 | | | | 100,000 | | | | 188,875 | | | | | | | | | | | | | | | | | | | | | | | | | | | | John B. Shoven, Ph.D. | | | 84,917 | | | | 100,000 | | | | 184,917 | | | | 117,000 | | | | 125,000 | | | | 242,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | Debra L. Zumwalt | | | 79,917 | | | | 100,000 | | | | 179,917 | | | | 107,000 | | | | 125,000 | | | | 232,000 | |
(1) | (1) | The amounts shown in this column represent the value of unvested restricted stock unit awards granted during fiscal 20152020 in accordance with ASCAccounting Standards Codification (“ASC”) 718. However, pursuantAll equity-based awards have dividend equivalent rights (“DER”), which entitle the holder of the award to SEC rules, these valuesthe same dividend value per share as holders of common stock. DER are not reduced by an estimate forsubject to the probability of forfeiture.same vesting and other terms and conditions as the corresponding stock award. DER are accumulated and paid when the underlying stock awards vest and are forfeited if the underlying stock awards are forfeited. See the notes to our consolidated financial statements in our Annual Report on Form 10-K for the year ended January 1, 20162021 regarding assumptions underlying the valuation of equity awards. |
(2) | (2) | Each of our current outside directors wasPaul R. Johnston, Ph.D., Carol Lindstrom, Karen A. Richardson, John B. Shoven, Ph.D., and Debra L. Zumwalt were granted 2,3541,675 restricted stock units during 2015on May 28, 2020 with a grant date fair value of $100,000.$125,000. In connection with his appointment as a director on October 27, 2020, George H. Brown was granted 727 restricted stock units |
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| with a grant date fair value of $62,500. The following directorunvested restricted stock unit awards were outstanding as of January 1, 2016:2021: Mr. Gaulke - 2,354,Brown – 727 Dr. Johnston – 29,651, Ms. Lindstrom – 1,675, Ms. Richardson – 2,354, Mr. Riggins - 2,354,1,675, Dr. Shoven - 2,354– 1,675 and Ms. Zumwalt – 2,354. |
1,675. Dr. Johnston’s unvested restricted stock unit awards include 27,976 awards that were granted when he was an employee.
REPORT OF THE AUDIT COMMITTEECOMMITTEE OF THE BOARD OF DIRECTORS The following Report of the Audit Committee of the Board of Directors does not constitute soliciting material and should not be considered filed or incorporated by reference into any other Company filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent the Company specifically incorporates this Report by reference therein. The Audit Committee of the Board of Directors is responsible for general oversight of the Company’s financial accounting and reporting process. The Committee’s primary responsibilities fall into three broad categories: first, the Audit Committee is charged with monitoring the preparation of quarterly and annual financial reports by the Company’s management, including discussions with management and the Company’s independent registered public accounting firm about quarterly and annual financial statements and key accounting and reporting matters; | · | first, the Committee is charged with monitoring the preparation of quarterly and annual financial reports by the Company’s management, including discussions with management and the Company’s independent auditor about quarterly and annual financial statements and key accounting and reporting matters; |
second, the Audit Committee is responsible for matters concerning the relationship between the Company and its independent registered public accounting firm, including their appointment or removal; approving the scope of their audit services and related fees, as well as any other services being provided to the Company; and overseeing the independence of the Company’s registered public accounting firm; and | · | second, the Committee is responsible for matters concerning the relationship between the Company and its independent auditor, including their appointment or removal; approving the scope of their audit services and related fees, as well as any other services being provided to the Company; and overseeing the independence of the Company’s auditor; and |
third, the Audit Committee in consultation with management and the independent registered public accounting firm considers the integrity of the Company’s financial reporting processes and control regarding finance and accounting. | · | third, the Committee in consultation with management and the independent auditor considers the integrity of the Company’s financial reporting processes and controls regarding finance and accounting. |
The Audit Committee’s responsibilities are presented in detail in the complete charter of the Committee, which is available on the Company’s website at: http:https://www.exponent.com/investors/corporate-governance/. The charter reflects standards set forth in the applicable SEC regulations and the NASDAQNasdaq Global Select Market rules. Audit Committee members are independent as defined by these regulations and rules. The Board of Directors has determined that Mr. Riggins is anBrown, Ms. Richardson and Dr. Shoven are “audit committee financial expert”experts” as such term is defined by these rules and regulations. The Audit Committee has implemented procedures to ensure that during the course of each fiscal year it devotes the attention it considers necessary or appropriate to each of the matters assigned to it under the Committee’s charter. In overseeing the preparation of the Company’s consolidated financial statements, the Audit Committee met with both management and the Company’s independent auditorregistered public accounting firm to review and discuss all quarterly and annual financial statements prior to their issuance and to discuss significant accounting issues. Management advised the Audit Committee that all financial statements were prepared in accordance with accounting principles generally accepted in the United States, and the Audit Committee discussed the statements with both management and the independent auditor.registered public accounting firm. The Audit Committee discussed with KPMG LLP the matters required to be discussed pursuant to applicable auditing standards adopted by the Public Company Accounting Oversight Board together with the guidelines established by the SEC and the Sarbanes-Oxley Act, including, among other items, matters related to the conduct of the audit of the consolidated financial statements by the independent registered public accounting firm and its audit of the effectiveness of internal control over financial reporting pursuant to Section 404. The Audit Committee has received from KPMG LLP the written disclosures and the lettercommunications required by the applicable requirements of the Public Company Accounting Oversight Board regarding KPMG’s communications with the Audit Committee concerning independence. We haveThe Audit Committee has discussed with KPMG matters relating to its independence, including a review of both audit and non-audit services, and considered the compatibility of non-audit services with KPMG’s independence. 16
On the basis of these reviews and discussions, the Audit Committee recommended to the Board of Directors that the Board approve the inclusion of the Company’s audited financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended January 1, 2016,2021, for filing with the SEC. | Members of the Audit Committee | | | | Stephen C. Riggins, Chairperson | | Karen A. Richardson, Chairperson | George H. Brown Carol Lindstrom | John B. Shoven, Ph.D. | | Debra L. Zumwalt |
RELATIONSHIP WITH INDEPENDENT AUDITOR REGISTERED PUBLIC ACCOUNTING FIRM KPMG LLP has been the independent auditorregistered public accounting firm that audits the financial statements of the Company since 1987. In accordance with standing policy, KPMG LLP periodically changes the personnel who work on the audit. In addition to performing the audit of the Company’s consolidated financial statements, and effectiveness of internal control over financial reporting, KPMG LLP provided various other services during fiscal 2015.2020. The aggregate fees incurred during fiscal 20152020 and fiscal 20142019 for each of the following categories of services are set forth below: | | Fiscal 2015 Fees | | | Fiscal 2014 Fees | | | Fiscal 2020 Fees | | | Fiscal 2019 Fees | | Audit Fees | | $ | 706,000 | | | $ | 611,000 | | | $ | 827,400 | | | $ | 821,000 | | Audit-Related Fees | | | - | | | | - | | | | — | | | | — | | Tax Fees | | | 111,000 | | | | 141,000 | | | | 144,344 | | | | 168,615 | | All Other Fees | | | - | | | | - | | | | — | | | | — | | Total Fees | | $ | 817,000 | | | $ | 752,000 | | | $ | 971,744 | | | $ | 989,615 | |
Audit Fees. Consists of fees incurred for professional services rendered for the audit of the Company’s consolidated financial statements and effectiveness of internal control over financial reporting, and review of the interim consolidated financial statements included in quarterly reports. This includes fees for review of the tax provision and fees for accounting consultations on matters reflected in the financial statements. Audit fees also include audit or other attest services required by statute or regulation (foreign or domestic) such as comfort letters, consents and reviews of SEC filings, statutory audits in non-U.S. locations and reports on issuers’ internal controls required under the Sarbanes-Oxley Act.filings. Audit-Related Fees. Consists of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of the Company’s consolidated financial statements and are not reported under “Audit Fees.” No audit related fees were incurred during fiscal years 2020 or 2019.
Tax Fees. Consists of fees billed or expected to be billed for professional services for tax compliance, tax advice and tax planning. These services include assistance regarding federal, state and international tax compliance, tax audit defense, customs and duties, mergers and acquisitions, and international tax planning.compliance.
All Other Fees.No other fees were incurred during fiscal years 20152020 or 2014. 2019. Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditor Registered Public Accounting Firm The Audit Committee’s policy is to pre-approve all audit and permissible non-audit services provided by the independent auditor.registered public accounting firm. These services may include audit services, audit-related services, tax services and other services. Pre-approval is generally provided for up to one year and any pre-approval is detailed as to the particular service or category of services and is generally subject to a specific budget. The independent auditorregistered public accounting firm and management are required to periodically report to the Audit Committee regarding the extent of services provided by the independent auditorregistered public accounting firm in accordance with this pre-approval, and the fees for the services performed to date. The Audit Committee may also pre-approve particular services on a case-by-case basis. During fiscal year 2020, 100% of audit and permissible non-audit services of the independent registered public accounting firm were pre-approved by the Audit Committee in accordance with this policy. 18
PROPOSAL NO. 2 RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITOR REGISTERED PUBLIC ACCOUNTING FIRM The Audit Committee of the Board of Directors has appointed KPMG LLP, an independent registered public accounting firm, to audit the financial statements of the Company for the year ending December 30, 2016.31, 2021. KPMG LLP has audited the Company’s financial statements since 1987. A representative of KPMG LLP is expected to be present at the Annual Meeting, will have the opportunity to make a statement if he or she so desires, and is expected to be available to respond to appropriate questions. Required Vote The ratification of the appointment of KPMG LLP will require the affirmative vote of a majority of shares of our common stock present in person or represented by proxy at the Annual Meeting and entitled to vote on the proposal. In the event that the stockholders do not approve the selection of KPMG LLP, the Audit Committee of the Board of Directors will reconsider the appointment of the independent auditor. registered public accounting firm. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE RATIFICATION OF THE APPOINTMENT OF KPMG LLP AS THE COMPANY’S INDEPENDENT AUDITORREGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL 2016.2021. 19 PROPOSAL NO. 3 ADVISORY VOTE ON NAMED EXECUTIVE OFFICER COMPENSATION FOR FISCAL 2015 2020 The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the "Dodd-Frank Act") enables the Company’s stockholders to vote to approve, on an advisory or non-binding basis, the compensation of our named executive officers, as disclosed in this proxy statement in accordance with SEC rules. Although the vote is advisory and is not binding on us or on our Board of Directors, our Human Resources Committee will take into account the outcome of the vote when considering future executive compensation decisions and will evaluate whether any actions are necessary to address stockholder concerns. We believe that our compensation philosophy has allowed us to attract, retain, and motivate qualified executive officers who have contributed to our success. For more information regarding the compensation of our named executive officers and our compensation philosophy, we encourage you to read the section of this proxy entitled “Executive Officer Compensation – Compensation Discussion and Analysis,” the compensation tables and the narrative discussion following the compensation tables for a more detailed discussion of our compensation policies and practices. We are asking for stockholder approval of the compensation of our named executive officers in accordance with SEC rules (including without limitation, Section 14A of the Securities Exchange Act of 1934, as amended). This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the policies and practices described in this proxy statement. In accordance with the recommendation of the Company’s stockholders at the 2011 Annual Meeting of the Company, the Board intends This non-binding advisory vote is currently scheduled to seek thisbe conducted every year. The next advisory vote on annamed executive officer compensation is expected to take place at our 2022 annual basis. meeting of stockholders (the “2022 Annual Meeting”). Required Vote The affirmative vote of a majority of the shares of our common stock present in person or represented by proxy at the Annual Meeting and entitled to vote on the proposal is required for advisory approval of this proposal. The Board of Directors unanimously recommends a vote FOR the approval of the compensation of our named executive officers as disclosed in this proxy statement on an advisory basis pursuant to the compensation disclosure rules of the SEC. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table indicates beneficial ownership of the Company’s common stock as of March 30, 2016.April 7, 2021. It includes stockholders known by the Company to beneficially own more than 5% of the Company’s common stock, the Company’s directors, the executive officers of the Company named in the Summary Compensation Table, and the directors and executive officers of the Company as a group. The address of each of the directors and officers is 149 Commonwealth Drive, Menlo Park, CA 94025. A total of 25,948,43752,122,879 shares of the Company’s common stock were issued and outstanding as of March 30, 2016.April 7, 2021. Name and Address of Beneficial Owners | | Number of Shares Beneficially Owned (1) | | | Percent of Total (1) | | Neuberger Berman Group LLC (2) | | | 2,809,933 | | | | 10.8 | % | 605 Third Avenue | | | | | | | | | New York, NY 10158 | | | | | | | | | BlackRock, Inc. (2) | | | 2,411,174 | | | | 9.3 | % | 55 East 52nd Street | | | | | | | | | New York, NY 10055 | | | | | | | | | The Vanguard Group (2) | | | 1,899,534 | | | | 7.3 | % | 100 Vanguard Blvd. | | | | | | | | | Malvern, PA 19355 | | | | | | | | | Kayne Anderson Rudnick Investment Management LLC (2) | | | 1, 498,710 | | | | 5.8 | % | 1800 Avenue of the Stars, 2nd Floor | | | | | | | | | Los Angeles, CA 90067 | | | | | | | | | Richard L. Schlenker (3) | | | 307,209 | | | | 1.2 | % | Paul R. Johnston, Ph.D. (4) | | | 201,792 | | | | * | | Robert D. Caligiuri, Ph.D. | | | 133,312 | | | | * | | Michael R. Gaulke (5) | | | 106,174 | | | | * | | Paul D. Boehm, Ph.D. | | | 44,045 | | | | * | | Catherine Ford Corrigan Ph.D. | | | 40,847 | | | | * | | John B. Shoven, Ph.D. (5) | | | 27,514 | | | | * | | Stephen C. Riggins (5) | | | 8,204 | | | | * | | Karen A. Richardson (5) | | | 6,306 | | | | * | | Debra L. Zumwalt (5) | | | 5,234 | | | | * | | All Directors & Executive Officers (14 persons) (6) | | | 907,945 | | | | 3.5 | % |
Name and Address of Beneficial Owners | | Number of Shares Beneficially Owned (1) | | | Percent of Total (1) | | BlackRock, Inc. (2) | | | 8,006,990 | | | | 15.4 | % | 55 East 52nd Street New York, NY 10055 | | | | | | | | | The Vanguard Group (2) | | | 5,411,599 | | | | 10.4 | % | 100 Vanguard Blvd. Malvern, PA 19355 | | | | | | | | | Neuberger Berman Group LLC (2) | | | 3,336,327 | | | | 6.4 | % | 1290 Avenue of the Americas New York, NY 10104 | | | | | | | | | Richard L. Schlenker, Jr. (3) | | | 327,458 | | | * | | Paul R. Johnston, Ph.D. (4) | | | 194,442 | | | * | | Catherine Ford Corrigan, Ph.D. (5) | | | 160,361 | | | * | | John B. Shoven, Ph.D. (6) | | | 69,828 | | | * | | Maureen Reitman, Sc.D. | | | 33,463 | | | * | | Karen A. Richardson (6) | | | 27,408 | | | * | | Debra L. Zumwalt (6) | | | 24,140 | | | * | | Steven J. Murray, Ph.D. | | | 23,734 | | | * | | Brad James, Ph.D. | | | 7,342 | | | * | | Carol Lindstrom (6) | | | 7,128 | | | * | | George H. Brown | | | — | | | * | | All Directors & Executive Officers (16 persons) (7) | | | 951,842 | | | | 1.8 | % |
* | * | Represents less than one percent of the outstanding common stock of the Company. |
(1) | (1) | The number and percentage of shares beneficially owned is determined under rules of the Securities and Exchange Commission (“SEC”), and the information is not necessarily indicative of beneficial ownership for any other purpose. UnderIn accordance with SEC rules, beneficial ownership includes any shares as to which the individual has sole or shared voting power or investment power and also any shares thatas to which the individual has the right to acquire sole or shared voting power or investment power within sixty days of March 30, 2016,April 7, 2021, through the exercise of any stock option or other right. The denominator of the calculation consists of shares the director’s anddirector or executive officer’s haveofficer has the right to acquire through the exercise of any stock option or other right within sixty days of March 30, 2016,April 7, 2021, plus the Company’s total shares outstanding as of March 30, 2016.April 7, 2021 (but not the shares any of the other directors and executive officers have the right to acquire through the exercise of any stock option or other rights within sixty days of April 7, 2021.) Unless otherwise indicated in the footnotes, each person has sole voting and investment power (or shares such powers with his or her spouse) with respect to the shares shown as beneficially owned. |
(2) | (2) | Based on information contained in a report on Schedule 13G filed on January 25, 2021 for BlackRock, Inc., who has sole voting power over 7,914,751 shares and sole dispositive power over 8,006,990 shares, a report on Schedule 13G/A filed on February 10, 2021 for The Vanguard Group, who has shared voting power over 118,218 shares, sole dispositive power over 5,253,862 shares and shared dispositive power over 157,737 shares, a report on Schedule 13G/A filed with the SEC on February 9, 201612, 2021 for Neuberger Berman Group LLC, who has shared voting and dispositive power over all of these shares, a report on Schedule 13G/A filed on January 26, 2016 for BlackRock, Inc., who has sole voting power over 2,352,295 and sole dispositive power over 2,411,174 shares, a report on Schedule 13G/A filed on February 10, 2016 for The Vanguard Group, who has sole voting power over 56,556 shares, shared voting power over 2,300 shares, sole dispositive power over 1,842,4783,296,804 shares and shared dispositive power over 57,056 shares, and a report on Schedule 13G/A filed on February 10, 2016 for Kayne Anderson Rudnick Investment Management LLC, who has sole voting and dispositive power over 1,256,322 shares and shared voting and dispositive power over 242,3883,336,327 shares. |
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| (3) | Includes 109,50065,394 shares of common stock subject to options exercisable within sixty days of March 30, 2016.April 7, 2021. |
(4) | (4) | Includes 109,250127,500 shares of common stock subject to options exercisable within sixty days of March 30, 2016.April 7, 2021 and 1,675 shares on common stock to be issued upon the conversion of restricted stock units within sixty days of April 7, 2021. |
(5) | (5)Includes 93,500 shares of common stock subject to options exercisable within sixty days of April 7, 2021. |
(6) | Includes 2,3541,675 shares of common stock to be issued upon the conversion of restricted stock units within sixty days of March 30, 2016.April 7, 2021. |
(7) | (6) | Includes 218,750286,394 shares of common stock subject to options exercisable within sixty days of March 30, 2016April 7, 2021 and 11,7708,375 shares of common stock to be issued upon the conversion of restricted stock units within sixty days of March 30, 2016.April 7, 2021. |
Delinquent Section 16(a) Beneficial Ownership Reporting Compliance Reports The Company believes that during fiscal 2015,2020, all filings with the SEC, by its executive officers, directors and 10% stockholders complied with requirements for reporting ownership or changes in ownership of Company common stock pursuant to Section 16(a) of the Securities Exchange Act of 1934. 1934, except for the following: A failure to file a Form 4, Statement of Changes in Beneficial Ownership, on a timely basis for Maureen Reitman with regards to the sale of 2,000 shares of Company stock on August 10, 2020. The form 5 reporting this sale was filed on February 12, 2021. Compensation Committee Interlocks and Insider Participation During fiscal 2015,2020, Mr. Riggins,Brown, Ms. Lindstrom, Ms. Richardson, Dr. Shoven, and Ms. Zumwalt served as members of the Human Resources Committee. No member of the Human Resources Committee is or was formerly an officer or an employee of the Company or any of its subsidiaries. No interlocking relationship exists betweenDuring fiscal 2020, none of the Company’s Boardexecutive officers served as a member of Directorsthe compensation committee (or other board committee performing similar functions) or as a director of an entity for which any member of the Human Resources Committee andor the Board of Directors or Compensation Committee of any other company, nor has any such interlocking relationship existed in the past.served as an executive officer.
22 EXECUTIVE OFFICEROFFICER COMPENSATION COMPENSATION DISCUSSION AND ANALYSIS This Compensation Discussion and Analysis explains our compensation philosophy, objectives, policies and practices with respect to our President and Chief Executive Officer, our Executive Vice President and Chief Financial Officer and our other three most highly-compensated executive officers, as determined in accordance with applicable SEC rules and as set out in the “Summary Compensation Table”.Table.” We collectively refer to these five individuals as our “named executive officers.” General Philosophy. Our fundamental compensation philosophy is to align management’s incentives with the long-term interests of our stockholders, create a sense of partnership and to provide a retention vehicle. We strive to compensate our named executive officers competitively with executives and consulting professionals throughout the industry and geographies in which we operate.Executiveoperate. Executive officer compensation is based on the performance of the Company, individual achievements and the competitive environment. Individual performance assessments are based on appraisals of financial performance, professional accomplishments and leadership that meet the level of excellence demanded. We use a total compensation approach for our named executive officers, in which each element of compensation is reviewed individually and considered collectively with the other elements of our compensation program to ensure that it is consistent with the objectives of both that particular element of compensation and our overall compensation program. Our compensation program consists of the following elements: base salary, bonus, equity compensation and other benefits. Say of Pay.During our Board and Committee Meetingscommittee meetings on September 10, 2015,11, 2020, we considered the results of the “say on pay” proposal from our 20152020 proxy, on which 99.2%96.8% of votes cast by our stockholders were in support of our executive compensation policies and decisions for fiscal 2014.2019. Our approach for fiscal 20152020 on compensation policies and decisions remained consistent with our 20142019 approach and no substantial changes were made during fiscal 2015. Our compensation program consists of the following elements: base salary, bonus, equity compensation and other benefits.2020. Board Process. The responsibility for determining the compensation of our named executive officers has been delegated by the Board of Directors to the Human Resources Committee (which is hereinafter referred to as the “Committee”). As described in more detail below, the Committee’s responsibilities include establishing the general compensation policies for all employees and overseeing the specific compensation for officers of the Company. The Committee regularly reviews these compensation programs and makes adjustments as appropriate to accomplish its objectives. The Committee met five times during fiscal 2015. 2020. In the case of the President and Chief Executive Officer, the Committee reviews the President and Chief Executive Officer’s written assessment of hisher performance, evaluates the performance of the President and Chief Executive Officer relative to hisher objectives and determines the appropriate compensation. For the other executive officers, the President and Chief Executive Officer evaluates their performance and presents hisher evaluation and compensation recommendations to the Committee for review and approval. The Committee also approves all equity compensation grants. The Charter of the Committee is available on our website at: http:https://www.exponent.com/investors/corporate-governance/. The Charter of the Committee provides for the Committee to retain, and terminate as necessary, a compensation consultant. During 2014,2020, the Committee engaged Compensia, an executive compensation consulting firm, to provide recommendations regarding athe framework for performance objectives, as discussed below, and a group of publicly-traded professional service companies with revenue, operating income and business focus comparable to Exponent that will be used to develop competitive compensation data for our President and Chief Executive Officer and our Executive Vice President and Chief Financial Officer. For fiscal 2015,2020, the Committee reviewed competitive compensation data for the chief executive officer and chief financial officer of nineeight publicly-traded professional service companies recommended by Compensia with revenue, operating income, market capitalization, and business focus comparable to Exponent. Those companies included The Advisory Board, The Corporate Executive Board, CRA International, FTI Consulting, Heidrick and Struggles, Huron Consulting Group, ICF International, Korn/Ferry International, Resources Connection, and The Hackett Group. There were no changes to this group of companies as compared to fiscal 2019 except for the removal of Navigant Consulting and Resources Connection.which was acquired. During 2015,2020, the Committee also reviewed executive compensation survey data compiled by Radford, a compensation survey provider, for chief executive officers and chief financial officers of publicly-traded companies in Northern California with annual revenues in the $200 million to $999 million range. The Committee does not target compensation against a specific percentile or range of percentiles within any peer group because there are no comparable companies that offer the same technical capability and breadth of services as Exponent. We use the 23
data for a general understanding of the marketplace. The competitive compensation data for base salary, total cash compensation and long-term incentives and the executive compensation survey data provided by Radford were reviewed by the Committee to ensure that the President and Chief Executive Officer’s compensation is not an outlier relative to the peer group reviewed. The competitive compensation data for base salary, total cash compensationOfficer and long-term incentives and the executive compensation survey data for chief financial officers provided by Radford also were reviewed by the Committee to ensure that the Executive Vice President and Chief Financial Officer’s compensation isare not an outlieroutliers relative to the peer groupsgroup reviewed. Compensation and Risk Management The Committee does not believe that our executive compensation program encourages excessive or unnecessary risk-taking. By dividing our executives’ compensation into three key elements, the Committee believes it has properly weighted the performance compensation eligible to be earned by our executives appropriately between short-term and long-term goals. Additionally, the annual bonus for the President and Chief Executive Officerall executive officers is capped at two times histheir target bonus and 40% of each executive officer’s annual bonus is settled with fully vested restricted stock units that are not delivered for four years. These provisions add protection against disproportionately large short-term incentives. The primary component of our equity compensation program is restricted stock units, which cliff vest four years from the date of grant. The delayed vesting encourages our executives’ sustained focus on the long-term performance of the Company.Company and encourages retention. The Committee believes our executive compensation program promotes proper alignment of our executives’ interests with those of the Company’s stockholders. Elements of Compensation Program Base Salary. We believe that competitive base salaries are necessary to attract and retain management talent critical to achieving our business objectives. We strive to provide base salaries commensurate with comparable executives at professional service organizations ofwith similar sizerevenue, operating income, market capitalization, business focus and location and with consulting professionals of similar background and experience working for both professional service organizations and in private practice. Base salaries are reviewed annually and adjusted to realign salaries with market levels after taking into account our performance, as well as the individual’s responsibilities, experience and performance. The level of total compensation relative to our other executive officers, senior scientific and engineering consultants that we hire and those that have left to compete with us are also considered when determining executive officer base salaries. Effective April 2, 2016,3, 2021, the annual base salary for Dr. Johnston,Corrigan, President and Chief Executive Officer, increased 4%7% from $650,000$725,000 to $675,000.$775,000. Dr. Johnston’sCorrigan’s increased annual base salary reflected a level that the Committee concluded was appropriate based upon Dr. Johnston’sCorrigan’s performance and the competitive compensation data. Effective April 2, 2016,3, 2021, the annual base salary for Mr. Schlenker, Executive Vice President and Chief Financial Officer, increased 5%4% from $420,000$520,000 to $440,000.$540,000. Mr. Schlenker’s increased annual base salary reflected a level that the Committee concluded was appropriate based upon Mr. Schlenker’s performance and the competitive compensation data. Effective April 3, 2021, the annual base salary for Dr. Reitman, Group Vice President, increased 5% from $500,000 to $525,000. Dr. Reitman’s increased annual base salary reflected a level that the Committee concluded was appropriate based upon Dr. Reitman’s performance during fiscal 2020. Effective April 3, 2021, the annual base salary for Dr. James, Group Vice President, increased 6% from $410,000 to $435,000. Dr. James’s increased annual base salary reflected a level that the Committee concluded was appropriate based upon Dr. James’s performance during fiscal 2020. For fiscal 2016,2020, the Committee concluded that the annual salariesbase salary for Dr. Corrigan, Group Vice President; Dr. Caligiuri, Group Vice President; and Dr. Boehm,Murray, Group Vice President, of $500,000, $500,000, and $400,000, respectively, werewas competitive and would not be increased. 24
Bonus. Annual bonuses are designed to create an incentive and to reward named executive officers for their contributions to our performance by making a significant portion of their total compensation variable. Our bonus plan covers all employees, including named executive officers, and the bonus pool is equal to 33% of our pre-tax income before bonuses, stock-based compensation, realized gain/loss on foreign exchange and interest income. An additional amount of up to the amount of the President and Chief Executive Officer’s target bonus willmay be added to the bonus pool if the President and Chief Executive Officer’s targets for revenue and profit are exceeded, as discussed below. Our bonus pool has historically been 33% and the Committee determined that this amount was competitive for fiscal 2015.2020. The total amount available in the bonus pool for fiscal 20152020 was $38,042,000.$51,126,000. Generally, 40% of each named executive officer’s annual bonus is settled with fully vested restricted stock unit awards, rather than cash, to provide a longer term incentive, under which each executive officer has the right to receive shares of our common stock four years from the date of grant. The remainder of each executive officer’s annual bonus is paid in cash. Where a named executive officer has responsibilities for both providing direct consulting services to clients and managing a business unit, his or her performance is generally weighted toward the direct consulting activities. For a named executive officer who has broader corporate responsibilities, such as our Executive Vice President and Chief Financial Officer, his or her performance is based on that officer’s overall contribution to the Company. For fiscal 2015,2020, the President and Chief Executive Officer’s performance was evaluated using a process developed with the help of Compensia, based on performance objectives in three categories: revenue, profitability, and leadership. The portion of the bonus determined based on objective business criteria established by the Committee is intended to qualify as performance-based compensation pursuant to Section 162(m) of the Internal Revenue Code, while the portion of the bonus based on qualitative criteria is not. We have done this based upon our philosophy of determining total executive compensation using a combination of quantitative and qualitative assessments of performance. Performance Awards. Our 2008 Equity Incentive Plan authorizes the grant of performance awards to our executive officers. Performance awards are payable only to the extent certain performance targets, based on objective business criteria specified by the Committee, are achieved in the relevant measurement period. Performance awards are payable in cash or restricted stock units, at the discretion of the Committee. At the beginning of each year, the Committee must determine the performance goals and the achievement necessary for the bonus payout. After the conclusion of the performance period, the Committee certifies (1) the extent to which each executive officer has achieved the applicable prior fiscal year’s performance targets, and (2) the appropriate amount, if any, to be paid with respect to such performance-based annual incentive award. Even if the performance targets are achieved, the Committee may reduce the amount of an award through “negative discretion” and thereby reduce the payment made under a performance award, but the Committee cannot increase the amount of such award. On February 13, 2015,2020, the Committee determined the performance award opportunity to be granted to Dr. Johnston, President and Chief Executive Officer,Corrigan for fiscal 2015.2020. In doing so, the Committee established the performance targets, the performance required to achieve payout under the award and maximum amounts payable under this award. The Committee set the target bonus level and maximum payout at amounts they believe are competitive. Dr. Johnston’sCorrigan’s target award was set at $216,667$241,667 (one-third of Dr. Johnston’sCorrigan’s base salary)salary for 2020) with the maximum amount payable set at twice the target. Performance between the applicable targets would be paid on a straight-line basis. In establishing the target for Dr. Johnston’s 2015Corrigan’s 2020 performance award, the Committee decided that 60% of the award, to the extent earned, would be payable in cash and 40% of the award would be payable in fully vested restricted stock units under which Dr. JohnstonCorrigan has the right to receive shares of our common stock four years from the date of grant. Two performance targets were established. The revenue performance target was a 3.5%6.0% increase in revenues before reimbursements. This target is measured on a scale of 0 to 2 with 0 being equal to 6.5%4.0% revenue decline, 1 being equal to 3.5%6.0% revenue growth, and 2 being equal to 13.5%16.0% revenue growth. Performance between the targets is prorated on a straight-line basis. We did not meet this quantitative goal with actual revenues before reimbursements growth of 2.25%declining 3.3%. This resulted in a quantitative performance factor for this objective of 0.880.07 on a scale of 0 to 2. 25
The profit performance target was to meet the adjusted EBITDAS*EBITDAS (EBITDAS is a non-GAAP financial measure defined as net income before income taxes, interest income, depreciation and amortization and stock-based compensation) target margin. The adjusted EBITDAS margin is the calculated margin (EBITDAS/revenues before reimbursements) excluding the realized gain/loss on foreign exchange. The EBITDAS target margin for fiscal 20152020 was 29.89%32.25% increased or decreased by five basis points for each 1% of revenue before reimbursements growth above or below 3.5%6%. This is also measured on a scale of 0 to 2 with 0 being equal to 200 basis points below the EBITDAS target margin, 1 being equal to the EBITDAS target margin, and 2 being equal to 200 basis points above the EBITDAS target margin. We exceededdid not meet this quantitative goal by exceedingand were below the EBITDAS target margin by 3139 basis points. This resulted in a quantitative performance factor for this objective of 1.150.80 on a scale of 0 to 2. | * | EBITDAS is a non-GAAP financial measure defined as net income before income taxes, interest income, depreciation and amortization and stock-based compensation. |
On February 12, 2016,11, 2021, the Committee certified and determined the amountamounts payable to Dr. JohnstonCorrigan with respect to the cash and equity components of hisher performance award for fiscal 2015.2020. Both of the performance targets were weighted equally. This resulted in a composite performance factor of 1.010.435 on a scale of 0 to 2. Accordingly, the formula amount payable for the performance award was $219,000$105,000 (target of $216,667$241,667 multiplied by the composite performance factor of 1.01)0.435). Qualitative Bonuses. The target for Dr. Johnston’sCorrigan’s qualitative bonus was set at $433,333$483,333 (two-thirds of Dr. Johnston’sCorrigan’s base salary)salary for 2020) for fiscal 20152020 with the maximum payout set at twice the target. The Committee set the target bonus level and maximum payout at amounts they believe are competitive. Performance was evaluated based on objectives in three categories: revenue, profitability and leadership. The performance objectives for revenue and profit are weighted 25% each and the performance objective for leadership is weighted 50%. The Committee may reduce the qualitative bonus from the target amount at their discretion. With respect to the revenue objective, the determination was based on the judgment of the Committee, taking into consideration factors such as how well we accomplished strategic growth initiatives and added top talent. For the profit objective, the determination was based on the judgment of the Committee, taking into consideration factors such as how we were able to control expenses and manage headcount growth. The leadership objective was based on the judgment of the Committee taking into consideration factors such as management of enterprise risk and our overall strategic direction. In determining the appropriate qualitative bonus, the Committee considered Dr. Johnston’sCorrigan’s contributions to achieving each of the three objectives. In making a qualitative assessment of the revenue objective the Committee determined that this objective was exceeded. Our revenue was substantially impacted by the COVID-19 pandemic, but exceeded dueexpectations in light of the extent of macroeconomic disruption and business and travel restrictions to which our clients were subject. Business and travel restrictions associated with the pandemic impacted our performance in human participant studies, legal work, and laboratory work for non-essential businesses. Court closures caused clients in multiple industries to pause work for ongoing cases and to delay the hiring of experts for newly-filed cases. Despite the business and travel restrictions, we continued our business development efforts associated with our strategic growth initiatives and had a strong hiring year for talent. We realized strong growth in our proactive services and increased both the additionnumber and strength of top talent. our industrial client relationships. As the pandemic took hold late in the first quarter, we rapidly positioned ourselves to capture work related to the coronavirus. We were engaged by clients to provide regulatory support in the United States and Europe as they registered biocide products and disinfecting devices and developed diagnostic tests; we advised clients on occupational health and safety concerns including testing, contact tracing, and disinfection; we utilized wearable technology platforms for COVID-19 risk monitoring and mitigation, and we developed protocols for assessing vaccine safety. In making a qualitative assessment of the profit objective, the Committee determined that this objective was exceeded due to how expenses were managed, infrastructure was leveraged, and headcount was managed. The Committee also consideredWe controlled expenses effectively in 2020 while making important investments in our corporate functions such as Information Technology and Business Development. Increased expenses associated with environmental health and safety measures were more than offset by large reductions in nonchargeable travel associated with business development and recruiting, which were curtailed due to the impact of one of our major investigations suddenly ending in July of 2015 in their qualitative assessment of the revenue and profit objectives. pandemic. With respect to the leadership objective, the Committee recognized that this objective was exceeded due to the management of enterprise risk, and the strategic direction provided. provided, and the retention of key employees. Health and safety concerns associated with the COVID-19 pandemic were effectively managed and we successfully 26
transitioned our operations to a remote working environment at the start of the pandemic. We provided critical employee support as our teams navigated the many challenges of working from home. We also made substantial progress in 2020 in our efforts to improve diversity, equity and inclusion at the firm. Based on the Committee’s qualitative evaluation, the composite performance factor was 1.451.85 on a scale of 0 to 2. Accordingly, the amount payable for the qualitative bonus was $606,000$895,000 (target of $416,667$483,333 multiplied by the composite performance factor of 1.45).1.85) for Dr. Corrigan. The Committee decided that 60% of the qualitative bonus will be paid in cash and 40% of the qualitative bonus will be settled with fully vested restricted stock units under which Dr. JohnstonCorrigan has the right to receive shares of our common stock four years from the date of grant. We do not have specific target bonuses for our other named executive officers. The bonuses for the other named executive officers were determined on a total compensation basis based on their relative contribution to our overall performance. Where a named executive officer has responsibilities for both providing direct consulting services to clients and managing a business unit, his or her performance is generally weighted toward the direct consulting activities. The size of our bonus pool was also considered when determining the annual bonuses for our other named executive officers.
Equity Compensation. Our equity compensation program is designed to align the named executive officers and stockholders’ interests, create a sense of partnership and long-term incentives, and provide a mechanism for retention and to provide a competitive total compensation package. We use a combination of restricted stock units and stock options to achieve these objectives. Generally, 40% of each named executive officer’s annual bonus is settled with fully vested restricted stock unit awards. The percentage of each named executive officer’s annual bonus settled with vested restricted stock unit awards may be less than 40% when called for by the terms of an employment agreement or when other equity grants made were deemed adequate to align named executive officers and stockholders’ interests, by using long-term incentives to create a sense of partnership, provide a mechanism for retention and provide a competitive total compensation package.interests. Under these restricted stock unit awards, each executive officer has the right to receive shares of our common stock four years from the date of grant. Each named executive officer who received a fully vested restricted stock unit award is also granted a matching number of unvested restricted stock unit awards. These unvested restricted stock unit awards cliff vest four years from the date of grant provided the holder has met certain employment conditions. In the case of retirement at 59 ½ years or older, all unvested restricted stock unit awards will continue to vest, provided that the named executive officer does all consulting work through the Company and does not become an employee for a past or present client (direct or indirect) or competitor of the Company. Our practice is to determine each named executive officer’s bonus and the dollar amount of vested and unvested restricted stock unit awards following the availability of financial results for the prior year. With the exception of significant promotions and new hires, we generally grant restricted stock unit awards once a year during the allocation of our bonus pool. For restricted stock unit awards our 2008 Equity Incentive Plan defines the fair market value of the restricted stock unit awards as the closing price of our stock on the day of grant. During the annual review process in February 2015,2020, the Committee granted a stock option to purchase 24,000 shares of our common stock to Dr. Johnston, President and Chief Executive Officer,Corrigan and a stock option to purchase 16,000 shares of our common stock to Mr. Schlenker, Executive Vice President and Chief Financial Officer.Schlenker. These stock option grants reflect levels that the Committee concluded were generally appropriate based upon past practices within the Company, each individual’s total stock ownership and the amount needed to remain competitive. For stock option awards the exercise price is equal to the closing price of our stock on the date of grant. Our option awards vest ratably over a four-year period beginning on the grant date, subject to continued employment. All stock option awards continue to vest in the case of retirement at 59 ½ years or older, provided that the named executive officer does all consulting work through the Company and does not become an employee for a past or present client (direct or indirect) or competitor of the Company. Unvested restricted stock unit awards and stock options are occasionally granted for select new hires and promotions. There were no new hire awards granted to any named executive officers. Executive Stock Ownership Guidelines.We believe that the financial interests of our executive officers should be aligned with those of our stockholders. Our stock ownership guidelines are determined as a multiple of the named executive officer’s annual base salary. Individual guidelines are three times for the President and Chief Executive Officer, two times for theExecutive Vice President and Chief Financial Officer and one time for the other named executive officers. Stock that counts towards satisfaction of our stock ownership guidelines includes shares owned outright by the named 27
executive officer or his or her immediate family members residing in the same household or in trust and restricted stock units, whether or not vested. The value of shares owned outright is Exponent’sthe prior 365-day average closing price for the Company’s common stock price.stock. The value of restricted stock units is the grant date fair value. The calculation is done at the beginning of each year. Named executive officers are required to achieve their stock ownership guideline within five years of the date the guidelines were adopted. If a person’s stock ownership guideline increases, that person has a five-year period to achieve the new guideline. Until the guideline is achieved, the person is required to retain at least 50% of the net shares delivered through our Restricted Stock Unit Program or the exercise of stock options. Net shares refer to those that remain after shares are sold or netted to pay the exercise price of stock options and withholding taxes. As of March 30, 2016,April 7, 2021, all the named executive officers met the stock ownership guidelines or are expected to meet the applicable ownership guidelines within the specified time period. Hedging and Pledging.Our policies do not permit any directorinsider trading policy prohibits directors, officers, and employees from selling short or employee, including our named executive officers, to “hedge” their ownership byotherwise engaging in short saleshedging or offsetting transactions involving Exponent securities.the Company’s securities, including the trading of those securities on margin. Our policies do not permit any director or officer, including our named executive officers, to pledge Exponent securities as collateral. Clawback Policy. We have a “clawback” policy for the recovery of excessive incentive-based compensation. In the event that we are required to prepare an accounting restatement due to material noncompliance with any financial reporting requirement under the U.S. federal securities laws, we will use reasonable efforts to recover from any current or former officer of the Company who was paid or granted incentive based compensation and whom the Board has determined has willfully committed an act of fraud, dishonesty or recklessness in the performance of his or her duties as an officer that contributed to the noncompliance that resulted in the Company’s obligation to prepare the accounting restatement, all excessive incentive-based compensation. Incentive-based compensation includes the amount of the culpable employee’s annual incentive awards paid under our cash incentive program, stock options and performance-based equity or equity-based awards (or any amount attributable to such awards) paid or granted to the culpable employee under our long-term incentive equity program, and any other incentive-based compensation paid or granted in respect of Company and/or individual performance to a culpable employee pursuant to an “incentive plan” as such term is defined in Item 402(a)(6)(iii) of Regulation S-K under the Exchange Act. The policy applies to financial statements filed in a rolling three-year, lookback period. This clawback policy is in addition to any policies or recovery rights that are required under applicable laws, including the Sarbanes Oxley Act and the Dodd Frank Act. No Compensation Consultant Conflicts of Interest. We are not aware of any conflict of interest that has been raised by the work performed in 20142020 by Compensia. We did not engageDuring 2020 the Human Resources Committee reviewed the six independence factors enumerated by the Securities and Exchange Commission and determined that Compensia during 2015.was independent. Nonqualified Deferred Compensation. To attract and retain high performing executive officers and consultants we have a nonqualified deferred compensation plan under which we provide certain highly compensated employees, including the named executive officers, the opportunity to elect to defer the receipt of compensation. Participants in the plan may elect to defer up to 100% of their compensation including base salary and bonus. We also retain the discretion to make company contributions for any participant. For additional information, please refer to the Nonqualified Deferred Compensation table. Other Benefits. Executive officers participate in our other benefit plans on the same terms as other employees. These plans include medical and dental insurance, life insurance, an employee stock purchase plan and company contributions to each employee’s defined contribution retirement account. We also provide paid vacation and other paid holidays to all eligible employees, including named executive officers. Tax Deductibility of Pay Section 162(m) of the Internal Revenue Code of 1986, as amended, generally places a limit of $1,000,000 on the amount of annual compensation that we may deduct in any one year with respect to certain executive officers unless the compensation is qualifying performance-based compensation where certain requirements are met. ItThe Tax Cuts and Jobs Act (the “Tax Legislation”) was enacted on December 22, 2017. Under the Tax Legislation, the exclusion for performance-based compensation will not be available with respect to taxable years beginning after December 31, 2017 unless the compensation is pursuant to a written binding contract which was in effect on November 2, 2017 and is not modified in any material respect on or after such date. Pursuant to the intentTax Legislation, for the taxable year 28
beginning after December 31, 2017, Section 162(m) of the CommitteeCode was expanded to have stock optioncover additional executive officers, including the chief financial officer, so that the compensation of the chief executive officer and performance awards qualify for full deductibility tochief financial officer (at any time during the extent feasible and consistent with our overall compensation objectives. Our 2008 Equity Incentive Plan is designed to enable compensation recognized in connection with the exercise of optionsfiscal year), and the settlementthree other most highly compensated executive officers (as of performance awardsthe end of any fiscal year) will be subject to qualify as performance-based compensation eligible for deductibility under Section 162(m). Base salary, qualitative bonuses, and restricted stock unit awards (excluding performance awards settled with restricted stock units) do not qualify as exceptions to the deduction limit under Section 162(m) duelimitation under the Code. Any executive officer whose compensation is subject to the Committee’s philosophy of determining total executive compensation using a combination of quantitative and qualitative assessments of performance. For fiscal 2016 the Committee adopted a performance threshold which, if met or exceeded, will allow qualitative bonuses and all restricted stock unit awards to qualify as performance based compensation eligible for deductibility under Section 162(m). The 2016 performance threshold is $45 million of EBITDAS, which must be exceeded prior to the payout of any bonus under this plan and the grant of any restricted stock units under this plan to our current executive officers. If the $45 million of EBITDAS is exceeded, the Committee can approve a payout of up to 200% of the Code in taxable years beginning after December 31, 2016 target bonus for each executive officer. The 2016 target bonus forwill have compensation subject to Section 162(m) of the President and Chief Executive Officer and the Executive Vice President and Chief Financial Officer is their current base salary plus an additional 40% for matching restricted stock units. The 2016 target bonusCode for all offuture years, including years after the remaining executive officers is 80% of their current base salary plus an additional 40% for matching restricted stock units.
terminates employment or dies. Compensation Accounting Matters The Committee also considers the accounting and cash flow implications of various forms of executive compensation. In our financial statements, we record salaries and bonuses as expenses in the amount paid, or to be paid, to the named executive officers. Accounting rules also require us to record an expense in our financial statements for equity awards, even though equity awards are not paid as cash to employees. The Committee believes, however, that the many advantages of equity compensation more than compensate for the non-cash accounting expense associated with these types of awards. We currently amortize compensation expense associated with equity awards over an award’s requisite service period and establish fair value of equity awards in accordance with applicable accounting standards. Based upon the structure of our employee stock purchase plan program we are not required to record compensation expenses for financial statement purposes in connection with employees’ rights to purchase our stock granted under this program. Potential Payments upon Termination or Change-in-Control Our restricted stock unit award agreements state that in the event of a change in control of the Company, the successor shall assume or substitute equivalent awards on the same terms and conditions. If the award holder is involuntarily terminated within a two-year period beginning on the date of the change of control for any reason other than the award holder’s failure to substantially perform the duties of the award holder’s position, all awards are vested and settled on the date of termination.Assuming a change in control and involuntary termination of employment, the value of restricted stock unit awards that would have vested based on the closing price of our common stock on December 31, 2015the last business day of $49.95fiscal 2020, January 1, 2021 of $90.03 for each named executive officer was as follows: Dr. Johnston $2,148,249,Corrigan $2,539,000, Mr. Schlenker $1,370,329,$2,128,000, Dr. Corrigan $1,035,663,Reitman $1,367,000, Dr. Caligiuri $1,332,266,James $1,015,000, and Dr. Boehm $1,423,476.Murray $1,888,000. We do not have any other contracts, agreements (including employment agreements), plans or arrangements, whether written or unwritten, providing for payments to a named executive officer at, following, or in connection with any termination of a named executive officer or a change in control or a change in a named executive officer’s responsibilities. 29
REPORT OF THE HUMAN RESOURCES COMMITTEE OF THE BOARD OF DIRECTORS The following report of the Human Resources Committee of the Board of Directors does not constitute soliciting material and should not be considered filed or incorporated by reference into any other Company filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent the Company specifically incorporates this Report by reference therein. The Human Resources Committee of the Board of Directors oversees the general compensation policies for all employees and the specific compensation plans for officers of the Company, including the Chief Executive Officer. The Committee is composed of five independent non-employee directors. No executive officers of the Company are included on the Human Resources Committee. The Committee has reviewed and discussed with management the “Compensation Discussion and Analysis”, and based on the review and discussion, the Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement. Members of the Human Resources Committee Debra L. Zumwalt, Chairperson George H. Brown Carol Lindstrom Karen A. Richardson John B. Shoven, Ph.D.
SUMMARY COMPENSATION TABLE The following table summarizes information regarding compensation earned by our named executive officers during fiscal 2015:2020 and, as applicable, fiscal 2019 and 2018. Name and Principal Position | | Year | | | Salary ($) (1) | | | Bonus ($) (2) | | | Stock Awards ($) (3) (5) | | Option Awards ($) (4) (5) | | | All Other Compensation ($) (6) | | | Total ($) | | | Year | | Salary ($) (1) | | | Bonus ($) (2) | | | Stock Awards ($) (3) (5) | | | Option Awards ($) (4) (5) | | | All Other Compensation ($) | | | | Total ($) | | Catherine Ford Corrigan, Ph.D. | | | 2020 | | | 711,539 | | | | 600,000 | | | | 840,000 | | | | 473,446 | | | | 49,808 | | (6) | | | 2,674,793 | | President and Chief Executive Officer | | | 2019 | | | 675,481 | | | | 630,000 | | | | 800,000 | | | | 454,785 | | | | 47,284 | | (6) | | | 2,607,550 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2018 | | | 603,843 | | | | 600,000 | | | | 600,000 | | | | 296,953 | | | | 42,269 | | (6) | | | 2,143,065 | | Paul R. Johnston, Ph.D. | | | 2015 | | | | 644,231 | | | | 495,000 | | | | 720,000 | | | | 319,298 | | | | 45,096 | | | | 2,223,625 | | | President and Chief | | | 2014 | | | | 619,231 | | | | 540,000 | | | | 720,000 | | | | 330,340 | | | | 43,346 | | | | 2,252,917 | | | Executive Officer | | | 2013 | | | | 609,047 | | | | 540,000 | | | | 680,000 | | | | 309,828 | | | | 42,633 | | | | 2,181,508 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Richard L. Schlenker | | | 2015 | | | | 415,385 | | | | 315,000 | | | | 440,000 | | | | 212,866 | | | | 29,077 | | | | 1,412,328 | | | 2020 | | | 514,616 | | | | 432,000 | | | | 600,000 | | | | 315,630 | | | | 36,023 | | (6) | | | 1,898,269 | | Executive Vice President, | | | 2014 | | | | 400,000 | | | | 330,000 | | | | 440,000 | | | | 220,226 | | | | 28,000 | | | | 1,418,226 | | | 2019 | | | 504,616 | | | | 450,000 | | | | 560,000 | | | | 303,190 | | | | 35,323 | | (6) | | | 1,853,129 | | Chief Financial Officer and Corporate Secretary | | | 2013 | | | | 405,203 | | | | 330,000 | | | | 440,000 | | | | 206,552 | | | | 28,364 | | | | 1,410,119 | | | Chief Financial Officer | | | 2018 | | | 475,000 | | | | 420,000 | | | | 600,000 | | | | 296,953 | | | | 33,250 | | (6) | | | 1,825,203 | | and Corporate Secretary | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Catherine Ford Corrigan, Ph.D. | | | 2015 | | | | 497,692 | | | | 300,000 | | | | 420,000 | | | | - | | | | 34,838 | | | | 1,252,530 | | | Maureen Reitman, Sc.D. | | | 2020 | | | 499,038 | | | | 285,000 | | | | 420,000 | | | | — | | | | 34,933 | | (6) | | | 1,238,971 | | Group Vice President | | | 2014 | | | | 487,692 | | | | 315,000 | | | | 400,000 | | | | - | | | | 34,138 | | | | 1,236,830 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Robert D. Caligiuri, Ph.D. | | | 2015 | | | | 500,000 | | | | 285,000 | | | | 420,000 | | | | - | | | | 35,000 | | | | 1,240,000 | | | Brad James, Ph.D. | | | 2020 | | | 409,135 | | | | 300,000 | | �� | | 420,000 | | | | — | | | | 28,639 | | (6) | | | 1,157,774 | | Group Vice President | | | 2014 | | | | 500,000 | | | | 315,000 | | | | 400,000 | | | | - | | | | 35,000 | | | | 1,250,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2013 | | | | 509,623 | | | | 300,000 | | | | 440,000 | | | | - | | | | 35,674 | | | | 1,285,297 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Paul D. Boehm, Ph.D. | | | 2015 | | | | 395,385 | | | | 285,000 | | | | 520,000 | | | | - | | | | 27,677 | | | | 1,228,062 | | | Steven J. Murray, Ph.D. | | | 2020 | | | 470,961 | | | | 270,000 | | | | 380,000 | | | | — | | | | 32,967 | | (6) | | | 1,153,928 | | Group Vice President | | | 2014 | | | | 377,692 | | | | 390,000 | | | | 420,000 | | | | - | | | | 26,438 | | | | 1,214,130 | | | 2019 | | | 463,846 | | | | 285,000 | | | | 480,000 | | | | — | | | | 32,469 | | (6) | | | 1,261,315 | | | | | 2013 | | | | 374,627 | | | | 315,000 | | | | 440,000 | | | | - | | | | 26,224 | | | | 1,155,851 | | | 2018 | | | 430,000 | | | | 360,000 | | | | 600,000 | | | | — | | | | 30,100 | | (6) | | | 1,420,100 | |
(1) | (1) | The base salaries for our NamesNamed Executive Officers took effect for 2015, 20142020, 2019 and 20132018 on April 4, 2020, March 28, 2015, March 29, 2014,30, 2019 and March 30, 2013,31, 2018, respectively. As such, the amounts in this column reflect three months at their prior year base salaries and nine months at their current year base salaries. Fiscal 20152020 and fiscal 20142018 included 52 weeks of activity as compared to 53 weeks of activity for fiscal 2013.2019. |
(2) | (2) | The amounts shown in this column represent the value of cash bonuses earned during the year indicated and paid in the first quarter of the subsequent year, excluding the portion settled with vested restricted stock unit awards. |
(3) | (3) | The amounts shown in this column represent the values of vested and unvested restricted stock unit awards granted during the year indicated, regardless of when earned. The value of restricted stock units granted during the first quarter of 20162021 to settle a portion of each named executive officer’s fiscal 20152020 bonus are not included in this column. |
(4) | (4) | The amounts shown in this column represent the Black-Scholes value calculated for stock options granted during the year indicated, regardless of when earned. |
(5) | (5) | The values of equity-based awards for this columnthese columns represent the grant date fair value of the awards in accordance with ASCAccounting Standards Codification (“ASC”) 718. However, pursuant to SEC rules, these values are not reduced by an estimate for the probability of forfeiture. All equity-based awards have dividend equivalent rights (“DER”), which entitle the holder of the award to the same dividend value per share as holders of common stock. DER are subject to the same vesting and other terms and conditions as the corresponding stock award or option award. DER are accumulated and paid when the underlying stock awards or option awards vest and are forfeited if the underlying stock awards or option awards are forfeited. See the notes to our consolidated financial statements in our Annual Report on Form 10-K for the year ended January 1, 20162021 regarding assumptions underlying the valuation of equity awards. |
(6) | (6) | The amounts shown in this column represent the value of Company contributions to each named executive officer’s defined contribution retirement account earned during the year indicated. The Company provides a defined contribution retirement plan for all of its employees whereby the Company contributes to each eligible employee’s account 7% of the employee’s eligible base salary plus overtime. These contributions are made to the 401(k) plan up to the statutory maximum. Effective January 1, 2013, anyAny portion of the 7% contribution in excess of the statutory maximum is made to the Company’s nonqualified deferred compensation plan. |
GRANTS OF PLAN-BASED AWARDSAWARDS IN FISCAL 2015 2020 The following table sets forth information regarding grants of plan-based awards to our named executive officers during fiscal 2015:2020: Name | | Grant Date | | Human Resource Committee Approval Date | | All Other Stock Awards: Number of Shares of Stock or Units (#) | | | All Other Option Awards: Number of Securities Underlying Options (#) (3) | | | Exercise or Base Price of Option Awards ($/Sh) | | | Closing Market Price of Underlying Security on Date of Grant ($/Sh) | | | Grant Date Fair Value of Stock and Option Awards ($) (4)(5) | | | Grant Date | | Human Resource Committee Approval Date | | All Other Stock Awards: Number of Shares of Stock or Units (#) | | | All Other Option Awards: Number of Securities Underlying Options (#) (5) | | | Exercise or Base Price of Option Awards ($/Sh) | | | Closing Market Price of Underlying Security on Date of Grant ($/Sh) | | | Grant Date Fair Value of Stock and Option Awards ($) (6)(7) | | Dr. Corrigan | | | 3/13/2020 | | 2/13/2020 | | | 4,385 | | (1 | ) | | | | | | | | | | | 67.69 | | | | 296,821 | | | | | | | | | | | | | | | | | | | 3/13/2020 | | 2/13/2020 | | | 1,820 | | (2 | ) | | | | | | | | | | | 67.69 | | | | 123,196 | | Dr. Johnston | | 03/13/2015 | | 02/13/2015 | | | 8,222 | (1) | | | | | | | | | | | 43.79 | | | | 360,000 | | | | | | 3/13/2020 | | 2/13/2020 | | | 4,385 | | (3 | ) | | | | | | | | | | | 67.69 | | | | 296,821 | | | | 03/13/2015 | | 02/13/2015 | | | 8,222 | (2) | | | | | | | | | | | 43.79 | | | | 360,000 | | | 3/13/2020 | | 2/13/2020 | | | 1,820 | | (4 | ) | | | | | | | | | | | 67.69 | | | | 123,196 | | | | 02/13/2015 | | 02/13/2015 | | | | | | | 24,000 | | | | 44.20 | | | | 44.20 | | | | 319,298 | | | 2/13/2020 | | 2/13/2020 | | | | | | | 24,000 | | | | 79.43 | | | | 79.43 | | | | 473,446 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Mr. Schlenker | | 03/13/2015 | | 02/13/2015 | | | 5,026 | (1) | | | | | | | | | | | 43.79 | | | | 220,000 | | | 3/13/2020 | | 2/13/2020 | | | 4,432 | | (1 | ) | | | | | | | | | | | 67.69 | | | | 300,002 | | | | 03/13/2015 | | 02/13/2015 | | | 5,026 | (2) | | | | | | | | | | | 43.79 | | | | 220,000 | | | 3/13/2020 | | 2/13/2020 | | | 4,432 | | (3 | ) | | | | | | | | | | | 67.69 | | | | 300,002 | | | | 02/13/2015 | | 02/13/2015 | | | | | | | 16,000 | | | | 44.20 | | | | 44.20 | | | | 212,866 | | | 2/13/2020 | | 2/13/2020 | | | | | | | 16,000 | | | | 79.43 | | | | 79.43 | | | | 315,630 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Dr. Corrigan | | 03/13/2015 | | 03/02/2015 | | | 4,798 | (1) | | | | | | | | | | | 43.79 | | | | 210,000 | | | Dr. Reitmann | | | 3/13/2020 | | 3/2/2020 | | | 3,103 | | (1 | ) | | | | | | | | | | | 67.69 | | | | 210,042 | | | | 03/13/2015 | | 03/02/2015 | | | 4,798 | (2) | | | | | | | | | | | 43.79 | | | | 210,000 | | | 3/13/2020 | | 3/2/2020 | | | 3,103 | | (3 | ) | | | | | | | | | | | 67.69 | | | | 210,042 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Dr. Caligiuri | | 03/13/2015 | | 03/02/2015 | | | 4,798 | (1) | | | | | | | | | | | 43.79 | | | | 210,000 | | | Dr. James | | | 3/13/2020 | | 3/2/2020 | | | 3,103 | | (1 | ) | | | | | | | | | | | 67.69 | | | | 210,042 | | | | 03/13/2015 | | 03/02/2015 | | | 4,798 | (2) | | | | | | | | | | | 43.79 | | | | 210,000 | | | 3/13/2020 | | 3/2/2020 | | | 3,103 | | (3 | ) | | | | | | | | | | | 67.69 | | | | 210,042 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Dr. Boehm | | 03/13/2015 | | 03/02/2015 | | | 5,940 | (1) | | | | | | | | | | | 43.79 | | | | 260,000 | | | Dr. Murray | | | 3/13/2020 | | 3/2/2020 | | | 2,807 | | (1 | ) | | | | | | | | | | | 67.69 | | | | 190,006 | | | | 03/13/2015 | | 03/02/2015 | | | 5,940 | (2) | | | | | | | | | | | 43.79 | | | | 260,000 | | | 3/13/2020 | | 3/2/2020 | | | 2,807 | | (3 | ) | | | | | | | | | | | 67.69 | | | | 190,006 | |
(1) | (1) | Amounts represent the number of fully vested restricted stock units granted under our 2008 Equity Incentive Plan. |
(2) | (2)Our 2008 Equity Incentive Plan authorizes the grant of performance awards to our executive officers. Performance awards are payable only to the extent certain performance targets, based on objective business criteria specified by the Human Resources Committee, are achieved in the relevant measurement period. Performance awards are payable in cash or restricted stock units, at the discretion of the Human Resources Committee. Amounts represent the number of fully vested restricted stock units granted by the Human Resources Committee to settle the equity component of Dr. Corrigan’s 2019 performance award. |
(3) | Amounts represent the number of unvested restricted stock units granted under our 2008 Equity Incentive Plan. These awards cliff vest four years from the date of grant. All unvested restricted stock units will continue to vest in the case of retirement at 59 ½ years or older, provided that the named executive officer does all consulting work through the Company and does not become an employee for a past or present client (direct or indirect) or competitor of the Company. |
(4) | (3)Our 2008 Equity Incentive Plan authorizes the grant of performance awards to our executive officers. Performance awards are payable only to the extent certain performance targets, based on objective business criteria specified by the Human Resources Committee, are achieved in the relevant measurement period. Performance awards are payable in cash or restricted stock units, at the discretion of the Human Resources Committee. Amounts represent the number of unvested restricted stock units granted by the Human Resources Committee to settle the equity component of Dr. Corrigan’s 2019 performance award. These awards cliff vest four years from the date of grant. All unvested restricted stock units will continue to vest in the case of retirement at 59 ½ years or older, provided that the named executive officer does all consulting work through the Company and does not become an employee for a past or present client (direct or indirect) or competitor of the Company. |
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(5) | Amounts represent options granted under our 2008 Equity Incentive Plan. These options become exercisable over a period of four years at a rate of 25% per year, subject to continued employment, and expire 10 years from the date of grant. All stock options will continue to vest in the case of retirement at 59 ½ years or older, provided that the named executive officer does all consulting work through the Company and does not become an employee for a past or present client (direct or indirect) or competitor of the Company. |
(6) | (4) | The amounts shown in this column represent the Black-Scholes value calculated for stock options granted. |
(7) | (5) | The values of equity-based awards for this column represent the grant date fair value of the awards in accordance with ASC 718. However, pursuant to SEC rules, these values are not reduced by an estimate for the probability of forfeiture. All equity-based awards have dividend equivalent rights (“DER”), which entitle the holder of the award to the same dividend value per share as holders of common stock. DER are subject to the same vesting and other terms and conditions as the corresponding stock award or option award. DER are accumulated and paid when the underlying stock awards or option awards vest and are forfeited if the underlying stock awards or option awards are forfeited. See the notes to our consolidated financial statements in our Annual Report on Form 10-K for the year ended January 1, 20162021 regarding assumptions underlying the valuation of equity awards. |
Restricted Stock Unit Awards.Each of the named executive officers were awarded the number of vested and unvested restricted stock unit awards as shown in the table above. The number of fully vested restricted stock unit awards granted was determined by dividing the portion of each named executive officer’s 20142019 bonus designated for settlement in fully vested restricted stock units by the closing price of our common stock on the day of the grant. An equal number of matching unvested restricted stock unit awards were also granted to each named executive officer. For financial statement reporting purposes the value of these awards is amortized over the shorter of the four-year vesting period or the period between the grant date and the date the award recipient turns 59 ½. Stock Options.Certain of the named executive officers were awarded stock options as shown in the table above. The exercise price of these stock options was equal to the closing price of our common stock on the date of grant. 33 OUTSTANDING EQUITY AWARDS AT FISCAL 20152020 YEAR-END The following table sets forth information regarding each named executive officer’s outstanding equity awards as of January 1, 2016:2021: | | Option Awards | | | Stock Awards | | | Option Awards | | | | | Stock Awards | | Name | | Number of Securities Underlying Unexercised Options (#) Exercisable | | | Number of Securities Underlying Unexercised Options (#) Unexercisable | | | Option Exercise Price ($) | | | Option Expiration Date | | | Number of Shares or Units of Stock That Have Not Vested (#) | | | Market Value of Shares or Units of Stock That Have Not Vested ($) (1) | | | Number of Securities Underlying Unexercised Options (#) Exercisable | | | Number of Securities Underlying Unexercised Options (#) Unexercisable | | | | | | Option Exercise Price ($) | | | Option Expiration Date | | Number of Shares or Units of Stock That Have Not Vested (#) | | | | | | Market Value of Shares or Units of Stock That Have Not Vested ($) (1) | | | | | | | | | | | | | | | | | Dr. Johnston | | | | | | | 24,000 | (2) | | | 44.20 | | | | 02/13/2025 | | | | 8,222 | (6) | | | 410,689 | | | Dr. Corrigan | | | | | | | | 24,000 | | (2 | ) | | | 79.43 | | | 2/13/2030 | | | 6,205 | | (6 | ) | | | 558,636 | | | | | 6,750 | | | | 20,250 | (3) | | | 35.40 | | | | 02/07/2024 | | | | 9,632 | (7) | | | 481,118 | | | | 7,500 | | | | 22,500 | | (3 | ) | | | 54.95 | | | 2/14/2029 | | | 7,018 | | (7 | ) | | | 631,831 | | | | | 16,500 | | | | 16,500 | (4) | | | 25.02 | | | | 02/15/2023 | | | | 12,656 | (8) | | | 632,167 | | | | 14,000 | | | | 14,000 | | (4 | ) | | | 37.45 | | | 2/15/2028 | | | 7,478 | | (8 | ) | | | 673,244 | | | | | 22,500 | | | | 7,500 | (5) | | | 24.14 | | | | 02/09/2022 | | | | 12,498 | (9) | | | 624,275 | | | | 24,000 | | | | 8,000 | | (5 | ) | | | 29.05 | | | 2/16/2027 | | | 7,496 | | (9 | ) | | | 674,865 | | | | | 35,000 | | | | | | | | 18.86 | | | | 02/11/2021 | | | | | | | | | | | | 48,000 | | | | | | | | | | 25.41 | | | 7/29/2026 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Mr. Schlenker | | | | | | | 16,000 | (2) | | | 44.20 | | | | 02/13/2025 | | | | 5,026 | (6) | | | 251,049 | | | | | | | | 16,000 | | (2 | ) | | | 79.43 | | | 2/13/2030 | | | 4,432 | | (6 | ) | | | 399,013 | | | | | 4,500 | | | | 13,500 | (3) | | | 35.40 | | | | 02/07/2024 | | | | 5,886 | (7) | | | 294,006 | | | | 5,000 | | | | 15,000 | | (3 | ) | | | 54.95 | | | 2/14/2029 | | | 4,913 | | (7 | ) | | | 442,317 | | | | | 11,000 | | | | 11,000 | (4) | | | 25.02 | | | | 02/15/2023 | | | | 8,190 | (8) | | | 409,091 | | | | 14,000 | | | | 14,000 | | (4 | ) | | | 37.45 | | | 2/15/2028 | | | 7,478 | | (8 | ) | | | 673,244 | | | | | 15,000 | | | | 5,000 | (5) | | | 24.14 | | | | 02/09/2022 | | | | 8,332 | (9) | | | 416,183 | | | | 24,000 | | | | 8,000 | | (5 | ) | | | 29.05 | | | 2/16/2027 | | | 6,816 | | (9 | ) | | | 613,644 | | | | | 25,000 | | | | | | | | 18.86 | | | | 02/11/2021 | | | | | | | | | | | | 4,230 | | | | | | | | | | 23.63 | | | 2/12/2026 | | | | | | | | | | | | | | 35,000 | | | | | | | | 12.98 | | | | 02/11/2020 | | | | | | | | | | | | 4,524 | | | | | | | | | | 22.10 | | | 2/13/2025 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 5,648 | | | | | | | | | | 17.70 | | | 2/7/2024 | | | | | | | | | | | Dr. Corrigan | | | - | | | | - | | | | - | | | | - | | | | 4,798 | (6) | | | 239,660 | | | | | | | 7,992 | | | | | | | | | | 12.51 | | | 2/15/2023 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Dr. Reitmann | | | | | | | | | | | | | | | | | | | | 3,103 | | (6 | ) | | | 279,363 | | | | | | | | | | | | | | | | | | | | | 5,352 | (7) | | | 267,332 | | | | | | | | | | | | | | | | | | | | 2,983 | | (7 | ) | | | 268,559 | | | | | | | | | | | | | | | | | | | | | 5,584 | (8) | | | 278,921 | | | | | | | | | | | | | | | | | | | | 3,988 | | (8 | ) | | | 359,040 | | | | | | | | | | | | | | | | | | | | | 5,000 | (9) | | | 249,750 | | | | | | | | | | | | | | | | | | | | 5,112 | | (9 | ) | | | 460,233 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Dr. Caligiuri | | | - | | | | - | | | | - | | | | - | | | | 4,798 | (6) | | | 239,660 | | | Dr. James | | | | | | | | | | | | | | | | | | | | 3,103 | | (6 | ) | | | 279,363 | | | | | | | | | | | | | | | | | | | | | 5,352 | (7) | | | 267,332 | | | | | | | | | | | | | | | | | | | | 2,176 | | (7 | ) | | | 195,905 | | | | | | | | | | | | | | | | | | | | | 8,190 | (8) | | | 409,091 | | | | | | | | | | | | | | | | | | | | 2,244 | | (8 | ) | | | 202,027 | | | | | | | | | | | | | | | | | | | | | 8,332 | (9) | | | 416,183 | | | | | | | | | | | | | | | | | | | | 3,748 | | (9 | ) | | | 337,432 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Dr. Boehm | | | - | | | | - | | | | - | | | | - | | | | 5,940 | (6) | | | 296,703 | | | Dr. Murray | | | | | | | | | | | | | | | | | | | | 2,807 | | (6 | ) | | | 252,714 | | | | | | | | | | | | | | | | | | | | | 5,618 | (7) | | | 280,619 | | | | | | | | | | | | | | | | | | | | 4,211 | | (7 | ) | | | 379,116 | | | | | | | | | | | | | | | | | | | | | 8,190 | (8) | | | 409,091 | | | | | | | | | | | | | | | | | | | | 7,478 | | (8 | ) | | | 673,244 | | | | | | | | | | | | | | | | | | | | | 8,750 | (9) | | | 437,063 | | | | | | | | | | | | | | | | | | | | 6,474 | | (9 | ) | | | 582,854 | |
(1) | (1) | Value is determined based on the closing price of our common stock on December 31, 2015January 1, 2021 of $49.95$90.03 per share. |
(2) | (2) | Four-year vesting at a rate of 25% per year, subject to continued employment. Options fully vest on February 13, 2019.2024. |
(3) | (3) | Four-year vesting at a rate of 25% per year, subject to continued employment. Options fully vest on February 7, 2018.14, 2023. |
(4) | (4) | Four-year vesting at a rate of 25% per year, subject to continued employment. Options fully vest on February 15, 2017.2022. |
(5) | (5) | Four-year vesting at a rate of 25% per year, subject to continued employment. Options fully vest on February 9, 2016.16, 2021. |
(6) | (6) | Stock awards cliff vest on March 13, 2019.2024. |
(7) | (7) | Stock awards cliff vest on March 14, 2018. |
| (8) | Stock awards cliff vest on March 15, 2017.2023. |
(8) | (9) | Stock awards cliff vest on March 9, 2016. |
2022. (9) | Stock awards cliff vest on March 10, 2021. |
34
OPTION EXERCISES AND STOCK VESTED IN FISCAL 2015 2020 The following table sets forth information for each named executive officer regarding options exercised and restricted stock units vested during fiscal 2015:2020: | | Option Awards | | | StockAwards | | | Option Awards | | | Stock Awards | | Name | | Number of Shares Acquired on Exercise (#) | | | Value Realized on Exercise ($) | | | Number of Shares Acquired on Vesting (#) | | | Value Realized on Vesting ($) | | | Number of Shares Acquired on Exercise (#) | | | Value Realized on Exercise ($) | | | Number of Shares Acquired on Vesting (#) | | | | Value Realized on Vesting ($) | | | | | | | | | | | | | Dr. Johnston | | | 50,000 | | | | 1,519,703 | | | | 8,222 | (1) | | | 360,000 | | | Dr. Corrigan | | | | | | | | | | | | 6,205 | | (1) | | | 420,016 | | | | | | | | | | | | | 13,899 | (2) | | | 600,506 | | | | | | | | | | | | 8,378 | | (2) | | | 636,644 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Mr. Schlenker | | | 100,000 | | | | 4,004,494 | | | | 5,026 | (1) | | | 220,000 | | | | 181,755 | | | | 12,144,489 | | | | 4,432 | | (1) | | | 300,002 | | | | | | | | | | | | | 8,553 | (2) | | | 369,532 | | | | | | | | | | | | 8,796 | | (2) | | | 668,408 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Dr. Corrigan | | | - | | | | - | | | | 4,798 | (1) | | | 210,000 | | | Dr. Reitman | | | | | | | | | | | | 3,103 | | (1) | | | 210,042 | | | | | | | | | | | | | 6,415 | (2) | | | 277,160 | | | | | | | | | | | | 4,692 | | (2) | | | 356,545 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Dr. Caligiuri | | | - | | | | - | | | | 4,798 | (1) | | | 210,000 | | | Dr. James | | | | | | | | | | | | 3,103 | | (1) | | | 210,042 | | | | | | | | | | | | | 8,019 | (2) | | | 346,461 | | | | | | | | | | | | 4,608 | | (2) | | | 350,162 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Dr. Boehm | | | - | | | | - | | | | 5,940 | (1) | | | 260,000 | | | Dr. Murray | | | | | | | | | | | | 2,807 | | (1) | | | 190,006 | | | | | | | | | | | | | 8,019 | (2) | | | 346,461 | | | | | | | | | | | | 7,540 | | (2) | | | 572,965 | |
(1) | (1) | The amounts shown represent fully vested restricted stock units granted on March 13, 20152020 to settle a portion of each named executive officer's 20142019 bonus. |
(2) | (2) | The amounts shown represent unvested restricted stock unit awards granted on March 11, 20112016 that vested and were settled on March 11, 2015. |
2020.
NONQUALIFIED DEFERRED COMPENSATIONCOMPENSATION IN FISCAL 2015 2020 The following table sets forth information regarding activity in our nonqualified deferred compensation plan for each named executive officer during fiscal 2015:2020: Name | | Executive Contributions in 2015 ($) | | | Registrant Contributions in 2015 ($) (1) | | | Aggregate Earnings in 2015 ($) | | | Aggregate Withdrawals/ Distributions in 2015 ($) | | | Aggregate Balance at 1/1/16 ($) (2) | | | Executive Contributions in 2020 ($) | | | | Registrant Contributions in 2020 ($) (1) | | | Aggregate Earnings in 2020 ($) | | | Aggregate Withdrawals/ Distributions in 2020 ($) | | | Aggregate Balance at January 1, 2021 ($) (2) | | | | | | | | | | | | | | | | | | | | | | | | Dr. Johnston | | | 521,234 | (3) | | | 25,079 | | | | (19,718 | ) | | | - | | | | 1,127,377 | | | | | | | | | | | | | | | | | | | | | | | | | Dr. Corrigan | | | | 50,000 | | (3) | | | 26,775 | | | | 193,625 | | | | - | | | | 1,811,948 | | Mr. Schlenker | | | - | | | | 9,800 | | | | (985 | ) | | | - | | | | 24,265 | | | | - | | | | | 15,050 | | | | 11,752 | | | | - | | | | 126,162 | | | | | | | | | | | | | | | | | | | | | | | | Dr. Corrigan | | | 48,149 | | | | 15,911 | | | | (9,800 | ) | | | - | | | | 813,248 | | | | | | | | | | | | | | | | | | | | | | | | | Dr. Caligiuri | | | 78,751 | (4) | | | 16,800 | | | | 8,473 | | | | - | | | | 793,691 | | | | | | | | | | | | | | | | | | | | | | | | | Dr. Boehm | | | 375,579 | | | | 18,314 | | | | (51,051 | ) | | | (133,643) | (5) | | | 1,662,677 | | | Dr. Reitman | | | | - | | | | | 11,288 | | | | 76,565 | | | | - | | | | 410,407 | | Dr. James | | | | - | | | | | 5,688 | | | | 46,308 | | | | (126,181 | ) | | | 469,068 | | Dr. Murray | | | | - | | | | | 12,250 | | | | 2,608 | | | | - | | | | 57,802 | |
(1) | (1) | The Company provides a defined contribution retirement plan for all of it employees, whereby the Company contributes to each eligible employee’s account 7% of the employee’s eligible base salary plus overtime. These contributions are made to the 401(k) plan up to the statutory maximum. Effective January 1, 2013, anyAny portion of the 7% contribution in excess of the statutory maximum is made to the Company’s nonqualified deferred compensation plan. Amounts represent Company contributions to the nonqualified deferred compensation plan associated with the defined contribution retirement plan. |
(2) | (2) | The aggregate balance at January 1, 20162021 was fully vested for all named executive officers. Each named executive officer who participates in the nonqualified deferred compensation plan chooses from a number of investment vehicles available under the plan. Earnings are credited based on earnings of the investment options selected by the participant. |
(3) | (3) | Amount represents the portion of Dr. Johnston’s 2014 bonus,Corrigan’s 2020 salary, disclosed in the Summary Compensation Table, that the employee elected to contribute to the deferred compensation plan. |
| (4) | Amount represents the portion of Dr. Caligiuri’s 2014 bonus, disclosed in the Summary Compensation Table, that the employee elected to contribute to the deferred compensation plan. |
| (5) | Amount represents a scheduled distribution of amounts previously deferred. |
CEO Pay Ratio Our compensation and benefits philosophy and the overall structure of our compensation and benefit programs are broadly similar across the organization to encourage and reward all employees who contribute to our success. Under rules adopted pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act, we are required to calculate and disclose the total compensation paid to our median paid employee, as well as the ratio of the total compensation paid to the median employee as compared to the total compensation paid to our CEO. Under the relevant rules, we are required to identify the median employee by use of a consistently applied compensation measure. We identified the median employee by looking at annual base pay, overtime pay, cash bonuses, and our company contributions to our defined contribution retirement plans. We did not perform adjustments to the compensation paid to part-time employees to calculate what they would have been paid on a full-time basis. We identified the median employee for our 2019 pay ratio disclosure using our world-wide employee population on January 3, 2020. We used the same median employee for 2020 pay ratio disclosure as there were no changes that would significantly impact this disclosure. For the pay ratio disclosure, we calculated the median employee’s total annual compensation in accordance with the requirements of the Summary Compensation Table. Our median employee compensation as calculated using Summary Compensation Table requirements was $145,857 for 2020. Our CEO’s compensation as reported in the Summary Compensation Table was $2,674,792. Therefore, our CEO to median employee pay ratio is 18:1. This information is being provided for compliance purposes. Neither the Human Resources Committee nor management of the Company used the pay ratio measure in making compensation decisions. 37
EQUITY COMPENSATION PLAN INFORMATIONINFORMATION IN FISCAL 2015 2020 The following table sets forth certain information regarding securities authorized for issuance under the Company’s equity compensation plans during the fiscal year ended January 1, 2016.2021. The equity compensation plans of the Company include the 2008 Equity Incentive Plan and the 2008 Employee Stock Purchase Plan. The 2008 Equity Incentive Plan and the 2008 Employee Stock Purchase Plan were both approved by the Company’s stockholders. The following table summarizes the Company’s equity compensation plans as of January 1, 2016:2021: Plan category | | Number of securities to be issued upon exercise of outstanding options, warrants and rights | | | Weighted-average exercise price of outstanding options, warrants and rights | | | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in the first column) | | | Number of securities to be issued upon exercise of outstanding options, warrants and rights | | | | Weighted-average exercise price of outstanding options, warrants and rights | | | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in the first column) | | | | | | | | | | | | Equity compensation plans approved by security holders | | | 1,828,226 | (1) | | $ | 26.42 | | | | 1,143,355 | (2) | | | 1,836,309 | | (1) | | $ | 37.29 | | | | 2,179,535 | | (2) | | | | | | | | | | | | | | | | | | | | | | | | | | | | Equity compensation plans not approved by security holders | | | - | | | | - | | | | - | | | | — | | | | | — | | | | — | | | Total | | | 1,828,226 | | | $ | 26.42 | | | | 1,143,355 | | | | 1,836,309 | | | | $ | 37.29 | | | | 2,179,535 | | |
(1) | (1) | Includes 1,543,226724,794 shares of common stock issuable to settle unvested restricted stock unit awards. Includes 693,121 shares of common stock issuable to settle fully vested restricted stock unit awards. No weighted average exercise price has been assumed for these shares in the table above. |
(2) | (2) | Includes 66,030362,171 shares which are reserved for issuance under the 2008 Employee Stock Purchase Plan. |
38
REPORT OF THE HUMAN RESOURCES COMMITTEE OF THE BOARD OF DIRECTORS
The following report of the Human Resources Committee of the Board of Directors does not constitute soliciting material and should not be considered filed or incorporated by reference into any other Company filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent the Company specifically incorporates this Report by reference therein.
The Human Resources Committee of the Board of Directors oversees the general compensation policies for all employees and the specific compensation plans for officers of the Company, including the Chief Executive Officer. The Committee is composed of four independent non-employee directors. No executive officers of the Company are included on the Human Resources Committee.
The Committee has reviewed and discussed with management the Compensation Discussion and Analysis, and based on the review and discussion, the Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy statement.
Members of the Human Resources Committee
Debra L. Zumwalt, Chairperson
Karen A. Richardson
Stephen C. Riggins
John B. Shoven, Ph.D.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Indemnification Agreements We are a party to indemnification agreements with our directors and executive officers for the indemnification of and advancement of expenses to these persons to the fullest extent permitted by law. Exponent Engineering In January 2006, we entered into a services agreement with Exponent Engineering, P.C., a California professional corporation that is qualified to do business in the States of New York, Michigan, and North Carolina, in order to facilitate the provision of professional engineering services in these states. Pursuant to the agreement, we provide all professional and administrative services required by Exponent Engineering. In exchange for these services, Exponent Engineering will deliver to us all amounts or other consideration received by Exponent Engineering resulting from the provision of these professional services. The shareholders of Exponent Engineering are executiveRobert Caligiuri, Ph.D., John Osteraas, Ph.D., and Brad James, Ph.D. Drs. Caligiuri, Osteraas, and James are all officers of Exponent. However, none of these executive officers receive any compensation for their participation in Exponent Engineering and have no financial interest in the securities of Exponent Engineering. During fiscal 20152021, we received $7,542,000$8,168,000 of consideration from Exponent Engineering under this services agreement. Audit Committee Approval Procedures The Audit Committee of the Board of Directors is responsible for reviewing and approving all related party transactions in accordance with its charter and based on the facts and circumstances of each particular situation. Related party transactions subject to review and approval of the Audit Committee include, without limitation, those that are required to be disclosed under applicable SEC and NASDAQNasdaq rules. 39 OTHER MATTERS MATTERS The Company knows of no other matters that will be brought before the Annual Meeting. However, if any such matters are properly presented before the Annual Meeting, it is the intention of the persons named in the Notice to vote the shares they represent as the Board of Directors may recommend. It is important that your shares be represented at the Annual Meeting, regardless of the number of shares that you hold. You are therefore urged to vote by phone, vote via the internet or submit your proxy by mail if you elected to receive printed proxy materials at your earliest convenience. Notice Regarding the Internet Availability of Proxy Materials for the 20162021 Annual Meeting. This proxy statement and our 20152020 Annual Report on Form 10-K for the fiscal year ended January 1, 2016, as filed with the SEC, will be available at: www.edocumentview.com/www.envisionreports.com/EXPOon or about April 13, 2016.21, 2021. Stockholder Proposals and Nominations for the 20172022 Annual Meeting.Stockholders are entitled to present proposals for action at a forthcoming meeting if they comply with the requirements of the proxy rules promulgated by the Securities and Exchange Commission and our Bylaws. Stockholder-Initiated Proposals and Nominations for 20172022 Annual Meeting Proposals Submitted under SEC Rules. Stockholder-initiated proposals (other than director nominations) may be eligible for inclusion in our Proxy Statement for next year’s 2017the 2022 Annual Meeting (in accordance with SEC Rule 14a-8) and for consideration at the 20172022 Annual Meeting. Our Secretary must receive a stockholder proposal no later than the close of business on December 14, 201622, 2021 for the proposal to be eligible for inclusion. Any stockholder interested in submitting a proposal or nomination is advised to contact legal counsel familiar with the detailed securities law requirements for submitting proposals or nominations for inclusion in a company’s proxy statement. Proposals should be sent to us at: Exponent, Inc., 149 Commonwealth Drive, Menlo Park, CA 94025, Attention: Corporate Secretary. Proposals and Nominations under Company Bylaws. Stockholders may also submit proposals for consideration, and nominations of director candidates for election, at the 20172022 Annual Meeting by following certain requirements set forth in our Bylaws. The current applicable provisions of our Bylaws are described below. Proposals will not be eligible for inclusion in the 20172022 Proxy Statement unless they are submitted in compliance with then applicable SEC rules as referenced above; however, they will be presented for discussion at our 20172022 Annual Meeting if the requirements established by our Bylaws for stockholder proposals and nominations have been satisfied. For nominations and proposals which are intended to be presented at the 20172022 Annual Meeting but not intended to be included in our 20172022 Proxy Statement, the stockholder must provide the information required by our Bylaws and give timely notice to our Corporate Secretary in accordance with our Bylaws, which, in general, require that the notice be received by our Corporate Secretary: not earlier than the close of business on January 21, 2022; and | · | not earlier than the close of business on January 13, 2017; and |
| · | not later than the close of business on February 12, 2017. |
not later than the close of business on February 20, 2022. For a full description of the requirements for submitting a proposal or nomination, see our Bylaws. Submissions or questions should be sent to us at: Exponent, Inc., 149 Commonwealth Drive, Menlo Park, CA 94025, Attention: Corporate Secretary. 40 Proxy Solicitation Costs.The cost of soliciting proxies will be borne by the Company. The Company may reimburse brokerage firms and other persons representing beneficial owners of shares for their expenses in forwarding solicitation materials to such beneficial owners. Proxies may be solicited by certain Company directors, officers and regular employees, without additional compensation, by personal conversation, telephone, telegram, letter, electronically, or by facsimile. FOR THE BOARD OF DIRECTORS | FOR THE BOARD OF DIRECTORS | | | | | | Richard L. Schlenker, Jr. Richard L. Schlenker,Corporate Secretary |
Menlo Park, California April 13, 201621, 2021
Exponent, Inc. Online Go to www.envisionreports.com/EXPO or scan the QR code — login details are located in the shaded bar below. Stockholder Meeting Notice Important Notice Regarding the Availability of Proxy Materials for the Exponent, Inc. Stockholder Meeting to be Held on June 3, 2021 Under Securities and Exchange Commission rules, you are receiving this notice that the proxy materials for the annual stockholders’ meeting are available on the Internet. Follow the instructions below to view the materials and vote online or request a copy. The items to be voted on and location of the annual meeting are on the reverse side. Your vote is important! This communication presents only an overview of the more complete proxy materials that are available to you on the Internet. We encourage you to access and review all of the important information contained in the proxy materials before voting. The Exponent 2020 Annual Report, Exponent 2021 Notice of Annual Stockholders Meeting and Proxy Statement are available at: http://www.envisionreports.com/EXPO Easy Online Access — View your proxy materials and vote. Step 1: Go to www.envisionreports.com/EXPO. Step 2: Click on Cast Your Vote or Request Materials. Step 3: Follow the instructions on the screen to log in. Step 4: Make your selections as instructed on each screen for your delivery preferences. Step 5: Vote your shares. When you go online, you can also help the environment by consenting to receive electronic delivery of future materials Obtaining a Copy of the Proxy Materials – If you want to receive a copy of the proxy materials, you must request one. There is no charge to you for requesting a copy. Please make your request as instructed on the reverse side on or before May 24, 2021 to facilitate timely delivery. 2NOT
Stockholder Meeting Notice The 2021 Annual Meeting of Stockholders of Exponent, Inc. will be held on June 3, 2021 at 8:00 a.m. PDT, virtually via the internet at www.meetingcenter.io/289121296. To access the virtual meeting, you must have the information that is printed in the shaded bar located on the reverse side of this form. The password for this meeting is EXPO2021. Proposals to be voted on at the meeting are listed below along with the Board of Directors’ recommendations. The Board of Directors recommend a vote FOR all the nominees listed and FOR Proposals 2-3: 1. Election of Directors: 01 George H. Brown 02 Catherine Ford Corrigan, Ph.D 03 Paul R. Johnston, Ph.D. 04 Carol Lindstrom 05 Karen A. Richardson 06 John B. Shoven, Ph.D. 07 Debra L. Zumwalt 2. To ratify the appointment of KPMG LLP, as independent registered public accounting firm for the Company for the fiscal year ending December 31, 2021. 3. To approve, on an advisory basis, the fiscal 2020 compensation of the Company’s named executive officers. PLEASE NOTE – YOU CANNOT VOTE BY RETURNING THIS NOTICE. To vote your shares you must go online or request a paper copy of the proxy materials to receive a proxy card. If you wish to attend and vote at the meeting, please bring this notice with you. Here’s how to order a copy of the proxy materials and select delivery preferences: Current and future delivery requests can be submitted using the options below. If you request an email copy, you will receive an email with a link to the current meeting materials. PLEASE NOTE: You must use the number in the shaded bar on the reverse side when requesting a copy of the proxy materials. Internet – Go to www.envisionreports.com/EXPO. Click Cast Your Vote or Request Materials. Phone – Call us free of charge at 1-866-641-4276. Email – Send an email to investorvote@computershare.com with “Proxy Materials Exponent, Inc.” in the subject line. Include your full name and address, plus the number located in the shaded bar on the reverse side, and state that you want a paper copy of the meeting materials. To facilitate timely delivery, all requests for a paper copy of proxy materials must be received by May 24, 2021.
Exponent, Inc. Your vote matters – here’s how to vote! You may vote online or by phone instead of mailing this card. Online Go to www.envisionreports.com/EXPO or scan the QR code — login details are located in the shaded bar below. Phone Call toll free 1-800-652-VOTE (8683) within the USA, US territories and Canada Save paper, time and money! Sign up for electronic delivery at www.envisionreports.com/EXPO Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas. 2021 Annual Meeting Proxy Card IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE A Proposals — The Board of Directors recommend a vote FOR all the nominees listed and FOR Proposals 2 – 3 1. Election of Directors: For Against Abstain 01 - George H. Brown 02 - Catherine Ford Corrigan, Ph.D 03 - Paul R. Johnston, Ph.D. 04 - Carol Lindstrom 05 - Karen A. Richardson 06 - John B. Shoven, Ph.D 07 - Debra L. Zumwalt 2. To ratify the appointment of KPMG LLP, as independent registered public accounting firm for the Company for the fiscal year ending December 31, 2021. For Against Abstain 3. To approve, on an advisory basis, the fiscal 2020 compensation of the Company’s named executive officers. For Against Abstain B Authorized Signatures — This section must be completed for your vote to count. Please date and sign below Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title. Date (mm/dd/yyyy) — Please print date below. Signature 1 — Please keep signature within the box. Signature 2 — Please keep signature within the box 72BM
The 2021 Annual Meeting of Stockholders of Exponent, Inc. will be held on June 3, 2021 at 8:00 a.m. PDT, virtually via the internet at www.meetingcenter.io/289121296. To access the virtual meeting, you must have the information that is printed in the shaded bar located on the reverse side of this form. The password for this meeting is — EXPO2021. Small steps make an impact. Help the environment by consenting to receive electronic delivery, sign up at www.envisionreports.com/EXPO IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. Notice of 2021 Annual Meeting of Stockholders Proxy Solicited by Board of Directors for Annual Meeting — June 3, 2021 Catherine Ford Corrigan and Richard L. Schlenker, or any of them, each with the power of substitution, are hereby authorized to represent and vote the shares of the undersigned, with all the powers which the undersigned would possess if personally present, at the Annual Meeting of Stockholders of Exponent, Inc. to be held on June 3, 2021 or at any postponement or adjournment thereof. Shares represented by this proxy will be voted by the stockholder. If no such directions are indicated, the Proxies will have authority to vote FOR the election of the Board of Directors and FOR items 2-3. In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting. (Items to be voted appear on reverse side) C Non-Voting Items Change of Address — Please print new address below Comments — Please print your comments below. |