PROPOSAL NO. 4—ADVISORY VOTE ON THE FREQUENCY OF HOLDING THE ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATIONIn accordance with the requirements of Section 14A of the Exchange Act and the related rules of the SEC, at least once every six years beginningthis proposal, commonly known as a “say on pay” proposal, provides the Company’s stockholders with this Annual Meeting, our stockholders are entitledthe opportunity to cast an advisory vote on whether the advisory vote to approvecompensation of the Company’s Named Executive Officer (“NEO”)Officers, as disclosed in this proxy statement pursuant to the SEC’s compensation (i.e.,disclosure rules, including the “say-on-pay” vote) should occur every year, every two years, or every three years. A stockholder may also abstain from votingdiscussion of the Company’s Compensation Discussion and Analysis beginning on page 21 of this proposal.
proxy statement and followed by the compensation tables beginning on page 33 of this proxy statement.The Board, recommends that future say-on-pay votes be conducted every year to enable ouras required under Section 14A of the Exchange Act, is asking the Company’s stockholders to regularly evaluate the Company’s executive compensation program. An annual vote also allows our stockholders to comment incast a more timely fashion on the Company’s annual incentive programs and enhance stockholder engagement on the topic of executive compensation. Accordingly, the Company asks the stockholders tonon-binding, advisory vote “FOR” the following resolution at the Meeting:
resolution:“RESOLVED, that the stockholders of the Company hereby approve, on an advisory basis, that a non-binding, advisory vote to approve the compensation of the NEOsCompany’s Named Executive Officers of the Company, as disclosed pursuant to Section 14AItem 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and any related material contained in this Proxy Statement.”
This advisory vote is intended to give the Company’s stockholders an opportunity to provide an overall assessment of the Exchange Act (“say-on-pay”)compensation of the Company’s Named Executive Officers rather than focus on any specific item of compensation. As described in the Compensation Discussion and Analysis included in this proxy statement, the Company has adopted an executive compensation program that reflects the Company’s philosophy that executive compensation should be held every year.”
Please mark on the Proxy Card your preferencestructured so as to
align each executive’s interests with the
frequencyinterests of
holding “say-on-pay” stockholder advisory votes as every year, every two years, or every three years or mark “abstain.” Note that you are not voting on whether to approve or disapprove the
Board’s recommendation; rather you are being asked to affirmatively select the option of holdingCompany’s stockholders.As an advisory say-on-pay vote, every year, every two years or every three years.
The advisorythe stockholders’ vote on
this proposal is not binding on our Board or the
frequencyCompany, and our Board could, if it concluded it was in the Company’s best interests to do so, choose not to follow or implement the outcome of
holding the
“say-on-pay” vote is non-binding. Althoughadvisory vote.However, the vote is non-binding,Company expects that the Human Capital Committee of our Board and the Compensation Committee will review the voting results on this proposal and give serious consideration to the outcome of such voting. However, because this vote is advisory and not bindingwhen making future executive compensation decisions for the Company’s Named Executive Officers.
Approval, on the Board in any way, the Board may decide that it is in the best interests of our stockholders and the Company to hold an advisory basis, of the compensation of the Company’s Named Executive Officers requires the affirmative vote on executive compensation more or less frequently than the option approved by a majority of our stockholders present in person or by proxyholders of at the Meeting. If no option receivesleast a majority of the votes presentcast at the Annual Meeting in person or by proxyproxy. All duly submitted and unrevoked proxies will be voted for the proposal, except where a contrary vote is indicated or authorization to vote is withheld. Abstentions and broker non-votes will have no effect on the outcome of this proposal.
The board recommends that stockholders vote “FOR” the approval of named executive officer compensation.
ARRAY TECHNOLOGIES | 2023 PROXY STATEMENT | 52 |
Proposal No. 4—Approval of an Amendment to the Company’s Certificate of Incorporation to Allow Exculpation of Officers to the Extent Permitted by Delaware Law
At the Annual Meeting, the stockholders will be asked to approve an amendment (the “Charter Amendment”) to the Company’s Amended and Restated Certificate of Incorporation (the “Charter”) to provide for exculpation of liability for officers of the Company for certain breaches of fiduciary duties, similar to the protections currently available for directors of the Company, as permitted by Delaware law. A copy of the proposed Charter Amendment is attached as Appendix A to this Proxy Statement.
The proposed Charter Amendment would amend Article VII of the Charter to read in its entirety as follows:
“A. To the fullest extent permitted by the DGCL as it now exists or may hereafter be amended, directors and officers (as defined in Section 102(b)(7) of the DGCL) of the Corporation shall have no personal liability to the Corporation or its stockholders for monetary damages for breach of fiduciary duty owed to the Corporation or its stockholders.
B. Neither the amendment nor repeal of this Article VII, nor the adoption of any provision of this Amended and Restated Certificate of Incorporation, nor, to the fullest extent permitted by the DGCL, any modification of law shall eliminate, reduce or otherwise adversely affect any right or protection of a current or former director or officer of the Corporation existing at the time of such amendment, repeal, adoption or modification.”
Effective August 1, 2022, the State of Delaware adopted amendments to Section 102(b)(7) (the “Section 102(b)(7) Amendments”) of the DGCL to allow Delaware corporations to exculpate their officers from personal liability from monetary damages for breach of fiduciary duty as an officer. Prior to the Section 102(b)(7) Amendments, Delaware law permitted Delaware corporations to exculpate directors from personal liability for monetary damages associated with breaches of the duty of care, but that protection did not extend to a Delaware corporation’s officers. Consequently, stockholder plaintiffs have employed a tactic of bringing certain claims that would otherwise be exculpated if brought against directors, against individual officers to avoid dismissal of such claims. The Section 102(b)(7) Amendments were adopted to address inconsistent treatment between officers and directors and address rising litigation and insurance costs for stockholders. Our Board desires to amend the Charter to maintain provisions consistent with the Section 102(b)(7) Amendments and believes the Charter Amendment, by adding the authorized liability protection for certain officers, consistent with the protection currently afforded to our directors in the Charter, is necessary in order to continue to attract and retain experienced and qualified officers. The Charter Amendment would allow for the exculpation of certain officers only in connection with direct claims brought by stockholders, including class actions, but would not eliminate officers’ monetary liability for breach of fiduciary duty claims brought
The board recommends that stockholders vote “FOR” the approval of the Charter Amendment.
ARRAY TECHNOLOGIES | 2023 PROXY STATEMENT | 53 |
by the Company itself or for derivative claims brought by stockholders in the name of the Company. As is currently the case with directors under our Charter, the Charter Amendment would not limit the liability of officers for: any breach of the duty of loyalty to the Company or its stockholders, any acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of the law, and any transaction from which the officer derived an improper personal benefit.
If the Charter Amendment is approved by the stockholders at the Annual Meeting, it will become effective upon the option receivingfiling of the greatest numberCharter Amendment with the Secretary of votes willState of the State of Delaware. In accordance with the DGCL, however, our Board may elect to abandon the Charter Amendment without further action by the stockholders at any time prior to the effectiveness of the filing of the Charter Amendment with the Secretary of State of the State of Delaware, notwithstanding stockholder approval of the Charter Amendment.
On March 23, 2023, our Board authorized and approved the Charter Amendment and directed that the Charter Amendment be considered the frequency recommended by the Company’s stockholders.