DEF: Xerox Seeks Shareholder Approval for Equity Incentive Plan Amendment

Xerox is asking shareholders to approve an amendment to its 2024 Equity and Performance Incentive Plan to increase the share reserve and remove references to incentive stock options.

Summary

• Xerox is seeking shareholder approval for an amendment to its 2024 Equity and Performance Incentive Plan.
• The amendment aims to increase the number of shares available for issuance by 6,682,000, bringing the total to 11,882,000.
• The proposal also seeks to remove references to incentive stock options from the plan.
• Shareholder approval is required to comply with Nasdaq rules and the terms of the plan.
• The Board believes the amendment is crucial for attracting, retaining, and motivating key employees and non-employee directors.
• The plan includes provisions such as a fixed share allocation, prohibition on repricing options, double-trigger change in control vesting, and clawback provisions.
• If the amendment is approved, the maximum aggregate number of shares that may be issued under the Plan will be 11,882,000 Shares plus any Shares underlying awards granted under the Xerox Holdings Corporation Performance Incentive Plan Amended as of May 25, 2023, the Xerox Holdings Corporation 2004 Equity Compensation Plan for Non-Employee Directors, and their predecessor Plans (together, the Predecessor Plans) that expire or are cancelled or forfeited or cash-settled on or after May 22, 2024 plus any Shares that are issued by the Company and any awards that are granted by or become obligations of the Company through the assumption of, or in substitution for, outstanding awards previously granted by an acquired company.
• As of March 31, 2025, there were approximately 5,951 employees and non-employee directors eligible to receive awards under the Plan.

Sentiment

Score: 7

Explanation: The document is a standard proxy statement item, indicating a neutral to slightly positive sentiment as it supports long-term employee incentives.

Positives

• The amendment is expected to help attract, retain, and motivate key employees and non-employee directors.
• The plan includes several corporate governance best practices.
• The plan is designed to align the interests of management and non-employee directors with those of shareholders.

Risks

• If the proposal is not approved, the Company may be unable to attract and retain talent, which is vital to the success of its Reinvention.

Future Outlook

The future success of the Company will depend, in large measure, on its ability to attract, retain, and motivate executives and non-employee directors with superior talents, and align their interests with the interests of shareholders.

Management Comments

• The Board of Directors believes that the future success of the Company will depend, in large measure, on its ability to attract, retain, and motivate executives and non-employee directors with superior talents, and align their interests with the interests of shareholders.

Industry Context

Equity incentive plans are a common tool used by public companies to attract, retain, and motivate employees and align their interests with those of shareholders.

Comparison to Industry Standards

• The plan includes several corporate governance best practices, such as a fixed share allocation, prohibition on repricing options, double-trigger change in control vesting, and clawback provisions, which are consistent with industry standards.
• The burn rate of 2.6% is within a reasonable range compared to other companies in the technology sector.

Stakeholder Impact

• Approval of the amendment is expected to benefit shareholders by aligning the interests of management and non-employee directors with those of shareholders.
• Employees and non-employee directors are expected to benefit from the increased availability of equity awards.

Next Steps

• Shareholders will vote on the proposed amendment at the Annual Meeting on May 21, 2025.
• If approved, the amendment will become effective on May 21, 2025.

Key Dates

Keywords

equity incentive plan, share reserve, stock options, compensation, directors, employees, shareholders, awards, incentives, Xerox