AXON ENTERPRISE, INC. 17800 North 85Th Street Scottsdale, Arizona 85255
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AXON ENTERPRISE, INC. 17800 North 85th Street Scottsdale, Arizona 85255 NOTICE OF ANNUAL MEETING OF SHAREHOLDERS May 31, 2019 To Our Shareholders: The 2019 Annual Meeting of Shareholders (the “Annual Meeting”) of Axon Enterprise, Inc. (the “Company” or “Axon”) will be held at 10:00 a.m. (local time) on Friday, May 31, 2019, at the Company's headquarters located at 17800 North 85th Street, Scottsdale, AZ 85255 for the following purposes: 1. Electing the two Class A directors of the Company named in this proxy statement for a term of three years, and until their successors are elected and qualified; 2. Advisory vote to approve the compensation of the Company's named executive officers; 3. Ratifying the appointment of Grant Thornton LLP as the Company’s independent registered public accounting firm for fiscal year 2019; 4. To approve an amendment to the Company's Certificate of Incorporation to declassify the Board of Directors; 5. Shareholder proposal that the Board of Directors take the necessary steps to remove the super-majority vote requirement to approve amendments to the Company's Charter and Bylaws, and to replace with a simple majority vote requirement; and 6. Transacting such other business as may properly come before the Annual Meeting or any continuation, postponement or adjournment thereof. Only holders of the Company’s common stock at the close of business on April 10, 2019 are entitled to notice of, and to vote at, the Annual Meeting and any adjournments or postponements thereof. Shareholders may vote in person or by proxy. A list of shareholders entitled to vote at the Annual Meeting will be available for examination by shareholders at the time and place of the Annual Meeting and during ordinary business hours, for a period of ten days prior to the Annual Meeting, at the principal executive offices of the Company at the address listed above. Your vote is very important. Whether or not you plan to attend the Annual Meeting, we encourage you to read the proxy statement and vote as soon as possible. For specific instruction on how to vote your shares, please refer to the section entitled “General Information about the Annual Meeting of Shareholders” and the instructions on your proxy card or the voting instruction card you receive from your broker, bank or other intermediary. Please note that if you hold shares in different accounts, it is important that you vote the shares represented by each account. By Order of the Board of Directors, /s/ DOUGLAS E. KLINT Douglas E. Klint Corporate Secretary Scottsdale, Arizona April 16, 2019 YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING IN PERSON, PLEASE VOTE ON THE INTERNET, BY TELEPHONE, OR MARK, SIGN, DATE AND PROMPTLY RETURN YOUR PROXY OR VOTING INSTRUCTION CARD IN THE ENCLOSED ENVELOPE. TABLE OF CONTENTS General Information About the Meeting 1 Governance 6 The Board of Directors 6 Board and Committee Governance 11 Director Compensation 15 Certain Relationships and Related Transactions 16 Share Ownership 18 Ownership of Equity Securities of the Company 18 Section 16(a) Beneficial Ownership Reporting Compliance 19 Executive Compensation 19 Executive Officers 19 Compensation Discussion and Analysis 21 Summary Compensation Table 33 Pay Ratio of Chief Executive Officer Compensation to Median Employee Compensation 34 2018 Grants of Plan-Based Awards 35 Audit Matters 40 Report of the Audit Committee 40 Proposals 42 Proposal No. 1 - Election of Directors 42 Proposal No. 2 - Advisory Approval of the Company's Executive Compensation 44 Proposal No. 3 - Ratification of Appointment of Independent Registered Public Accounting Firm 46 Proposal No. 4 - Amendment of Company's Certificate of Incorporation to Declassify our Board 48 of Directors Proposal No. 5 - Shareholder Proposal 50 Other Matters 52 Annex A - Marked Copy of Form of Amended and Restated Certificate of Incorporation A - 1 AXON ENTERPRISE, INC. 17800 North 85th Street Scottsdale, Arizona 85255 PROXY STATEMENT FOR 2019 ANNUAL MEETING OF SHAREHOLDERS GENERAL INFORMATION ABOUT THE ANNUAL MEETING AND VOTING Why am I receiving these proxy materials? Our Board of Directors (the “Board” or “Board of Directors”) has made these materials available to you on the Internet or has delivered printed versions of these materials to you by mail in connection with the Board of Directors’ solicitation of proxies for use at the Annual Meeting, which will take place at 10:00 a.m. local time on Friday, May 31, 2019 at the Company's headquarters located at 17800 North 85th Street, Scottsdale, AZ 85255. This proxy statement describes matters on which you, as a shareholder, are entitled to vote. It also gives you information on these matters so that you can make an informed decision. This proxy statement is first being made available or sent to shareholders on or about April 16, 2019. What is included in these materials? These materials include: • This proxy statement for the Annual Meeting; and • The Company’s Annual Report on Form 10-K for the year ended December 31, 2018 (the “Annual Report”). If you received printed versions of these materials by mail, these materials also include the proxy card or vote instruction form for the Annual Meeting. Why did I receive a one-page notice in the mail regarding the Internet availability of proxy materials instead of printed proxy materials? In accordance with the rules of the Securities and Exchange Commission (“SEC”), instead of mailing a printed copy of our proxy materials to all of our shareholders, we have elected to furnish such materials to shareholders by providing access to these documents over the Internet. Accordingly, on April 16, 2019 we sent a Notice of Internet Availability of Proxy Materials (the “Notice”) to shareholders of record and beneficial owners. Shareholders have the ability to access the proxy materials on a website referred to in the Notice or request to receive a printed or electronic set of the proxy materials by following the directions found in the Notice. The Company encourages you to take advantage of the availability of the proxy materials on the Internet in order to help reduce the cost and environmental impact of the Annual Meeting. Axon Enterprise, Inc. | 2019 Proxy Statement | 1 How can I get electronic access to the proxy materials? The Notice provides you with instructions regarding how to: (1) view our proxy materials for the Annual Meeting on the Internet; (2) vote your shares after you have viewed our proxy materials; (3) request a printed or electronic copy of the proxy materials; and (4) instruct us to send our future proxy materials to you electronically by mail or by email. Copies of the proxy materials are also available for viewing at the investor relations page of the Company’s website at http://investor.axon.com. What proposals will be voted on at the Annual Meeting and how does the Board of Directors recommend I vote? Shareholders will vote on the following items at the Annual Meeting: Proposal Description Board Recommendation No. 1 The election of the two Class A directors of the Company named in this FOR proxy statement for a term of three years, and until their successors are (all nominees) elected and qualified No. 2 Advisory vote to approve the compensation of the Company's named FOR executive officers No. 3 Ratification of the appointment of Grant Thornton LLP as the Company’s FOR independent registered public accounting firm for fiscal year 2019 No. 4 Amendment of the Company's Certificate of Incorporation to declassify FOR the Board of Directors No. 5 Shareholder proposal that the Board take the necessary steps to remove NO the super-majority vote requirement to approve amendments to the RECOMMENDATION Company's charter and bylaws, and to replace with a simple majority vote requirement Shareholders will also vote on the transaction of any other business as may properly come before the Annual Meeting or any continuation, postponement or adjournment thereof. To the maximum extent allowed by the SEC’s proxy rules, the proxy holders will vote your shares in such other matters as they determine in their discretion. Where are the Company’s principal executive offices located and what is the Company’s main telephone number? The Company’s principal executive offices are located at 17800 North 85th Street, Scottsdale, Arizona 85255. The Company’s main telephone number is (800) 978-2737. Who may vote at the Annual Meeting? As of April 10, 2019 (the “Record Date”), there were 59,116,783 shares of the Company’s common stock outstanding. Each share of common stock entitles the holder to one vote on each matter that may properly come before the Annual Meeting. The holders of a majority of the voting power of all shares entitled to vote, present in person or represented by proxy, will constitute a quorum for the transaction of business at the Annual Meeting. Shareholders are not entitled to cumulative voting in the election of directors. Only shareholders as of the close of business on the Record Date are entitled to receive notice of, to attend, and to vote at the Annual Meeting. What is the difference between a shareholder of record and a beneficial owner of shares held in street name? Shareholder of Record If your shares are registered directly in your name with the Company’s transfer agent, Broadridge Corporate Issuer Solutions, Inc., you are considered the shareholder of record with respect to those shares, and the Notice or printed materials were sent directly to you by the Company. If you request printed copies of the proxy materials by mail, you will also receive a printed proxy card. Axon Enterprise, Inc. | 2019 Proxy Statement | 2 Beneficial Owner of Shares Held in Street Name If your shares are held in an account at a brokerage firm, bank, broker-dealer, or other similar organization, then you are the beneficial owner of shares held in “street name,” and the Notice or the printed proxy materials were forwarded to you by that organization.