DEF 14A of Axon Enterprise, Inc., Mar 29, 2024

DEF 14A of Axon Enterprise, Inc.

Filed Mar 29, 2024 · FY20230001558370-24-004374

Open on EDGAR

  1. CORPORATE GOVERNANCE HIGHLIGHTS

    CORPORATE GOVERNANCE HIGHLIGHTS

  2. CORPORATE GOVERNANCE HIGHLIGHTS

    | Board | Governance Oversight | Shareholder Rights & Engagement | | ● Independent board leadership ● Majority independent board ● Multi-faceted, diverse directors ● Regular board refreshment—three new directors added since 2023 ● Average director age: 57 ● Average director tenure: 10 years | ● One share, one vote equity structure ● Annual director elections ● Majority vote standard ● NEW: Public board service limits ● NEW: Director tenure and term limits | ● Ability for shareholders to call a special meeting ● Ability for shareholders to act by written consent ● Regular shareholder engagement with our investors to understand their views and seek feedback ● NEW: Adopted “proxy access” bylaw provision | | Governance Structures Unique to Axon’s Business | | | | Standing Board Committees | | Advisory Boards | | ● Audit Committee ● Compensation Committee ● Nominating and Corporate Governance Committee, including oversight of Environmental, Social and Governance (“ESG”) and sustainability-related risks ● Enterprise Risk and Compliance Committee, including oversight of cybersecurity risk in consultation with our Audit Committee ● Mergers and Acquisitions and Capital Structure Committee ● Scientific and Medical Committee(1) | | ● Scientific and Medical Advisory Board (“SMAB”) composed of experts from several fields who help to ensure our Board is aware of evolving technology, practices and regulations material to our TASER devices so that the Board can appropriately oversee Axon’s strategy ● Ethics & Equity Advisory Council composed of community leaders and community-focused academics who provide our Board with insight into responsible development and deployment of new technology with both law enforcement and communities |

  3. CORPORATE GOVERNANCE HIGHLIGHTS

    (1) This chart presents the committees of our Board of Directors up until the 2024 Annual Meeting. As discussed in further detail below, after the 2024 Annual Meeting, the responsibilities of the Scientific and Medical Committee will move to the purview of the full Board.

  4. Election of Directors

    Election of Directors For Proposal No. 1, under our Bylaws, assuming the existence of a quorum at the Annual Meeting, each director will be elected by the affirmative vote of a majority of the votes properly cast for and against such nominee’s election. Abstentions and broker non-votes will have no impact on the outcome of this proposal if a quorum is present.

  5. Board Refreshment; Tenure and Term Limits

    Board Refreshment; Tenure and Term Limits The Board values the contributions of both newer perspectives as well as directors who have developed, over a period of time, an increased understanding of, and insight into, the governance and business of the Company and the issues confronting it. In 2023, three directors joined the Company’s Board of Directors. To further our commitment to ensuring meaningful Board refreshment, in 2023, the Board updated its Corporate Governance Guidelines to implement formal term limits for directors in order to ensure alignment of director qualifications, attributes, skills and experience with the Company’s evolving strategy. Each non-executive director of the Company must submit a letter of resignation to the chair of the NCG Committee upon reaching 20 continuous years of service as a director of the Company or age 72, whichever occurs first, and each year thereafter, which letter of resignation may be accepted or rejected by the Board in its sole discretion. Pursuant to this term limit policy, Dr. Mark Kroll, who has served on the Board since 2003, provided his offer to resign from the Board, subject to Board acceptance. After considering the mix of newer and tenured directors and the Company’s progress on various strategic matters, the NCG Committee recommended to the Board that it accept Dr. Kroll’s offer to resign, which the Board approved on March 4, 2024, effective as of the date of the Annual Meeting. The Board greatly appreciates Dr. Kroll’s deep commitment, leadership and many contributions to the Board and to the Company’s growth and progress during his years of service. In addition, pursuant to the Company’s term limit policy, Michael Garnreiter, in anticipation of his 72nd birthday, provided his offer to resign from the Board, subject to Board acceptance. After considering Mr. Garnreiter’s leadership roles as Chair of the Board and Audit Committee Chair, as well as the transition from Grant Thornton LLP to PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for fiscal year 2024, the NCG Committee recommended to the Board that it decline Mr. Garnreiter’s offer to resign to provide additional time to plan for his succession. On March 4, 2024, the Board determined to follow the NCG Committee’s recommendation and appointed Graham Smith as Audit Committee Chair to begin a smooth transition.

  6. Director Nominees in 2024

    Director Nominees in 2024

  7. Erika Ayers Badan

    Erika Ayers Badan Director since 2023 Age: 48 Board Committee: NCG Committee Other Public Companies Boards: None Ms. Ayers was named Barstool Sports’ first Chief Executive Officer (“CEO”) in 2016 and, during her tenure through January 2024, it experienced tremendous brand and business growth as one of the fastest-growing digital innovation, sports, entertainment and lifestyle media brands on the Internet. Prior to joining Barstool Sports, Ms. Ayers held various executive roles at media platforms such as Microsoft Corporation, AOL, Leaf Group (formerly Demand Media, Inc.) and Yahoo! Inc. She has extensive experience in transforming start-up organizations into multi-industry operations. She was also part of two early stage start-ups in the fashion and music industry and sits on the advisory boards of the Premier Lacrosse League and Food52. Ms. Ayers previously served on the board of directors of World Wrestling Entertainment, Inc. from October 2020 to September 2022. Ms. Ayers holds a B.S. in Sociology and Psychology from Colby College. Specific Qualifications, Attributes, Skills and Experience:

  8. Erika Ayers Badan

    | Technology Expertise | Experience as an executive of media platform companies provides Ms. Ayers with valuable insight into communication expertise, Internet-related business development demands and brand building. | | Risk Oversight & Management; Public Company Board Experience/ Corporate Governance | Experience as an advisor to multiple companies and as a board member of World Wrestling Entertainment, Inc. from October 2020 to September 2022 provides insight into public company corporate governance matters. |

  9. Adriane Brown

    Adriane Brown Director since 2020 Age: 65 Board Committees: Compensation Committee, NCG Committee (Chair) and Enterprise Risk and Compliance Committee Other Public Company Boards: American Airlines Group Inc., eBay Inc. and KKR & Co Inc. Ms. Brown has been a Managing Partner at Flying Fish Partners, a technology focused venture capital firm, since 2021 and joined as a Venture Partner in 2018. Prior to that, Ms. Brown served as President and Chief Operating Officer for Intellectual Ventures (“IV”), an invention and investment company that commercializes inventions, from January 2010 through July 2017, and served as a Senior Advisor until December 2018. Before joining IV, Ms. Brown served as President and CEO of Honeywell Transportation Systems (“Honeywell”) from January 2005 to June 2009. Over the course of 10 years at Honeywell, she held leadership positions serving the aerospace and automotive markets globally. Prior to Honeywell, Ms. Brown spent 19 years at Corning, Inc., ultimately serving as Vice President and General Manager, Environmental Products Division, having started her career there as a shift supervisor. Ms. Brown serves on the boards of directors of American Airlines Group Inc., eBay Inc. and KKR & Co Inc. Ms. Brown also serves on the board of directors of the International Women’s Forum. Previously, she served on the boards of directors of Allergan plc and Raytheon Company until 2020, respectively, and Harman International Industries until 2017. Ms. Brown holds an Honorary Doctorate of Humane Letters and a B.A. in environmental health from Old Dominion University and is a winner of its Distinguished Alumni Award. She also holds a M.A. in Management from the Massachusetts Institute of Technology where she was a Sloan Fellow.

  10. Adriane Brown

    | Technology Expertise | Ms. Brown is a Managing Partner and member of the Investment Committee at Flying Fish Partners. The fund invests in and supports start-ups utilizing artificial intelligence and machine learning to transform processes in a variety of market verticals. Over the course of her career, Ms. Brown has engaged in business and technology transformations across a number of businesses and markets. | | Risk Oversight & Management; Public Company Board Experience/ Corporate Governance | Board experience from Allergan plc, American Airlines Group Inc., eBay Inc., KKR & Co Inc., Harman International Industries and Raytheon Company provides extensive insight into public company corporate governance matters. |

  11. Julie A. Cullivan

    Julie A. Cullivan Director since 2017 Age: 57 Board Committees: Audit Committee, NCG Committee and Enterprise Risk and Compliance Committee (Chair) Other Public Company Boards: Astra Space Inc. Most recently, Ms. Cullivan was the Chief Technology and People Officer at Forescout Technologies, Inc. (“Forescout”), reporting to the CEO, where she was responsible for leading the company’s business model transformation, information technology strategy, security risk and compliance program, customer production operations and human resources. She joined in July 2017 and helped Forescout scale from a private company with $160 million in revenue, through its successful initial public offering, to a publicly traded company with revenues of $330 million and a $1.5 billion valuation. In addition to focusing on scale, Ms. Cullivan led Forescout’s operational transformation from an appliance and license software business to a cloud subscription business. Forescout was acquired by Advent International, a private equity firm, in 2020 and Ms. Cullivan left in January 2021. Prior to Forescout, Ms. Cullivan was an Executive Vice President of Business Operations and Chief Information Officer at FireEye Inc. and a Senior Vice President at McAfee Corp. Additionally, Ms. Cullivan held executive roles at Autodesk, Inc., EMC Corporation and Oracle Corporation. Ms. Cullivan has served on the board of directors of Astra Space Inc. since 2023. Ms. Cullivan holds a B.S. in Finance from Santa Clara University.

  12. Julie A. Cullivan

    | Technology Expertise; Cybersecurity Experience; Human Capital Management | Ms. Cullivan is a recognized leader in the cybersecurity field and a sought-after speaker on topics including women in security, security as a boardroom imperative, innovation and building high impact teams. | | Risk Oversight & Management; Public Company Board Experience/ Corporate Governance | Experience as Chief Technology and People Officer, and Executive Vice President of Business Operations and Chief Information Officer, leading cross functional initiatives and information security strategy in a high-growth environment, provides experience in risk management. |

  13. Michael Garnreiter, Chair

    Michael Garnreiter, Chair Director since 2006 Age: 71 Board Committees: Audit Committee, Compensation Committee and NCG Committee Other Public Company Boards: Knight-Swift Transportation Holdings Inc. and Amtech Systems, Inc. Mr. Garnreiter most recently served as Vice President of Finance and Treasurer of Shamrock Foods, a privately held manufacturer and distributor of foods and food-related products. He retired from this position in December 2015. From January 2010 until August 2012, Mr. Garnreiter was a managing director of Fenix Financial Forensics, a Phoenix-based litigation and financial consulting firm. From August 2006 through December 2009, Mr. Garnreiter served as managing member of Rising Sun Restaurant Group, LLC, a private restaurant operating company. From April 2002 through June 2006, Mr. Garnreiter was Executive Vice President, Treasurer and Chief Financial Officer of the Main Street Restaurant Group. Mr. Garnreiter previously served with the international accounting firm, Arthur Andersen, from 1974 through March 2002 with increasing levels of responsibility, culminating as a partner. Additionally, Mr. Garnreiter has served on the board of Knight-Swift Transportation Holdings Inc. since 2003 and has also served on the board of Amtech Systems, Inc. since 2007. Mr. Garnreiter holds a B.S. in Accounting from California State University at Long Beach and is a Certified Public Accountant. Specific Qualifications, Attributes, Skills and Experience:

  14. Michael Garnreiter, Chair

    | Accounting/ Auditing Experience | As a Certified Public Accountant and former partner at Arthur Andersen, Mr. Garnreiter has served on the audit committee of each board of directors on which he has served in the past and has extensive knowledge of SEC rules and regulations. | | Risk Oversight & Management; Public Company Board Experience/ Corporate Governance | Board experience from Knight-Swift Transportation Holdings Inc. and Amtech Systems, Inc. provides extensive insight into public company corporate governance matters. |

  15. Caitlin Kalinowski

    Caitlin Kalinowski Director since 2019 Age: 43 Board Committees: Audit Committee and Mergers and Acquisitions and Capital Structure Committee Other Public Company Boards: None Ms. Kalinowski leads the AR Glasses Hardware team for the Reality Labs Division at Meta. Previously, she led VR Hardware, the division responsible for the Meta Quest 2 and Touch controllers, and the Oculus Rift, Go and Rift S. Before working at Meta, Ms. Kalinowski was a Product Design Engineer at Apple where she was a technical lead on the Mac Pro and MacBook Air products and was part of the original unibody MacBook Pro team. Ms. Kalinowski is also on the strategic board of Lesbians Who Tech & Allies, the largest LGBTQ technical organization in the world. Ms. Kalinowski holds a B.S. in Mechanical Engineering from Stanford University.

  16. Caitlin Kalinowski

    | Technology Expertise | Ms. Kalinowski has extensive experience in established technology organizations such as Meta and Apple. Ms. Kalinowski led technical teams at Apple and currently leads the AR Glasses Hardware team at Meta. She has tremendous insight into product design and engineering for technology focused initiatives. |

  17. Matthew R. McBrady, Ph.D

    Matthew R. McBrady, Ph.D Director since 2016 Age: 53 Board Committees: Enterprise Risk and Compliance Committee, Mergers and Acquisitions and Capital Structure Committee (Chair) and Scientific and Medical Committee Other Public Company Boards: None From August 1998 through January 2000, Dr. McBrady served as an international economist with President Clinton’s Council of Economic Advisers and the U.S. Treasury Department. From 2002 to 2006, Dr. McBrady served as a Professor of Finance at the Wharton School of Business at the University of Pennsylvania (from September 2002 through May 2003) and at the Darden Graduate School of Business Administration at the University of Virginia (from May 2003 through December 2006). After leaving academia, Dr. McBrady joined the North American Private Equity group at Bain Capital, LLC where he worked as an investment professional from January 2007 through January 2009 prior to joining Silver Creek Capital Management, LLC as Managing Director and Head of Investment Strategy and Risk Management. In January 2014, Dr. McBrady joined BlackRock, Inc., where he served as Managing Director and Chief Investment Officer of Multi-Strategy Hedge Funds from January 2014 through September 2016. Dr. McBrady served as the Managing Director of Investments at the Cystic Fibrosis Foundation from September 2017 to January 2019 and a Senior Advisor and co-Chief Investment Officer of Callaway Capital from January 2017 to December 2019. Dr. McBrady returned to the Darden Graduate School of Business Administration as a Professor of Finance Practice in August 2022, where he teaches classes in Corporate Financial Strategy and Impact and ESG Investing. In addition to his work in the private sector and academia, Dr. McBrady currently serves as an advisor to a number of impact investing funds and as the Chairman of the Investment Committee for Global Partnerships, a non-profit impact investor that has deployed nearly $500 million in concessionary loans to improve the lives of people living at the bottom of the pyramid in Central and South America and Africa. Dr. McBrady holds a B.A. in Economics from Harvard University, a M.Sc. in International Economics from Oxford University (U.K.) and a Ph.D. in Business Economics from Harvard University. Dr. McBrady previously served as a director for the Company from January 2001 through June 2014. Specific Qualifications, Attributes, Skills and Experience:

  18. Matthew R. McBrady, Ph.D

    | Governmental Experience | Service as a member of President Clinton’s Council of Economic Advisors provides deep insight into government processes. | | Risk Oversight & Management | Teaching positions at the Harvard Business School, the Wharton School of Business and the Darden Graduate School of Business Administration provide valuable financial knowledge and context. Service as Chief Investment Officer for BlackRock and investment strategy and management positions for other investment management firms provide experience in risk management. |

  19. Hadi Partovi

    Hadi Partovi Director since 2010 Age: 51 Board Committees: Compensation Committee (Chair) and Mergers and Acquisitions and Capital Structure Committee Mr. Partovi is the CEO and co-founder of the non-profit education organization Code.org and has served as a director on the board of MNTN, Inc., a private company, since 2023. Mr. Partovi is a past or present strategic advisor or early investor at numerous technology companies, including Facebook, Dropbox, Uber, Airbnb, SpaceX and Zappos. From 2009 through 2010, Mr. Partovi was Senior Vice President of Technology for MySpace (via acquisition) and, from 2006 through 2009, he was President and co-founder of iLike, Inc., which was acquired by MySpace in 2009. From 2002 through 2005, Mr. Partovi was General Manager, Microsoft MSN Entertainment and MSN.com and, from 1999 through 2001, he was Co-Founder and Vice President of Product and Professional Services for Tellme Networks, Inc. From 1994 through 1999, he was Program Manager for Microsoft Internet Explorer. Mr. Partovi holds a B.A. and a M.S. in Computer Science, summa cum laude, from Harvard University.

  20. Hadi Partovi

    | Technology Expertise | Experience as an executive, entrepreneur, investor and advisor across a variety of successful technology companies provides Mr. Partovi with invaluable insight into software and Internet-related business development initiatives. | | Risk Oversight & Management | Background as an advisor to multiple start-up companies provides Mr. Partovi experience in the unique challenges facing companies pursuing new technology. |

  21. Graham Smith

    Graham Smith Director since 2023 Age: 64 Board Committees: Audit Committee (Chair), Compensation Committee and Mergers and Acquisitions and Capital Structure Committee Other Public Company Boards: Splunk Inc. and Procore Technologies, Inc. Mr. Smith has served as chair of the board of directors of Splunk Inc. since March 2019, and as a member of its board of directors since 2011. He also served as the interim CEO of Splunk Inc. from November 2021 to April 2022. Mr. Smith has also served on the board of directors of Procore Technologies, Inc., a provider of cloud-based construction management software, since 2020. In addition, Mr. Smith has served on the board of directors of Talkdesk, Inc., a global cloud contact center, since 2023. Mr. Smith served in various leadership positions at salesforce.com, inc. (“Salesforce”), a provider of enterprise cloud computing software, from 2007 to 2015, including as Chief Financial Officer and most recently as Executive Vice President. Prior to joining Salesforce, Mr. Smith served as Chief Financial Officer at Advent Software Inc., a portfolio accounting software company, from 2003 to 2007. Mr. Smith previously served on the board of directors of BlackLine, Inc., a provider of cloud-based solutions for finance and accounting, from 2015 to 2022; Citrix Systems, Inc., an enterprise software company, from 2015 to 2018; MINDBODY, Inc., a cloud-based wellness services marketplace (acquired by Vista Equity Partners), from 2015 to 2019; Xero Limited, an online accounting software company, from 2015 to 2020; Slack Technologies, Inc., a provider of cloud-based professional collaboration tools, from 2018 to 2021; and Elliott Opportunity II Corp., a special purchase acquisition company, from June to December 2021. Mr. Smith holds a B.Sc. from Bristol University in England and qualified as a chartered accountant in England and Wales.

  22. Graham Smith

    | Accounting/ Auditing Experience | As an international chartered accountant, Mr. Smith has served as Chief Financial Officer of multiple publicly traded companies. | | Technology Expertise | Experience as an executive of multiple technology companies, including progressive leadership positions at Salesforce, provides expertise in technology company operations. | | Risk Oversight & Management; Public Company Board Experience/ Corporate Governance | Board experience for Splunk Inc. and Procore Technologies, Inc., as well as BlackLine, Inc., Citrix Systems, Inc., MINDBODY, Inc., Slack Technologies, Inc. and Xero Limited, provides extensive insights into public company corporate governance matters. |

  23. Patrick W. Smith, CEO

    Patrick W. Smith, CEO Director since 1993 Age: 53 Board Committees: None Other Public Company Boards: None Mr. Smith has served as CEO and as a director of the Company since 1993. He is also co-founder of the Company. After graduating from Harvard University, cum laude, in just three years (class of 1991), Mr. Smith entered directly into the M.B.A. program at the University of Chicago. In two years, he completed both a master’s degree in international finance from the University of Leuven in Leuven, Belgium and an M.B.A. with honors at the University of Chicago, graduating in the top 5% of his class. After completing graduate school in the summer of 1993, he co-founded Axon Enterprise, Inc. (F.K.A. TASER International, Inc.) in September 1993 with his brother, Thomas P. Smith. Among other qualifications, Mr. Smith is the visionary of the Company and brings to the Board extensive executive leadership experience in the technology industry, including the management of worldwide operations, sales, service and support as well as technology innovation as he currently holds 53 U.S. patents. Specific Qualifications, Attributes, Skills and Experience:

  24. Patrick W. Smith, CEO

    | Technology Expertise | Mr. Smith is highly skilled in technology innovation and is the holder of 53 U.S. patents. | | Risk Oversight & Management | Management and board experience as the CEO and co-founder of the Company provides extensive executive leadership expertise in navigating the range of risks faced by the Company over the past 30 years. |

  25. Jeri Williams

    Jeri Williams Director since 2023 Age: 58 Board Committees: Audit Committee and Enterprise Risk and Compliance Committee Other Public Company Boards: None Ms. Williams served as Chief of Police for the Phoenix Police Department, the first female to lead the city’s force, from 2016 to 2022. During her tenure with the department, she advanced a number of progressive strategies, including key areas such as community engagement and professional standards. Previously, she served nearly six years as Chief of Police in the City of Oxnard, California. Ms. Williams has received extensive accolades for her dedication to law enforcement, including being named one of Arizona’s Most Intriguing Women by the Arizona Centennial Legacy Project and recognized as California’s Assembly District 44 Woman of the Year for her leadership and outstanding accomplishments. In 2016, President Obama appointed Ms. Williams to a membership position on the Medal of Valor Review Board. She has also served as the first female President of the Major Cities Chiefs Association. Ms. Williams holds a B.A. in Fine Arts from Arizona State University and a M.A. in Education from Northern Arizona University.

  26. Jeri Williams

    | Governmental Experience | Service as the President of the Major Cities Chiefs Association provides valuable insight into community engagement and enhances relationships with various governmental agencies and law enforcement leaders. | | Law Enforcement Experience | Service as Chief of Police for the Phoenix Police Department and City of Oxnard, California provides deep insight into the operational demands of our law enforcement customers. |

  27. DIRECTOR COMPENSATION

    DIRECTOR COMPENSATION Members of the Board who are employees of the Company are not separately compensated for serving on the Board. Board compensation is reviewed periodically by the Company’s Compensation Committee. Non-employee directors of the Company are paid $10,000 in cash per quarter and are eligible to receive annual grants of restricted stock units (“RSUs”) with a grant date fair value equal to approximately $200,000 vesting on the one-year anniversary of the grant. New Board members are eligible to receive an initial grant of RSUs with a grant date fair value equal to approximately $200,000 in their first year of service vesting in equal annual installments over three years. The Chair of the Board receives an additional (i) $5,000 in cash per quarter and (ii) an annual grant of RSUs with a grant date fair value equal to approximately $20,000 vesting on the one-year anniversary of the grant date. Board members who provide any special Board advisory consultations in their official capacity as Board members (other than Board and committee meetings) are paid compensation at the rate of $2,500 per day or $1,250 per half day, with no pay for travel days. All directors are reimbursed for reasonable expenses incurred in connection with their attendance at meetings. In addition, for the fiscal year ended December 31, 2023, Board members serving on committees in either the chair or member capacity received fees as summarized in the following table:

  28. DIRECTOR COMPENSATION

    | | Annual | Annual | | Committee | Chairman Fee | Member Fee | | Audit | $25,000 | $10,000 | | Compensation | 15,000 | 7,500 | | Nominating and Corporate Governance | 10,000 | 5,000 | | Mergers and Acquisitions and Capital Structure | 10,000 | 6,000 | | Enterprise Risk and Compliance | 10,000 | 6,000 | | Scientific and Medical | 24,000 | 10,000 |

  29. DIRECTOR COMPENSATION

    The annual RSU awards are typically granted on the date of the Company’s annual meeting of shareholders. Directors have the option of deferring all or a portion of their cash compensation into the TASER International, Inc. Deferred Compensation Plan, the Company’s non-qualified deferred compensation plan (the “Deferred Compensation Plan”). In 2021, the Compensation Committee retained compensation consulting firm Compensia, which provided research, data analyses, benchmarking and design expertise in adjusting compensation for its directors. Compensia provided director compensation data based on its proprietary database for public technology companies with annual sales between $435 million and $1.7 billion, and with market capitalization of $2.4 billion to $37.6 billion. The Compensation Committee’s compensation philosophy is to generally set director compensation at approximately the 50% benchmark to peers, adjusted every three years. The results for Board committee retainers were implemented in 2021 and remained mostly unchanged in 2022 and 2023, while Board committee chair fees and Compensation Committee member fees were updated in 2022 to the levels shown in the above table. The following table summarizes the compensation paid to non-employee directors for the fiscal year ended December 31, 2023.

  30. DIRECTOR COMPENSATION

    | | Fees Earned or | | All Other | | | | Paid in Cash | Stock Awards | Compensation | | | Name | ($) | ($) (1) (2) (3) | ($) (4) | Total ($) | | Erika Ayers Badan | $21,250 | $200,018 | | $221,268 | | Adriane Brown | 63,500 | 200,090 | — | 263,590 | | Julie A. Cullivan (5) | 62,500 | 200,090 | — | 262,590 | | Michael Garnreiter | 97,500 | 220,240 | — | 317,740 | | Caitlin E. Kalinowski | 59,000 | 200,090 | — | 259,090 | | Mark W. Kroll (5) | 73,750 | 200,090 | 114,000 | 387,840 | | Matthew R. McBrady | 61,000 | 200,090 | — | 261,090 | | Hadi Partovi | 63,500 | 200,090 | — | 263,590 | | Graham Smith | 41,750 | 400,145 | | 441,895 | | Jeri Williams | 38,000 | 400,145 | | 438,145 |

  31. DIRECTOR COMPENSATION

    | (1) Amounts in this column represent the aggregate grant date fair value of RSUs, computed in accordance with stock-based compensation accounting rules in Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation—Stock Compensation (“ASC Topic 718”). The fair value of each RSU is the closing price of our common stock on the date of grant. Each non-employee director, aside from Ms. Ayers Badan, received an award of 993 RSUs on May 12, 2023. The awards vest on the one-year anniversary of the grant on May 12, 2024. Pursuant to SEC regulations, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. The assumptions used in the calculations of the grant date fair values for such awards are included in Note 1 to our consolidated financial statements for the fiscal year ended December 31, 2023 within our 2023 Annual Report. |

  32. DIRECTOR COMPENSATION

    The following table shows the aggregate number of RSUs outstanding for each director as of December 31, 2023.

  33. DIRECTOR COMPENSATION

    | | Aggregate | | | Restricted Stock | | Name | Units Outstanding | | Erika Ayers Badan | 1,041 | | Adriane Brown | 1,471 | | Julie A. Cullivan | 1,471 | | Michael Garnreiter | 1,571 | | Caitlin E. Kalinowski | 1,471 | | Mark W. Kroll | 1,471 | | Matthew R. McBrady | 1,471 | | Hadi Partovi | 1,471 | | Graham Smith | 1,915 | | Jeri Williams | 1,915 |

  34. DIRECTOR COMPENSATION

    | (2) Pursuant to his service as Chair of the Board, on May 12, 2023, Mr. Garnreiter received a grant of 100 shares, which vests one year from the grant date. |

  35. DIRECTOR COMPENSATION

    | (3) Ms. Ayers Badan, Mr. G. Smith and Ms. Williams joined the Board in 2023. As described above, new Board members are eligible to receive an initial grant of RSUs with a grant date fair value equal to approximately $200,000 in their first year of service vesting in equal annual installments over three years. Ms. Williams and Mr. G. Smith each received an RSU award with a grant date fair value equal to $200,055 on March 16, 2023, which will vest annually over three years. Ms. Ayers Badan received an RSU award with a grant date fair value equal to $200,018 on June 1, 2023, which will vest annually over three years. |

  36. DIRECTOR COMPENSATION

    (4)Other compensation for Dr. Kroll represents fees for consulting services provided.

  37. DIRECTOR COMPENSATION

    | (5) Non-employee directors have the option of participating in the Deferred Compensation Plan through which participants may elect to postpone the receipt and taxation of a portion of their compensation. All gains or losses are allocated fully to plan participants and the Company does not guarantee a rate of return on deferred balances. The Company does not make discretionary payments to the plan. There were no above-market returns for participants in the plan. Dr. Kroll and Ms. Cullivan participate in the Deferred Compensation Plan and elected to defer $73,750 and $62,500, respectively, of earned compensation into the plan during the year ended December 31, 2023. |

  38. A Letter from Our Compensation Committee

    While we are proud of our financial achievements and strategic milestones in 2023, we maintain a long-term outlook for the Company. We know that the work underway today will enable us to continue delivering on our commitment to safer communities, neighborhoods, schools and public spaces, all while creating long-term value for our shareholders. Our management team is a critical part of our success to date and our continued success in the future. With this in mind, the Compensation Committee sought shareholder feedback over the last year. Our goal was to hear directly from our investors regarding how they evaluate components of compensation and their views on pay structures that appropriately incentivize and retain the talent that executes on our strategy day-in-and-day-out, while planning for the next three, five and seven years. These investor conversations provided input into how the Compensation Committee has structured our 2024 incentive plans for our broad-based employees, executive leadership team and CEO, Patrick W. Smith. At our 2024 Annual Meeting, we are asking shareholders for the approval of three separate plans—all connected in their goals and metrics for success—but individually structured for different components of our workforce. We have seen successful alignment of these types of employee plans and value creation in the past. In 2019, shareholders approved a similar plan for our broad-based employees, which aligned motivation and strategic execution, resulting in nearly $16 billion of shareholder value creation since that time. With our 2024 plans, our aim is to incentivize Axon employees across all levels by focusing on our key operational metrics and drivers of long-term value. These plans will give employees the opportunity to own equity and personally partake in value creation as a result of their contributions. As we have outlined in our proxy statement, these three proposals are: Proposal No. 2, the Axon Enterprise, Inc. Amended and Restated 2022 Stock Incentive Plan (our broad-based long-term incentive plan), which will provide us the needed shares to grant the time-based equity awards that are critical to compensating our broad-based employee population who support our long-term strategy; (1) See Reconciliation of Non-GAAP Measures, for the GAAP financial measure most directly comparable to each non-GAAP financial measure, and a reconciliation of the differences between each non-GAAP financial measure and the comparable GAAP financial measure. Proposal No. 3, the Axon Enterprise, Inc. eXponential Stock Plan (the “2024 Employee XSP”), which is intended to provide employees across all levels of the Company (other than our CEO, who is intended to be compensated through the 2024 CEO Performance Award) with an opportunity to elect to receive a portion of their compensation under this performance-based long-term incentive plan aligned with our key operational metrics and share price performance; and Proposal No. 4, the 2024 CEO Performance Award, which is a performance-based long-term incentive award intended to motivate our CEO, Patrick W. Smith, over the next seven years to drive the same equity growth, aligned with the same key operational metrics and share price performance goals as the 2024 Employee XSP, connecting our incentive drivers across the Company. While these proposals are separate to achieve their specified aims, the Compensation Committee views them as an integral and interconnected part of our talent management strategy as we seek to incentivize as one company, while allowing for individual participation in our collective success. In structuring and managing these plans, we remain committed to appropriate and sustainable levels of dilution. As shareholders invested alongside our Company, we urge you to vote FOR these proposals. Thank you for your support as we work to create incentives that will deliver shareholder value. Best, Compensation Committee members,

  39. 2023 Compensation Reflected Axon’s 2023 Performance and Key Leadership Promotions

    | ● | Annual cash incentive program paid out between 153.3% and 160.3% for our NEOs (other than our CEO), which aligns with our strong financial performance highlighted above. |

  40. 2023 Compensation Reflected Axon’s 2023 Performance and Key Leadership Promotions

    | ● | We granted Contingent RSUs (as defined below) in December 2023 to our NEOs (other than our CEO) as we wait to determine whether shareholders will approve the 2024 Employee XSP. Should the 2024 Employee XSP be approved by shareholders, the Contingent RSUs granted in December 2023 will be forfeited and replaced with performance-based grants under the 2024 Employee XSP for these NEOs, as further described below. If the 2024 Employee XSP is not approved by shareholders, the Contingent RSUs will remain outstanding and will vest over three years. |

  41. 2023 Compensation Reflected Axon’s 2023 Performance and Key Leadership Promotions

    | ● | We granted time-based RSUs that will vest over three years in connection with the promotions of Ms. Bagley and Messrs. Isner and Kunins as we made key leadership changes to support our long-term strategy. |

  42. Initial 2023 Annualized Target Direct Compensation

    | | | | Annual Target | | Long-term Target | | Long-term Target | | Target Total | | | | | Cash Incentive | | Equity Compensation-- | | Equity Compensation-- | | Direct | | 2023 | Annual Salary (1) | | Compensation (2) | | XSUs (3) | | RSUs (4) | | Compensation | | Name | $ | % Total | $ | % Total | $ | % Total | $ | % Total | $ | | Patrick W. Smith | $31,201 | 100.0% | $— | —% | $— | —% | $— | —% | $31,201 | | Joshua M. Isner | 350,000 | 8.0 | 800,000 | 18.4 | 1,000,000 | 23.0 | 2,200,000 | 50.6 | 4,350,000 | | Brittany Bagley | 450,000 | 10.5 | 450,000 | 10.5 | 1,000,000 | 23.2 | 2,400,000 | 55.8 | 4,300,000 | | Jeffrey C. Kunins | 300,000 | 9.2 | 300,000 | 9.2 | 1,000,000 | 30.8 | 1,650,000 | 50.8 | 3,250,000 |

  43. Initial 2023 Annualized Target Direct Compensation

    | (2) Presented at target levels. The annual target cash incentive compensation for Mr. Isner reflects annual target cash incentive bonus of $500,000 and $300,000 for other non-variable cash compensation. For details on total annual cash incentive compensation earned by our NEOs, see detail under “2023 Annual Cash Incentive Program.” |

  44. Initial 2023 Annualized Target Direct Compensation

    | (4) Except for Ms. Bagley, reflects the grant date value of RSUs vesting in 2023, which were granted in December 2022 for Messrs. Isner and Kunins. For Ms. Bagley, reflects the annual value of the portion of her September 2022 grant received in 2022. In addition, Ms. Bagley received a grant of $3,300,000 as part of her employment agreement, which is not reflected here. |

  45. 2023 Annual Cash Incentive Program

    2023 Annual Cash Incentive Program Payouts to our NEOs (other than our CEO) under the 2023 annual cash incentive program were based on the achievement of Company-wide annual financial and operational goals, as well as additional metrics based on regrettable attrition and our Company values (or, in the case of Mr. Isner, employee engagement). The annual cash incentive program metrics were weighted 80% in respect of Company-wide annual financial and operational goals, 10% in respect of regrettable attrition, and 10% in respect of Company values (or, in the case of Mr. Isner, employee engagement). The Compensation Committee believes the criteria for the annual cash incentive program were challenging but achievable.

  46. 2023 Annual Cash Incentive Program

    | 2023 Financial and Operational Goals | | | | | | | | | | | | | | Weighted | | Metric | Threshold | Target | Maximum | Actual | Weight | Payout | | | ($ in millions) | | | | | | | Revenue | $1,390.0 | $1,430.0 | $1,550.0 | $1,563.0 | 30.0% | 60.0% | | Adjusted EBITDA Margin | 19.0% | 20.0% | 22.0% | 21.1 | 30.0 | 46.0 | | New Market Bookings | $500.0 | $600.0 | $700.0 | $743.0 | 20.0 | 30.0 | | New Product Adoption | 700,000 | 835,000 | 1,020.0 | 1,230.0 | 20.0 | 30.0 | | Actual attainment/plan payout | | | | | 100% | 166.0% |

  47. 2023 Annual Cash Incentive Program

    The annual financial and operational goals were based on revenue, Adjusted EBITDA margin, new market bookings and new product adoption. The revenue and Adjusted EBITDA margin metrics each had a threshold, target and maximum goal with corresponding base payouts of 75%, 100%, 150% and 200% of target, respectively. The new market bookings and new product adoption metrics each had a threshold, target and maximum goal with corresponding base payouts of 75%, 100% and 150% of target, respectively. Achievement of the 2023 cash incentive program metrics was measured after the Company determined its earnings for 2023. The annual cash incentive program metric based on regrettable attrition is measured as rolling 12-month attrition of employees rated as top performing in the prior performance rating cycle. As reported in our 2023 Annual Report, we closed the year with our overall regrettable attrition rate at less than 1%, well under the annual goal of 2.5%. The metric based on Company values for Ms. Bagley and Mr. Kunins was measured based on a peer survey and input from Mr. Isner, which resulted in a blended payout of 125%. The metric based on employee engagement for Mr. Isner was measured by the average of our overall employee satisfaction scores from the two employee surveys run in 2024, which resulted in a 78.21% average score. The employee engagement metric contemplated a 50% payout based on a score of 78, a 100% payout based on a score of 80 and a 150% payout based on a score of 82, and the actual payout of 55% was determined by linear interpolation. The actual annual cash incentive program payouts to our NEOs were as follows and take into account the changes in each of the following NEO’s annual target cash incentive compensation that were effective July 1, 2023:

  48. 2023 Annual Cash Incentive Program

    | Weighting | 80% | 10% | 10% | Weighted | | | | Company Bonus (1) | Attrition (2) | Values (3) | Average Payout | Cash Payout | | Joshua M. Isner | 166.0% | 150.0% | 55.0% | 153.3% | $766,500 | | Brittany Bagley | 166.0 | 150.0 | 125.0 | 160.3 | 842,563 | | Jeffrey C. Kunins | 166.0 | 150.0 | 125.0 | 160.3 | 521,304 |

  49. Components of Executive Compensation

    | ● | Annual cash incentive bonus; and |

  50. Components of Executive Compensation

    | ● | Long-term equity compensation in the form of performance-based XSUs and service-based RSUs. |

  51. Annual Cash Incentive Program

    Annual Cash Incentive Program The objective of the annual cash incentive program has been to provide executives with a competitive total cash compensation opportunity, as well as to align executive rewards with Company performance. Each year, the Compensation Committee reviews the framework for the annual cash incentive program, including the potential metrics and associated weightings and goals, and approves these metrics and any additional metrics to the extent used to determine the payouts to our NEOs. The Compensation Committee ensures the goals that are set at the beginning of the year are viewed as challenging but achievable to help support execution against our annual financial and operational priorities to drive long-term shareholder value.

  52. Long-Term Performance-Based Equity Compensation

    Long-Term Performance-Based Equity Compensation Beginning in 2018, the Company discontinued its long-term performance-based RSU grants to NEOs. Instead, our CEO participated in the 2018 CEO Performance Award and our other NEOs participated in the 2019 XSPP. The 2018 CEO Performance Award and the 2019 XSPP were each an incentive for future performance in the form of a high-risk, high-reward compensation plan, and the value was realizable only if and when each set of market capitalization and operational goals were achieved and the options or shares associated with each tranche vested. As of December 31, 2023, all market capitalization and operational goals under the 2018 CEO Performance Award and the 2019 XSPP have been achieved and certified by the Compensation Committee. In 2023, to continue incentivizing future performance, the Company granted to employees (other than our CEO) awards of eXponential Stock Units (“XSUs”) under the 2024 Employee XSP, which may be achieved based on performance against stock price and operational performance, subject to shareholder approval of Proposal No. 3. In addition, the Company granted to our CEO the 2024 CEO Performance Award with the same performance metrics and hurdles, subject to shareholder approval of Proposal No. 4. 2018 CEO Performance Award On May 24, 2018, our shareholders approved the Board of Directors’ grant of a performance-based stock option award to our CEO (the “2018 CEO Performance Award”). The 2018 CEO Performance Award consists of 12 tranches with a vesting schedule based entirely on the attainment of both market capitalization goals (market conditions) and operational goals (performance conditions), assuming continued employment either as the CEO or as both Executive Chairman and Chief Product Officer and service through each goal attainment date. As of December 31, 2023, all 12 market capitalization and operational goals have been achieved and certified by the Compensation Committee. As a result, all outstanding stock options have vested. As all 12 operational goals have been achieved, we recorded total stock-based compensation expense of $246.0 million related to the 2018 CEO Performance Award. No stock-based compensation expense remains unamortized for the period ending December 31, 2023. Our CEO’s compensation for 2023, 2022 and 2021 consisted of an annual base salary equal to minimum wage and the 2018 CEO Performance Award. 2024 CEO Performance Award Over the past two years, the Compensation Committee has been discussing the design and structure of a new XSU award to be granted to our CEO. On December 18, 2023, the Compensation Committee approved a grant of XSUs to our CEO (the “2024 CEO Performance Award”), effective as of December 22, 2023 and contingent on shareholder approval. The 2024 CEO Performance Award is 100% performance-based upon achievement of both stock price and operational performance hurdles, subject to certain continued service requirements. The Compensation Committee established a notional value for the 2024 CEO Performance Award of $150 million, representing approximately $7 million of annual target long-term incentive value over the seven-year term of the CEO Employment Agreement (as defined below), with a risk multiplier of three. Simplified Formula: [($7 million annual value) x (7 year term)] x risk multiplier of 3 à approximately $150 million The number of shares subject to the XSU award was calculated by dividing the notional value by a 90-day volume weighted average price per share of Company common stock as of the day preceding the grant date. For accounting purposes, the grant date of these XSUs will not occur unless and until the 2024 CEO Performance Award is approved by shareholders, and thus the fair value of the XSUs for accounting purposes is not determinable until such time. For details regarding the 2024 CEO Performance Award, see “Proposal No. 4—Approval of the 2024 CEO Performance Award.” 2019 eXponential Stock Performance Plan On February 12, 2019, our shareholders approved the Axon Enterprise, Inc. 2019 Stock Incentive Plan (the “2019 Plan”), which was adopted by the Board of Directors to reserve a sufficient number of shares to facilitate our eXponential Stock Performance Plan (the “2019 XSPP”) and grants of XSUs under the plan. Pursuant to the 2019 XSPP, all eligible full-time U.S. employees (other than our CEO) were granted an award of 60 XSUs in January 2019, and certain employees, including our NEOs (other than our CEO) had the opportunity to elect to allocate a percentage of the value of their target compensation over a nine-year period from 2019 to 2027 in the form of additional XSUs (in excess of the 60 XSUs that were granted). For employees who elected to receive XSUs, the XSU grants were made as an upfront, lump-sum grant in January 2019, intended to replace that portion of the target compensation they elected to receive in the form of XSUs for the next nine years. The XSUs are grants of RSUs that vest in 12 equal tranches. Each of the 12 tranches vest upon certification by the Compensation Committee that both (i) the market capitalization goal for such tranche, which began at $2.5 billion for the first tranche and increased by increments of $1.0 billion thereafter, and (ii) any one of eight operational goals focused on revenue or eight operational goals focused on Adjusted EBITDA have been met for the previous four consecutive fiscal quarters. The operational revenue and Adjusted EBITDA goals are the same targets as provided for the 2018 CEO Performance Award. As of December 31, 2023, all 12 market capitalization and operational goals under the 2019 XSPP have been achieved and certified by the Compensation Committee. As a result, all XSU tranches have vested. As all 12 operational goals have been achieved, we recorded stock-based compensation expense of $199.9 million related to the XSU awards from their respective grant dates. No stock-based compensation expense remains unamortized for the period ending December 31, 2023. 2024 eXponential Stock Plan Over the past two years, the Compensation Committee has been discussing the design and structure of new XSU awards for the broader employee population (other than our CEO), based on employee and shareholder feedback on the structure of a new performance-based plan. The Compensation Committee seeks to create a structure that aligns employees to the success of the business, based on stock price appreciation and key operational metrics. On October 14, 2023, the Board adopted the Axon Enterprise, Inc. 2024 eXponential Stock Plan (the “2024 Employee XSP” or “XSP 2.0”), which provides for XSU awards to employees (other than our CEO), subject to shareholder approval. On December 18, 2023, the Compensation Committee approved the grants of XSUs under the 2024 Employee XSP to our NEOs (other than our CEO), effective as of December 22, 2023 and contingent on shareholder approval. The XSU awards are 100% performance-based upon achievement of both stock price and operational performance hurdles, subject to certain continued service requirements. The number of shares subject to each XSU award was calculated by dividing the notional value of the award determined by the Compensation Committee by a 90-day volume weighted average price per share of Company common stock as of the day preceding the grant date. For accounting purposes, the grant date of these XSUs will not occur unless and until the 2024 Employee XSP is approved by shareholders, and thus the fair value of the XSUs for accounting purposes is not determinable until such time. For details regarding the 2024 Employee XSP, see “Proposal No. 3—Approval of the Axon Enterprise, Inc. 2024 eXponential Stock Plan.”

  53. Long-Term Performance-Based Equity Compensation

    The Company intends to continue granting XSUs in place of long-term performance-based RSUs given the strong alignment with shareholder experience requiring meaningful growth in both stock price and operational performance. The 2024 Employee XSP recognizes Axon’s global growth potential and is designed to motivate our employees who are instrumental to the innovation and development of Axon’s new products and who continue to deliver exceptional value to Axon.

  54. Long-Term Service-Based Equity Compensation

    Long-Term Service-Based Equity Compensation The Compensation Committee believes that service-based equity compensation with multi-year vesting periods ensures that our NEOs have a continuing stake in our long-term success. For 2023, the Compensation Committee granted RSUs in December 2022, which vest annually over a three-year service period. For 2024, the Compensation Committee granted contingent RSUs (“Contingent RSUs”) in December 2023 to Ms. Bagley and Messrs. Isner and Kunins in lieu of XSU awards as we await the outcome of Proposal No. 3. Should the 2024 Employee XSP be approved by shareholders, the Contingent RSUs granted in December 2023 will be forfeited and replaced with XSU grants under the 2024 Employee XSP for these NEOs, as further described below. If the 2024 Employee XSP is not approved by shareholders, the Contingent RSUs will remain outstanding and will vest over three years. In determining the total number of Contingent RSUs to award to each NEO (other than our CEO), the Compensation Committee considered, among other things, the strategic objectives of the Company over the next three years and the target figure for go-forward XSU grants for each executive, less the value of previously granted XSUs under the 2019 XSPP. The following table sets forth the service-based RSU awards made to our continuing NEOs, other than Ms. Bagley, in December 2022 (for 2023) and the Contingent RSUs made in December 2023 (for 2024). See “Long-Term Service-Based Equity Awards in Connection with Promotions” below for further discussion on determination of vesting schedules and previously granted RSUs.

  55. Long-Term Service-Based Equity Compensation

    | | For Fiscal Year 2023 | | For Fiscal Year 2024 | | | | Number of | | Number of | | | | Service-based | Grant Date | Service-based | Grant Date | | Named Executive | RSUs Awarded | Fair Value | RSUs Awarded | Fair Value | | Patrick W. Smith | — | — | — | — | | Joshua M. Isner (1) | 11,857 | 2,200,066 | 36,219 | 9,381,808 | | Brittany Bagley (2) | — | — | 14,337 | 3,713,713 | | Jeffrey C. Kunins (1) (3) | 8,893 | 1,650,096 | 9,810 | 2,541,084 |

  56. Long-Term Service-Based Equity Compensation

    | (1) The Contingent RSUs for Mr. Isner and Mr. Kunins will vest as to one-half in December 2024, one-third in four substantially equal installments in March, May, August and November 2025, and the remaining one-sixth in four substantially equal installments in March, May, August and November 2026, subject in each case to executive’s continued employment with the Company through the applicable vesting date. |

  57. Long-Term Service-Based Equity Compensation

    | (2) The Contingent RSUs for Ms. Bagley will vest as to 39% in December 2024, 13% in two substantially equal installments in March and May 2025, 24% in two substantially equal installments in August and November 2025, and the remaining 24% in four substantially equal installments in March, May, August and November 2026, subject in each case to executive’s continued employment with the Company through the applicable vesting date. |

  58. Long-Term Service-Based Equity Compensation

    | (3) The additional RSU award granted to Mr. Kunins will vest as to one-third on December 22, 2024, one-third in August 2025 and one-third in August 2026, subject in each case to executive’s continued employment with the Company through the applicable vesting date. |

  59. Long-Term Service-Based Equity Awards in Connection with Promotions

    Long-Term Service-Based Equity Awards in Connection with Promotions The Company uses service-based RSUs to work alongside the XSU grants to help support retention given the heightened risk-reward orientation of the XSUs. In September 2023, the Compensation Committee granted additional RSUs to Mr. Isner, Ms. Bagley and Mr. Kunins in connection with their promotions to President, Chief Operating Officer and Chief Financial Officer, and Chief Product and Chief Technology Officer, respectively. The values for each executive’s grant in September 2023 were determined by using each executive’s go-forward annual RSU target opportunity over the next three years, less any expected vesting value from prior RSU awards. This calibration allows each executive to be on track to vest in their calibrated on-target earnings for their new roles as determined by the Compensation Committee. In September 2023, the Compensation Committee determined the number of shares that would be granted using a price per share of $194.58, which was the closing price of a share of the Company’s common stock as of July 3, 2023 (to align with the effective date of the executives’ promotions) and formally approved the grants on September 7, 2023. The stock price on the date of the grant was higher than $194.58 leading to a higher reported value.

  60. Long-Term Service-Based Equity Awards in Connection with Promotions

    | | 2023 | | | | Number of | | | | Service-based | Grant Date | | Named Executive | RSUs Awarded | Fair Value | | Patrick W. Smith | — | — | | Joshua M. Isner (1) | 105,502 | 23,723,675 | | Brittany Bagley (2) | 27,368 | 6,203,489 | | Jeffrey C. Kunins (3) | 38,931 | 8,608,891 |

  61. Long-Term Service-Based Equity Awards in Connection with Promotions

    | (1) Mr. Isner’s September 2023 award will vest as to 34,887 RSUs on the first anniversary of the grant date, as to 27,856 RSUs on August 13, 2025, and as to 32,480 RSUs on August 13, 2026, subject to continued service through each vesting date to catch up to his target compensation rate. |

  62. Long-Term Service-Based Equity Awards in Connection with Promotions

    | (2) Ms. Bagley’s September 2023 award will vest as to 6,167 RSUs on the first anniversary of the grant date, as to 1,542 RSUs on August 13, 2025, and as to 16,446 RSUs on August 13, 2026, subject to continued service through each vesting date to catch up to her target compensation rate. |

  63. Long-Term Service-Based Equity Awards in Connection with Promotions

    | (3) Mr. Kunins’ September 2023 award will vest as to 11,306 RSUs on the first anniversary of the grant date, as to 11,307 RSUs on August 13, 2025, and as to 14,133 RSUs on August 13, 2026, subject to continued service through each vesting date to catch up to his target compensation rate. |

  64. Long-Term Service-Based Equity Awards in Connection with Promotions

    In March 2024, following the finalization of the 2024 Employee XSP and grants of XSUs thereunder (subject to shareholder approval of Proposal No. 3), and considering the time that had elapsed between the promotions of Mr. Isner, Ms. Bagley and Mr. Kunins in July 2023 and their OTE allocations with respect to the 2024 Employee RSUs and grants of XSUs thereunder, the Compensation Committee reviewed on-target earnings for each of Mr. Isner, Ms. Bagley and Mr. Kunins, and determined to grant additional equity awards in the form of service-based RSU awards (10,279 RSUs for Mr. Isner, 3,213 RSUs for Ms. Bagley and 2,185 RSUs for Mr. Kunins) to deliver to the executives the value equivalent to the OTE otherwise allocated to XSUs in the six-month period following their promotions from July 1 through December 31, 2023. Because these grants were not made during fiscal year 2023, these grants are not reflected in the Summary Compensation Table or other compensation tables included in this proxy statement.

  65. Forward-Looking Compensation Decisions for 2024

    | | | | Annual | | Long-term Target | | | Long-term Target | | Target Total | | | | | Target Cash Incentive | | Equity Compensation-- | | Equity Compensation-- | | | Direct | | 2024 | Annual Salary | | Compensation | | XSUs (1) | | RSUs (2) | | | Compensation | | Name | $ | % Total | $ | % Total | $ | % Total | $ | | % Total | $ | | Patrick W. Smith | $31,201 | 0.4% | $— | —% | $7,143,000 | 99.6% | $— | | —% | $7,174,201 | | Joshua M. Isner | 500,000 | 4.1 | 500,000 | 4.1 | 5,000,000 | 40.5 | 6,320,000 | | 51.3 | 12,320,000 | | Brittany Bagley | 450,000 | 6.9 | 600,000 | 9.2 | 2,250,000 | 34.6 | 3,200,000 | | 49.3 | 6,500,000 | | Jeffrey C. Kunins | 350,000 | 6.6 | 350,000 | 6.6 | 1,518,000 | 28.6 | 3,082,000 | | 58.2 | 5,300,000 |

  66. Forward-Looking Compensation Decisions for 2024

    | (2) Reflects the grant date value of RSUs vesting in 2024 that were granted in September 2023 and are intended to serve as 2024 compensation awards. Does not include the grant date fair value of RSUs vesting in 2024 that were granted in March 2024 and are intended to deliver to Mr. Isner, Ms. Bagley and Mr. Kunins the value equivalent to the OTE otherwise allocated to XSUs in the six-month period following their promotions from July 1 through December 31, 2023. |

  67. Strong Governance in Determining Executive Compensation

    | ● | Schedules setting forth the total compensation of the NEOs, including base salary, cash incentives, equity awards, perquisites and other compensation and any potential amounts payable to the NEOs pursuant to employment, severance and change of control agreements; |

  68. Strong Governance in Determining Executive Compensation

    | ● | Summaries that show the NEOs’ total accumulated stock awards and stock option holdings; |

  69. Strong Governance in Determining Executive Compensation

    Our executive management supports the Compensation Committee in carrying out its responsibilities by preliminarily outlining compensation levels for NEOs, administering our compensation plans, policies and programs, and providing data to the Compensation Committee for analysis. Periodically, compensation is initially proposed by the CEO for each executive (excluding the CEO), consisting of annual base salary, annual cash incentive compensation and long-term equity compensation, which is then provided to the Compensation Committee for review and approval. Our Compensation Committee has sole authority to engage the services of outside consultants and advisors, as it deems necessary or appropriate in the discharge of its duties and responsibilities. The Compensation Committee has budgetary authority to authorize and pay for the services of outside consultants and advisors, and such consultants and advisors report directly to the Compensation Committee. The Compensation Committee’s compensation philosophy is to generally set executive and director compensation at approximately the 50% benchmark to peers and engage a compensation consulting firm to provide research, data analyses, benchmarking and design expertise in reviewing and structuring compensation programs for the Company’s NEOs generally every three years, which began in 2018. Compensation generally stays flat in the interim years between compensation studies although adjustments may be made if appropriate based on individual performance, Company performance, relative shareholder returns and other relevant considerations. The Compensation Committee also considers the results of the Company’s say-on-pay vote for the prior year to ensure that its decisions and the Company’s executive compensation programs for the Company’s NEOs are aligned with long-term shareholder interests. For more detail regarding how the results of the most recent shareholder advisory vote on executive compensation were considered in making this year’s compensation decisions, see “Overview and Summary; Consideration of Prior Year Say-on-Pay Vote” in Proposal No. 5. In 2022, the Compensation Committee engaged Semler Brossy Consulting Group, LLC (“Semler Brossy”) as its compensation consultant to provide their input on go-forward strategy for our NEO compensation, particularly in light of the 2018 CEO Performance Award and XSU awards under the 2019 XSPP becoming fully vested. In mid-2023, Semler Brossy supported the Compensation Committee in assessing competitive market levels to inform pay actions for the executive team. Semler Brossy provided executive compensation data from both our peer group and available technology survey data.

  70. Peer Comparator Group

    Peer Comparator Group The scope of Semler Brossy’s review in 2023 included determining an appropriate comparator group to which to compare the Company’s executive compensation, based primarily on the following criteria: technology industry sector, revenue and revenue growth, valuation multiple and market capitalization. Semler Brossy selected public technology companies with annual sales roughly 1/3x to 3x Axon’s revenues at the time (i.e., revenues between $435 million and $4 billion) and three-month average market capitalization between 1/4x to 4x Axon’s market cap at the time (i.e., market capitalization between $4 billion and $65 billion). Our 30-day market capitalization was positioned at the median of peers of approximately $16 billion at the time of the analysis, while our revenue of $1.2 billion was within a reasonable range of market median of approximately $1.5 billion. We focused on including companies with similar revenue growth profiles, and our revenue growth outpaced the peer group on a one-year basis (38% vs. 30% at peer median). Based on Semler Brossy’s analysis, the Compensation Committee selected the following comparator group when reviewing executive compensation for 2023:

  71. Peer Comparator Group

    | Alarm.com Holdings, Inc. | Fair Isaac Corporation | Procore Technologies | | ANSYS | HEICO Corporation | PTC Inc. | | Aspen Technology, Inc. | HubSpot | Samsara | | Crowdstrike | MongoDB, Inc. | Tyler Technologies Inc. | | Datadog | Palantir Technologies | Zscaler | | Dynatrace, Inc. | Paycom Software, Inc. | | | Elastic N.V. | Paylocity Holding Corporation | |

  72. Peer Comparator Group

    In addition to the comparator group, to supplement the executive compensation information where publicly disclosed information was limited, Semler Brossy provided executive compensation information for the NEOs using a survey sample of technology companies with over $1 billion dollars in revenue.

  73. Employment Agreements and Other Arrangements with NEOs

    Employment Agreements and Other Arrangements with NEOs

  74. CEO Employment Agreement with Patrick W. Smith

    CEO Employment Agreement with Patrick W. Smith On December 8, 2023, the Company entered into an employment agreement (the “CEO Employment Agreement”) with Mr. Smith. Under the CEO Employment Agreement, Mr. Smith will continue to serve as the Company’s CEO and remain a member of the Board. The CEO Employment Agreement provides the specific terms and conditions of Mr. Smith’s employment through December 31, 2030 and provides for at-will employment for an indefinite period thereafter. The CEO Employment Agreement generally provides for compensation opportunities to Mr. Smith in a lesser amount than the Compensation Committee was otherwise willing to provide so that the Company could instead provide enhanced compensation opportunities to other employees of the Company. In particular, Mr. Smith will receive a base salary at the minimum wage rate (equating to $31,201 per year), and will not be eligible for increase prior to January 1, 2031. Mr. Smith will not be entitled to any annual bonus or other short-term incentives. With the exception of the 2024 CEO Performance Award, Mr. Smith will also not be eligible for any equity compensation awards prior to January 1, 2031. Pursuant to the CEO Employment Agreement, Mr. Smith agreed that, if he terminates his employment for any reason on or before December 31, 2030, Mr. Smith will promptly pay to the Company $30 million. In addition, Mr. Smith will be subject to restrictive covenants related to competition, solicitation of Company employees and customers and disparagement of the Company.

  75. Other Effective Employment Agreements

    Other Effective Employment Agreements In 2019, the Company entered into revised employment agreements with Mr. Isner and Mr. Kunins for their continued service. The fundamental terms and provisions of each executive’s agreement are substantially similar to the terms and provisions of each executive’s previously existing executive employment agreement except as follows: (i) the executives are no longer entitled to severance benefits following a resignation for good reason, except following Change in Control (as defined in the Company’s 2019 Stock Incentive Plan or any successor equity incentive plan adopted by the Company in the future); (ii) following a termination without cause and the terminated executive’s execution of a customary release, the terminated executive will be entitled only to continued vesting of unvested time-based RSUs scheduled to vest during the notice and severance period (one year), versus acceleration of all unvested equity awards; (iii) following termination without cause and the terminated executive’s execution of the customary release, the terminated executive will be entitled to a full-year target annual bonus or full-year target annual sales commission for the year in which the termination becomes effective, versus a prorated bonus for the year in which the termination occurs; and (iv) following termination without cause and the terminated executive’s execution of the customary release, a portion of the terminated executive’s XSUs may be entitled to accelerated vesting. In September 2022, the Company entered into an employment agreement with Ms. Bagley with the same terms under the Company’s 2022 Inducement Plan (as defined below).

  76. 2023 SUMMARY COMPENSATION TABLE

    2023 SUMMARY COMPENSATION TABLE

  77. 2023 SUMMARY COMPENSATION TABLE

    | | | | | Non-Equity | | | | | | | Stock | Incentive Plan | All Other | | | Name and Principal | | Salary | Awards (1) | Compensation (2) | Compensation (3) | | | Position | Year | ($) | ($) | ($) | ($) | Total ($) | | Patrick W. Smith | 2023 | $31,201(4) | $— | $— | $8,857 | $40,058 | | Chief Executive Officer | 2022 | 31,201(4) | — | — | 2,002 | 33,203 | | | 2021 | 31,201(4) | — | — | 1,914 | 33,115 | | Joshua M. Isner | 2023 | 425,000 | 29,955,689 | 1,066,500 | 43,608 | 31,490,797 | | President | 2022 | 350,000 | 2,991,859 | 1,313,583 | 31,931 | 4,687,373 | | | 2021 | 325,000 | 4,306,786 | 2,129,101 | 29,985 | 6,790,872 | | Brittany Bagley | 2023 | 450,000 | 8,932,642 | 892,563 | 24,769 | 10,299,975 | | Chief Operating Officer and Chief Financial Officer | 2022 | 121,023 | 13,872,891 | 179,910 | 4,191 | 14,178,015 | | Jeffrey C. Kunins | 2023 | 325,000 | 10,480,425 | 521,304 | 33,313 | 11,360,042 | | Chief Product Officer and Chief Technology Officer | 2022 | 300,000 | 1,650,096 | 451,320 | 28,452 | 2,429,868 | | | 2021 | 300,000 | 3,138,455 | 440,357 | 12,665 | 3,891,477 |

  78. 2023 SUMMARY COMPENSATION TABLE

    | (1) The amounts in this column reflect the aggregate grant date fair value of RSUs computed in accordance with ASC Topic 718. Pursuant to SEC regulations, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. The assumptions used in the calculations of the grant date fair values for such awards are included in Note 1 to our consolidated financial statements for the fiscal year ended December 31, 2023 within our 2023 Annual Report. |

  79. 2023 SUMMARY COMPENSATION TABLE

    Amounts of $5,218,929, $20,573,881 and $7,939,341 represent RSUs granted to Ms. Bagley and Messrs. Isner and Kunins, respectively, in September 2023. Amounts of $3,713,713, $9,381,808 and $1,215,110 represent Contingent RSUs granted to Ms. Bagley and Messrs. Isner and Kunin, respectively, in December 2023, which were intended as 2024 compensation. Mr. Kunins also received a service-based award in the amount of $1,325,975 granted in December 2023, which was intended as 2024 compensation, and reflects a re-allocation of his on-target earnings from XSUs to RSUs. XSUs granted pursuant to the 2024 CEO Performance Award and the 2024 Employee XSP are not considered to have been granted in 2023 for financial accounting purposes.

  80. 2023 SUMMARY COMPENSATION TABLE

    | (2) In 2023, Ms. Bagley and Messrs. Isner and Kunins received non-equity incentive compensation as a result of exceeding target metrics around revenue and other goals. Their 2023 incentive compensation was provided in the form of cash payouts, which were made in February 2024. In addition, Ms. Bagley received $50,000 and Mr. Isner received $300,000 for other non-variable cash compensation. |

  81. 2023 SUMMARY COMPENSATION TABLE

    | (3) All other compensation consists of matching contributions made to our 401(k) plan, contributions to health savings accounts, employer-paid life insurance premiums, taxable fringe items and payments made for taxes required to gross-up other earnings. Compensation for Messrs. Smith and Isner also include costs of concierge medical services. |

  82. 2023 SUMMARY COMPENSATION TABLE

    | (4) The amounts paid to Mr. Smith for 2023, 2022 and 2021 are consistent with minimum wage requirements. |

  83. PAY VERSUS PERFORMANCE

    PAY VERSUS PERFORMANCE As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(v) of Regulation S-K under the Exchange Act, we are providing the following information about the relationship between executive compensation actually paid and the financial performance of our Company. The following table sets forth the compensation for our CEO or principal executive officer (“PEO”) and the average compensation for our other NEOs. For further information concerning our compensation philosophy and how we align executive compensation with our performance, see “Executive Compensation—Compensation Discussion and Analysis.”

  84. PAY VERSUS PERFORMANCE

    | | | | | | Value of Initial $100 | | | | | | | | | | Investment Based on | | | | | | Summary | | Average Summary | Average | | Peer Group | | | | | Compensation | Compensation | Compensation | Compensation | Total | Total | | | | | Table Total for | Actually Paid | Table Total for | Actually Paid to | Shareholder | Shareholder | Net Income (loss) | Adjusted EBITDA (5) | | Year | PEO (1) | to PEO (2) (3) | Non-PEO NEOs (1) | Non-PEO NEOs (2) (3) | Return | Return (4) | (in thousands) | (in thousands) | | 2023 | $40,058 | $43,533,121 | $17,716,938 | $28,506,155 | $352.52 | $139.14 | $174,227 | $329,335 | | 2022 | 33,203 | 13,687,307 | 4,305,869 | 2,091,584 | 226.43 | 118.69 | 147,139 | 232,313 | | 2021 | 33,115 | 253,610,579 | 5,634,227 | 30,194,861 | 214.25 | 143.55 | (60,018) | 178,112 | | 2020 | 2,559,392 | 278,740,704 | 1,914,694 | 31,929,509 | 167.21 | 117.10 | (1,724) | 155,808 |

  85. PAY VERSUS PERFORMANCE

    | (1) For each year presented, Patrick W. Smith was our PEO; reflects amounts reported in the Summary Compensation Table for the respective years. Our non-PEO NEOs for 2023 were Ms. Bagley and Messrs. Isner and Kunins. Our non-PEO NEOs for 2022 were Ms. Bagley and Messrs. Isner, Kunins, Larson, Ahsan and Zito. Our non-PEO NEOs for 2021 and 2020 were Messrs. Larson, Ahsan, Isner and Kunins. Average compensation for the non-PEO NEOs reflects amounts reported in the Summary Compensation Table for the respective years. |

  86. PAY VERSUS PERFORMANCE

    | (2) Amounts shown for compensation actually paid (“CAP”) are computed in accordance with Item 402(v) of Regulation S-K under the Exchange Act and do not reflect the actual amount of compensation earned by or paid to the NEOs during the applicable year. These amounts reflect total compensation as reported in the Summary Compensation Table with certain adjustments as required by Item 402(v) of Regulation S-K as described in Note (3) below. |

  87. PAY VERSUS PERFORMANCE

    | (3) CAP reflects the exclusions and inclusions of equity awards for the PEO and the other NEOs as set forth below and calculated in accordance with ASC Topic 718. The valuation methodologies and assumptions used to calculate CAP are based on the grant date fair value of these awards as disclosed in the Company’s consolidated financial statements filed with the SEC on Form 10-K for each of the years reflected in the table below: |

  88. PAY VERSUS PERFORMANCE

    Summary Compensation Table Total to CAP Reconciliation for the PEO and the other NEOs:

  89. PAY VERSUS PERFORMANCE

    | | Calculation for PEO | | | | | Calculation (a) of Compensation Actually Paid | Year 2020 | Year 2021 | Year 2022 | Year 2023 | | Summary Compensation Table Total | $2,559,392 | $33,115 | $33,203 | $40,058 | | Less grant date fair value of stock and option awards (b) | (2,531,425) | — | — | — | | Add change in fair value (whether positive or negative) as of vesting date of awards granted in prior fiscal years for which all applicable vesting conditions were satisfied during the fiscal year | 405,161 | 227,074,553 | — | 43,493,063 | | Add change in fair value (whether positive or negative) as of fiscal year-end for unvested and outstanding awards or forfeited awards granted in prior fiscal years | 278,307,576 | 26,502,911 | 13,654,104 | — | | Compensation Actually Paid | $278,740,704 | $253,610,579 | $13,687,307 | $43,533,121 |

  90. PAY VERSUS PERFORMANCE

    | | Calculation for Average of Non-PEOs | | | | | Calculation (a) of Compensation Actually Paid | Year 2020 | Year 2021 | Year 2022 | Year 2023 | | Summary Compensation Table Total | 1,914,694 | $5,634,227 | $4,305,869 | $17,716,938 | | Less grant date fair value of stock and option awards | (1,156,333) | (4,414,658) | (3,502,709) | (16,456,252) | | Add year-end fair value of awards granted during the fiscal year that are outstanding and unvested as of the end of the fiscal year | 469,229 | 3,515,309 | 4,596,869 | 18,641,953 | | Add change in fair value (whether positive or negative) as of vesting date of awards granted in prior fiscal years for which all applicable vesting conditions were satisfied during the fiscal year | 220,174 | 21,247,901 | 51,093 | 5,910,764 | | Add change in fair value (whether positive or negative) as of fiscal year-end for unvested and outstanding awards or forfeited awards granted in prior fiscal years | 30,481,745 | 4,212,082 | (3,359,538) | 2,692,752 | | Compensation Actually Paid | $31,929,509 | $30,194,861 | $2,091,584 | $28,506,155 |

  91. PAY VERSUS PERFORMANCE

    | (a) For the PEO and the other NEOs, for each covered year, fair value of awards that are granted and vest in the same covered fiscal year equals $0, and fair value of awards granted in prior years that are determined to fail to meet the applicable vesting conditions during the covered fiscal year equals $0. |

  92. PAY VERSUS PERFORMANCE

    | (b) The amount shown for 2020 represents the total stock compensation expense for modified shares related to a performance share unit (“PSU”) award for Mr. Smith. |

  93. PAY VERSUS PERFORMANCE

    | (4) Total Shareholder Return (“TSR”) shown in this table utilizes the Russell Midcap Index that we use in the stock performance graph required by Item 201(e) of Regulation S-K included in the Company’s consolidated financial statements filed with the SEC on Form 10-K for each of the years reflected in the table above. The comparison assumes $100 was invested for the period starting December 31, 2020 through December 31 of the applicable fiscal year in each of the Company’s common stock and the Russell Midcap Index. All dollar values assume reinvestment of the pre-tax value of dividends paid by companies included in the Russell Midcap Index. The historical stock price performance of our common stock shown is not necessarily indicative of future stock price performance. |

  94. PAY VERSUS PERFORMANCE

    | (5) Pursuant to Item 402(v) of Regulation S-K under the Exchange Act, we determined Adjusted EBITDA to be the most important financial performance measure used to link Company performance to CAP for our PEO and our other NEOs in 2023. This performance measure may not have been the most important financial performance measure for years 2022 and 2021 and we may determine a different financial performance measure to be the most important such measure in future years. Adjusted EBITDA is defined as earnings before interest expense, investment interest income, income taxes, depreciation, amortization, non-cash stock-based compensation expense, fair value adjustments to strategic investments and marketable securities, transaction costs related to acquisitions and investments, and other unusual, non-recurring pre-tax items that are not considered representative of our underlying operating performance. For a reconciliation of Adjusted EBITDA to earnings, see “Reconciliation to Non-GAAP Measures.” |

  95. PAY VERSUS PERFORMANCE

    Pay Versus Performance Relationship Descriptions: Figure 1: Relationship between Axon’s CAP for PEO and NEOs (Average) vs. cumulative TSR of Axon and the peer group Figure 2: Relationship between Axon’s CAP for PEO and NEOs (Average) vs. Axon’s net income Figure 3: Relationship between Axon’s CAP for PEO and NEOs (Average) vs. Adjusted EBITDA Between 2020 and 2023, we experienced record stock price appreciation and operating performance, which led to appreciation in the value of our 2018 CEO Performance Award and XSU awards granted under our 2019 XSPP. Set forth below is a list of the three most important financial performance measures used to link executive compensation actually paid to our NEOs during 2023 to Company performance:

  96. PAY VERSUS PERFORMANCE

    | ● | Adjusted EBITDA; |

  97. PAY VERSUS PERFORMANCE

    | ● | Revenue; and |

  98. PAY VERSUS PERFORMANCE

    | ● | Company stock price. |

  99. 2023 GRANTS OF PLAN-BASED AWARDS

    2023 GRANTS OF PLAN-BASED AWARDS The following table shows information about awards made under various compensation plans during 2023:

  100. 2023 GRANTS OF PLAN-BASED AWARDS

    | | | | | | All other | | | | | | | | stock | | | | | Estimated future payouts under | | | awards: | Grant date | | | | non-equity incentive | | | number of | fair | | | | plan awards | | | shares of | value of stock | | | Grant | Threshold | Target | Maximum | stock or | awards (1) | | Name | Date | ($) | ($) | ($) | units (#) | ($) | | Joshua M. Isner | 9/7/2023(2) | — | — | — | 95,223 | 20,573,881 | | | 12/22/2023(3) | — | — | — | 36,219 | 9,381,808 | | | | 306,250 | 500,000 | 750,000(5) | — | — | | Brittany Bagley | 9/7/2023(2) | — | — | — | 24,155 | 5,218,929 | | | 12/22/2023(3) | — | — | — | 14,337 | 3,713,713 | | | | 367,500 | 600,000 | 900,000(5) | — | — | | Jeffrey C. Kunins | 9/7/2023(2) | — | — | — | 36,746 | 7,939,341 | | | 12/22/2023(3) | — | — | — | 4,691 | 1,215,110 | | | 12/22/2023(4) | — | — | — | 5,119 | 1,325,975 | | | | 214,375 | 350,000 | 525,000(5) | | |

  101. 2023 GRANTS OF PLAN-BASED AWARDS

    | (1) Grant date fair value of the RSUs and the Contingent RSUs is computed in accordance with ASC Topic 718. The fair value of each RSU is the closing price of our common stock on the date of grant. The assumptions used in the calculations of the grant date fair values for such awards are included in Note 1 to our consolidated financial statements for the fiscal year ended December 31, 2023 within our 2023 Annual Report. |

  102. 2023 GRANTS OF PLAN-BASED AWARDS

    | (2) Ms. Bagley and Messrs. Isner and Kunins were granted service-based RSUs awards in connection with their promotions. The number of RSUs granted was calculated by using $194.58, which was the closing price of a share of the Company’s common stock on July 3, 2023, to align with their promotions. |

  103. 2023 GRANTS OF PLAN-BASED AWARDS

    Ms. Bagley’s award will vest as to 6,167 RSUs on the first anniversary of the grant date, as to 1,542 RSUs on August 13, 2025, and as to 16,446 RSUs on August 13, 2026, subject to continued service through each vesting date to catch up to her target compensation rate. Mr. Isner’s award will vest as to 34,887 RSUs on the first anniversary of the grant date, as to 27,856 RSUs on August 13, 2025, and as to 32,480 RSUs on August 13, 2026, subject to continued service through each vesting date to catch up to his target compensation rate. Mr. Kunins’ award will vest as to 11,306 RSUs on the first anniversary of the grant date, as to 11,307 RSUs on August 13, 2025, and as to 14,133 RSUs on August 13, 2026, subject to continued service through each vesting date to catch up to his target compensation rate.

  104. 2023 GRANTS OF PLAN-BASED AWARDS

    | (3) On December 18, 2023, the Compensation Committee approved, effective December 22, 2023, grants to Ms. Bagley and Messrs. Isner and Kunins of Contingent RSUs that will only vest if the 2024 Employee XSP is not approved by shareholders. The number of Contingent RSUs granted was calculated by using a price per share of $220.88, which was the 90-day volume weighted average price of a share of the Company’s common stock as of December 21, 2023 (the day before the grant date). |

  105. 2023 GRANTS OF PLAN-BASED AWARDS

    XSUs granted pursuant to the 2024 Employee XSP are not considered to have been granted in 2023 for financial accounting purposes.

  106. 2023 GRANTS OF PLAN-BASED AWARDS

    | (4) Mr. Kunin’s award will vest as to one-third of the RSUs on December 22, 2024, one-third of the RSUs on August 13, 2025, and as to one-third of the RSUs on August 13, 2026, subject to continued service through each vesting date. The number of RSUs granted were calculated by using $194.58, which was the closing price of a share of the Company’s common stock on July 3, 2023, to align with his promotion. |

  107. 2023 GRANTS OF PLAN-BASED AWARDS

    | (5) Payouts under the 2024 annual cash incentive program are based on the achievement of annual financial and operational goals, including goals related to revenue, Adjusted EBITDA margin, new market bookings and new product adoption. Actual awards earned in 2023 were included in the non-equity incentive plan compensation column in the 2023 Summary Compensation Table. See further discussion under “Executive Compensation—Compensation Discussion and Analysis—Fiscal 2023 Annual Cash Incentive Program Payouts.” |

  108. OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR-END

    OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR-END The following table includes certain information with respect to all outstanding equity awards previously awarded to the NEOs as of December 31, 2023.

  109. OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR-END

    | | Option Awards | | | | Stock Awards | | | | | | | Equity | | | | | | Equity Incentive | | | | Incentive Plan | | | Number of | Market | Equity Incentive | Plan Awards: | | | | Awards: | | | Shares or | Value | Plan Awards: | Market or Payout | | | Number of | Number of | | | Units | of Shares | Number of | Value of Unearned | | | Securities | Securities | | | of Stock | or Units | Unearned Shares, | Shares, Units or | | | Underlying | Underlying | Option | | That | of Stock | Units or Other | Other Rights | | | Unexercised | Unexercised | Exercise | Option | Have Not | That Have | Rights That Have | That Have Not | | | Options | Unearned | Price | Expiration | Vested | Not Vested | Not Vested | Vested | | Name | Exercisable (#) | Options (#) | ($) | Date | (#) | ($) | (#) | ($) | | Patrick W. Smith | 530,931(1) | — | 28.58 | 2/26/28 | | | — | — | | Joshua M. Isner | | — | — | — | | | — | — | | | | | | | 925(2) | 238,955 | | | | | | | | | 1,464(3) | 378,195 | | | | | | | | | 2,259(3) | 583,567 | | | | | | | | | 3,171(4) | 819,164 | | | | | | | | | 7,904(5) | 2,041,840 | | | | | | | | | 95,223(6) | 24,598,958 | | | | | | | | | 36,219(7) | 9,356,454 | | | | Brittany Bagley | | — | — | — | | | — | — | | | | | | | 45,576(8) | 11,773,648 | | | | | | | | | 16,554(9) | 4,276,395 | | | | | | | | | 24,155(6) | 6,239,961 | | | | | | | | | 14,337(7) | 3,703,677 | | | | Jeffrey C. Kunins | | — | — | — | | | — | — | | | | | | | 837(3) | 216,222 | | | | | | | | | 550(3) | 142,082 | | | | | | | | | 2,259(3) | 583,567 | | | | | | | | | 5,928(5) | 1,531,380 | | | | | | | | | 36,746(6) | 9,492,594 | | | | | | | | | 4,691(7) | 1,211,826 | | | | | | | | | 5,119(10) | 1,322,391 | | |

  110. OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR-END

    | (1) This grant was intended to compensate Mr. Smith over its 10-year term and to become vested as to all shares subject to it only if both market capitalization and operational goals were attained during such 10-year period. 1/12th of the total number of shares subject to the options became vested and exercisable upon certification by the Compensation Committee that both: (i) one of the market capitalization goals was achieved; and (ii) one of 16 specified internal operational goals relating to financial results was attained. As of December 31, 2023, all 12 tranches have been achieved and certified by the Compensation Committee. See “Executive Compensation—Compensation Discussion and Analysis— Components of Executive Compensation—2018 CEO Performance Award.” |

  111. OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR-END

    | (2) This stock award vested two thirds in June 2023 and will vest as to the remaining one third in June 2024. |

  112. OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR-END

    | (3) These stock awards vest at annual intervals over a three-year period and become fully vested in December 2024. |

  113. OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR-END

    | (4) This stock award vests at annual intervals over a three-year period and becomes fully vested in June 2025. |

  114. OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR-END

    | (5) These stock awards vest at annual intervals over a three-year period and become fully vested in December 2025. |

  115. OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR-END

    | (6) These stock awards vest at annual intervals over a three-year period and become fully vested in August 2026. |

  116. OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR-END

    | (7) These stock awards remain outstanding only if the 2024 Employee XSP is not approved by shareholders and will vest one-third upon the first anniversary of the grant date and at quarterly intervals thereafter. These awards will become fully vested in November 2026. |

  117. OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR-END

    XSUs granted pursuant to the 2024 CEO Performance Award and the 2024 Employee XSP are not considered to have been granted in 2023 for financial accounting purposes.

  118. OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR-END

    | (8) This stock award vests at annual intervals over a three-year period and becomes fully vested in September 2025. |

  119. OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR-END

    | (9) This stock award vests one third in September 2023 and the remaining two thirds vest in eight equal quarterly instalments until fully vested in September 2025. |

  120. OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR-END

    | (10) This stock award will vest one-third in December 2024, one-third in August 2025 and the final one-third in August 2026. |

  121. 2023 OPTION EXERCISES AND STOCK VESTED

    2023 OPTION EXERCISES AND STOCK VESTED The following table provides information related to option exercises and vested stock awards for each NEO during the year ended December 31, 2023:

  122. 2023 OPTION EXERCISES AND STOCK VESTED

    | | Option Awards | | | | Number of | | | | Shares | | | | Acquired on | Value Realized on | | Name | Exercise (#) | Exercise ($) | | Patrick W. Smith | 1,907,026 | $322,985,235 |

  123. 2023 OPTION EXERCISES AND STOCK VESTED

    The option awards exercised by Mr. Smith in 2023 related solely to the 2018 CEO Performance Award, and the net shares are subject to a 2.5 year post-exercise holding period.

  124. 2023 OPTION EXERCISES AND STOCK VESTED

    | | Stock Awards | | | | Number of | | | | Shares | | | | Acquired upon | Value Realized on | | Name | Vesting (#) | Vesting ($) | | Patrick W. Smith | 15 | $3,106 | | Joshua M. Isner | 171,390 | 35,589,910 | | Brittany Bagley | 75,458 | 14,469,594 | | Jeffrey C. Kunins | 125,351 | 26,062,409 |

  125. 2023 OPTION EXERCISES AND STOCK VESTED

    Some of the stock awards that vested in 2023 were related to the 2019 XSPP, as a result of the attainment of the final three of the 12 award tranches. The net shares are subject to a minimum 2.5 year holding period following the goal attainment date. The number of shares acquired upon vesting and the value realized upon vesting were as follows:

  126. 2023 OPTION EXERCISES AND STOCK VESTED

    | | XSU Awards | | | | Number of | | | | Shares | | | | Acquired upon | Value Realized on | | Name | Vesting (#) | Vesting ($) | | Patrick W. Smith | 15 | $3,106 | | Joshua M. Isner | 149,649 | 30,991,809 | | Brittany Bagley | 42,996 | 8,152,472 | | Jeffrey C. Kunins | 108,000 | 22,366,440 |

  127. 2023 NONQUALIFIED DEFERRED COMPENSATION

    2023 NONQUALIFIED DEFERRED COMPENSATION On July 1, 2013, the Company adopted our Deferred Compensation Plan. The Deferred Compensation Plan allows eligible executives, key employees and non-employee directors to elect to defer the receipt and taxation of a portion of their compensation. Compensation, as defined in the Deferred Compensation Plan, is comprised of base salary, bonus, commission, director fees and such other cash or equity-based compensation approved by the Compensation Committee. Participants may elect to defer up to 80% of their base salary and up to 100% of other types of compensation. Participants are 100% vested at all times in amounts deferred pursuant to the Deferred Compensation Plan. All gains or losses are allocated fully to plan participants, and the Company does not guarantee a rate of return on deferred balances. There were no above-market returns for participants in the Deferred Compensation Plan. The following table provides information on NEO participation in the Deferred Compensation Plan:

  128. 2023 NONQUALIFIED DEFERRED COMPENSATION

    | | Executive | Registrant | Aggregate | Aggregate | | | | Contributions in | Contributions in | Earnings in Last | Withdrawals/ | Aggregate Balance at | | | Last FY (1) | Last FY (1)(2) | FY (2)(3) | Distributions | Last FYE (4) | | Name | ($) | ($) | ($) | ($) | ($) | | Joshua M. Isner | — | — | 96,333 | (502,494) | 134,914 |

  129. 2023 NONQUALIFIED DEFERRED COMPENSATION

    | (1) No executive contributions or Company contributions were made in the last fiscal year. |

  130. 2023 NONQUALIFIED DEFERRED COMPENSATION

    | (2) The Company does not make discretionary payments to the Deferred Compensation Plan but does make a restorative 401(k) match contribution to participants as their eligible wages for 401(k) purposes is net of contributions made to the Deferred Compensation Plan. |

  131. 2023 NONQUALIFIED DEFERRED COMPENSATION

    | (3) Aggregate earnings reflected represent deemed investment earnings from voluntary deferrals and Company contributions, as applicable. No amounts included in aggregate earnings are reported in the 2023 Summary Compensation Table because the Deferred Compensation Plan does not provide for above-market or preferential earnings. |

  132. 2023 NONQUALIFIED DEFERRED COMPENSATION

    | (4) Of the amount reflected in this column, $436,508 was previously reported as compensation in the Summary Compensation Table for 2021 and previous years and $600,152 has been reported as aggregate withdrawals and distributions for 2023 and previous years. No executive contributions or Company contributions were made in 2022 and 2023. |

  133. POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL

    POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL Pursuant to the employment agreements with our NEOs (other than our CEO), the Company may terminate each of the NEOs with or without cause. The conditions or events triggering the payment of severance benefits, which are payable in substantially equal installments in accordance with the Company’s standard payroll practices and applicable law, include the executive’s termination without cause, termination in certain circumstances in connection with a change in control of the Company (i.e., double-trigger), and death or disability. Conditions to the payment of severance benefits include covenants relating to assignment of inventions, nondisclosure of Company confidential information, and non-competition with the Company for a period of 12 months after termination of employment. The severance benefit amounts with respect to the above triggering events were determined based on competitive practices. The Company agreed to pay these variable amounts of compensation as severance benefits in order to attract and retain executive officers. The table below depicts the severance benefits payable to each of the NEOs (other than our CEO) under the conditions indicated:

  134. POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL

    | Termination for Cause | Termination without Cause | | Termination By Executive Within 36 Months Following a Change in Control For Good Reason or by the Company Without Cause Six Months Prior to Change in Control at the Request of a Third-Party Purchaser (“Change in Control”) | | Death or Disability | | Earned but unpaid salary and benefits | 12 months’ salary(1); annual target bonus for the year in which termination occurs; time-based RSUs vesting during notice and severance period continue to vest | 36 months’ salary; pro rata portion of annual target bonus for the year in which termination occurs; 12 months’ COBRA; time- and performance-based RSUs at target levels vest | | 18 months’ salary; pro rata portion of annual target bonus for the year in which termination occurs; time- and performance-based RSUs at target levels vest | |

  135. POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL

    (1)The payment of 12 months’ salary includes an 11-month notice period and a cash payment equal to one month’s base salary. The table below reflects the severance benefits that would be provided to each of the NEOs (other than our CEO) assuming the notice of intent to terminate such executive’s employment occurred on December 31, 2023. The following table excludes the deferred compensation amounts that would also be payable to Mr. Isner (see “Executive Compensation—2023 Nonqualified Deferred Compensation”).

  136. POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL

    | | Voluntary | | Termination | | | | | Termination | Termination | without | Change in | Death or | | | By Executive | for Cause | Cause | Control | Disability | | Patrick W. Smith | | | | | | | Stock Awards (4) | $— | $— | $— | $— | $— | | Total | $— | $— | $— | $— | $— | | Joshua M. Isner | | | | | | | Severance Payments (1) | $— | $— | $500,000 | $1,500,000 | $750,000 | | Annual Cash Incentive Plan (2) | — | — | 500,000 | 500,000 | 500,000 | | Benefits (3) | — | — | — | 21,646 | — | | Stock Awards (4) | — | — | 16,322,064 | 38,017,134 | 38,017,134 | | Total | $— | $— | $17,322,064 | $40,038,780 | $39,267,134 | | Brittany Bagley | | | | | | | Severance Payments (1) | $— | $— | $450,000 | $1,350,000 | $675,000 | | Annual Cash Incentive Plan (2) | — | — | 600,000 | 600,000 | 600,000 | | Benefits (3) | — | — | — | 21,646 | — | | Stock Awards (4) | — | — | 10,830,227 | 25,993,681 | 25,993,681 | | Total | $— | $— | $11,880,227 | $27,965,327 | $27,268,681 | | Jeffrey C. Kunins | | | | | | | Severance Payments (1) | $— | $— | $350,000 | $1,050,000 | $525,000 | | Annual Cash Incentive Plan (2) | — | — | 350,000 | 350,000 | 350,000 | | Benefits (3) | — | — | — | 21,646 | — | | Stock Awards (4) | — | — | 5,675,252 | 14,500,063 | 14,500,063 | | Total | $— | $— | $6,375,252 | $15,921,709 | $15,375,063 |

  137. POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL

    | (1) Represents 12 months’ base salary for termination without cause (comprised of an 11-month notice period and 1 month’s base salary), 36 months’ base salary for Change in Control, and 18 months’ base salary for termination due to death or disability. |

  138. POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL

    | (2) Represents target bonus for the calendar year in which the effective date of termination occurs; for Change of Control and termination due to death or disability, represents target bonus pro-rated through termination date. |

  139. POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL

    | (3) Represents 12 months of payment of medical, dental and vision insurance premiums for each NEO. |

  140. POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL

    | (4) The value of time- and performance-based RSUs vesting or acceleration is equal to the most available closing market price of a share of the Company’s common stock as of December 31, 2023 ($258.33), multiplied by the number of units that would vest. |

  141. PAY RATIO OF CEO COMPENSATION TO MEDIAN EMPLOYEE COMPENSATION

    PAY RATIO OF CEO COMPENSATION TO MEDIAN EMPLOYEE COMPENSATION The Company’s compensation programs are designed with the goal of ensuring its compensation programs are fair, equitable, globally compliant and aligned with its business objectives. Our CEO, Patrick W. Smith, previously agreed to a compensation arrangement in the form of the 2018 CEO Performance Award, which was approved by shareholders in May 2018, which vested based solely on attainment of both market capitalization and internal operational goals. As described elsewhere in this proxy statement, Mr. Smith does not receive significant compensation or benefits other than the 2018 CEO Performance Award and, subject to shareholder approval, the 2024 CEO Performance Award. We are providing a ratio of (i) Mr. Smith’s 2023 annual total compensation to (ii) the median of the 2023 annual total compensation of all Axon employees other than Mr. Smith, calculated pursuant to the disclosure requirements of the Summary Compensation Table above as if the median compensated employee was a named executive officer. Because of the treatment of the 2018 CEO Performance Award as compensation for Mr. Smith in 2018 for purposes of the Summary Compensation Table, there may be a significant disconnect between what is reported as compensation for Mr. Smith in a given year in the Summary Compensation Table and the value actually realized as compensation in that year or over a period of time. See “Executive Compensation—Compensation Discussion and Analysis—Components of Executive Compensation—Long-Term Performance-Based Equity Compensation—2018 CEO Performance Award.” Mr. Smith’s annual total compensation, as reported in the 2023 Summary Compensation Table, was $40,058 for 2023, and the median 2023 annual total compensation of all other employees was $107,710. Consequently, the applicable ratio of such amounts for 2023 was 0.37:1. Our methodology for identifying the median of the 2023 annual total compensation for each of our employees other than Mr. Smith was as follows: ● We determined that, as of December 31, 2023, Axon and all of our subsidiaries had 3,670 qualifying individuals (full-time, part-time, and temporary employees other than Mr. Smith), of which 18% were based outside of the United States and 18% were production-line employees. ● We did not include in the population of qualifying individuals any employees of staffing agencies whose compensation is determined by those agencies. ● We applied the requirements and assumptions required for the Summary Compensation Table for each of such individuals as if he or she was a named executive officer to calculate the total annual compensation, including base salary or wages, performance-based commission payments, and equity awards based on their grant date fair values. ● We converted any payment earned or paid in a foreign currency to U.S. dollars using the average of the prevailing conversion rates for 2023. ● We selected the median of all total annual compensation amounts calculated in accordance with the foregoing. The SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, exclusions and assumptions that reflect their compensation practices. As such, the pay ratio reported above may not be comparable to the pay ratio reported by other companies, even those in a related industry or of a similar size and scope. Other companies may have different employment practices, regional demographics or may utilize different methodologies, exclusions and assumptions in calculating their pay ratios.

  142. PROPOSAL NO. 1 - ELECTION OF DIRECTORS

    PROPOSAL NO. 1 - ELECTION OF DIRECTORS The Board is elected by and accountable to the shareholders to oversee their interest in the long-term health and the overall success of the Company’s business and its financial strength. The Board serves as the ultimate decision-making body of the Company except for those matters reserved to, or shared with, the shareholders. The Board selects and oversees the members of senior management, who are charged by the Board with conducting the business of the Company.

  143. General Information

    | ● | contains an annual $750,000 limit on non-employee director compensation; |