(c)Counting. For purposes of this Policy, shares of Common Stock that count toward satisfaction of the Minimum Ownership Requirement shall include (a) any class of equity securities of the Company, in any case whether held (i) directly or indirectly or by or for the benefit of immediate family members; (ii) by trusts for the benefit of such person or such person’s immediate family members, or (iii) in a 401(k) plan, IRA or employee equity purchase or deferred compensation plan; and (b) shares of restricted Common Stock and shares subject to outstanding restricted stock unit awards, in either case, that vest solely based on the passage of time. Shares of Common Stock that count toward satisfaction of the Minimum Ownership Requirement shall not include (x) shares of Common Stock subject to outstanding stock options, whether exercisable or unexercisable; (y) unearned performance-based vesting restricted Common Stock, restricted stock unit awards or other incentive awards; and (z) warrants and all other forms of derivative securities.
Section 3.Compliance.
(a)Compliance Deadline. Each Executive Officer as of the date hereof shall have until [ , 2023]1 to come into compliance with this Policy. Any newly hired or promoted Executive Officer hereafter shall come into compliance with this Policy no later than the fifth anniversary of the Executive Officer’s hire or promotion date. Notwithstanding anything to the contrary, in the event such Executive Officer is elevated to a higher executive position (e.g., Senior Vice President to Executive Vice President or Executive Vice President to CEO), such Executive Officer shall come into compliance with the newly applicable Minimum Ownership Requirement no later than the later of the applicable deadline set forth in the immediately preceding sentences or December 31 of the year in which the fifth anniversary of the date on which such Executive Officer becomes of his or her advancement to such higher position.
(b)Determination of Share Ownership. Each Executive Officer shall certify as to his or her compliance with the Minimum Ownership Requirement during his or her tenure as an Executive Officer of the Company at least once each year (beginning with the year in which these ownership guidelines become applicable to such Executive Officer) in connection with responding to the Company’s annual Director and Officer Questionnaire.
(c)Exceptions. The Minimum Ownership Requirement may be waived, at the sole discretion of the disinterested members of the Board of Directors of the Company (the “Board”), if compliance would create severe hardship for an Executive Officer, or would violate Section 16(b) of the Securities Exchange Act of 1934, as amended or would prevent the Executive Officer from complying with a court order, as in the case of a divorce settlement. An Executive Officer may file notice with the Corporate Secretary to be presented to the Board, advising the Board of the circumstances and describing the extent of the waiver requested. It is expected that these instances will be rare.
(d)Remedies forNon-Compliance. The Compensation Committee of the Board (the “Compensation Committee”) has the authority to review each Executive Officer’s compliance (or progress towards compliance) with this Policy from time to time and, in its sole discretion, to impose such conditions, restrictions or limitations on any Executive Officer as the Compensation Committee determines to be necessary or appropriate in order to achieve the purposes of this Policy. For example, the Compensation Committee may mandate that an Executive Officer retain (and not transfer) all or a portion of any shares delivered to the Executive Officer through the Company’s equity plans or otherwise restrict the Executive Officer’s transfer of previously owned shares.
1 | NTD: To be the fifth anniversary of the IPO. |
2