Exhibit 10.18
KLDISCOVERY INC.
NON-EMPLOYEE DIRECTOR COMPENSATION PROGRAM
Non-employee members of the board of directors (the “Board”) of KLDiscovery Inc. (the “Company”) shall receive cash and equity compensation as set forth in thisNon-Employee Director Compensation Program (this “Program”). The cash and equity compensation described in this Program shall be paid or be made, as applicable, automatically and without further action of the Board, to each member of the Board who is not an employee of the Company or any parent or subsidiary of the Company (each, a “Non-Employee Director”) who is entitled to receive such cash or equity compensation, except as otherwise set forth onExhibit A hereto or unless suchNon-Employee Director declines the receipt of such cash or equity compensation by written notice to the Company. This Program shall remain in effect until it is revised or rescinded by further action of the Board. This Program may be amended, modified or terminated by the Board at any time in its sole discretion. The terms and conditions of this Program shall supersede any prior cash and/or equity compensation arrangements for service as a member of the Board between the Company and any of itsNon-Employee Directors, except for equity compensation previously granted to aNon-Employee Director. This Program shall become effective on the date of the closing of the transactions contemplated by that certain Agreement and Plan of Reorganization, dated as of May 20, 2019, by and among the Company (f/k/a/ Pivotal Acquisition Corp.), Pivotal Merger Sub Corp., LD Topco, Inc. and, solely in its capacity as representative of the stockholders of LD Topco, Inc., Carlyle Equity Opportunity GP, L.P. (the “Effective Date”).
CASH COMPENSATION
The schedule of annual retainers (the “Annual Retainers”) for theNon-Employee Directors is as follows:
Position | Amount | |||
Base Board Fee | $ | 30,000 | ||
Lead Independent Director | $ | 45,000 | ||
Chair of Audit Committee | $ | 20,000 | ||
Chair of Compensation Committee | $ | 14,000 | ||
Chair of Nominating and Corporate Governance Committee | $ | 7,500 | ||
Member of Audit Committee(non-Chair) | $ | 10,000 | ||
Member of Compensation Committee(non-Chair) | $ | 7,000 | ||
Member of Nominating and Corporate Governance Committee | $ | 4,000 | ||
For the avoidance of doubt, the Annual Retainers in the table above are additive and aNon-Employee Director shall be eligible to earn an Annual Retainer for each position in which he or she serves. The Annual Retainers shall be earned on a quarterly basis based on a calendar quarter and shall be paid in cash by the Company in arrears not later than the fifteenth (15th) day following the end of each calendar quarter. In the event aNon-Employee Director does not serve as aNon-Employee
Director, or in the applicable position, for an entire calendar quarter, the retainer paid to suchNon-Employee Director shall be prorated for the portion of such calendar quarter actually served as aNon-Employee Director, or in such position, as applicable. In addition, the Annual Retainers will be prorated for the first (1st) calendar quarter in which the Effective Date occurs, which proration will be based on the number of days of the calendar quarter remaining in such quarter after the Effective Date.
EQUITY COMPENSATION
EachNon-Employee Director shall be granted the following awards of Restricted Stock Units (as defined in the Company’s 2019 Incentive Award Plan or any other applicable Company equity incentive plan then-maintained by the Company (the “Equity Plan”)) (each, an “RSU Award”) under and subject to the terms and provisions of the Equity Plan. Each RSU Award shall be granted subject to an award agreement in substantially the form previously approved by the Board, and in the amounts provided as follows:
| Initial RSU Award | A number of Restricted Stock Units equal to the quotient obtained by dividing (x) $350,000 by (y) the Reference Price. | |
| Subsequent RSU Award | A number of Restricted Stock Units equal to the quotient obtained by dividing (x) $175,000 by (y) the Reference Price. | |
For purposes of this Program, the “Reference Price” shall mean the closing sales price of one share of the Company’s common stock on the date of grant.
A. Initial RSU Awards. EachNon-Employee Director who is initially elected or appointed to the Board after the Effective Date shall receive the Initial RSU Award on the date of such initial election or appointment. NoNon-Employee Director shall be granted more than one Initial RSU Award. For the avoidance of doubt, noNon-Employee Director who is serving on the Board on the Effective Date shall receive the Initial RSU Award.
B. Subsequent RSU Awards. ANon-Employee Director who (i) either (A) served as aNon-Employee Director on the Effective Date or (B) has been serving as aNon-Employee Director on the Board for at least six (6) months as of the date of any annual meeting of the Company’s stockholders after the Effective Date and, in either case, (ii) will continue to serve as aNon-Employee Director immediately following such meeting, shall be automatically granted a Subsequent RSU Award on the date of such annual meeting. For the avoidance of doubt, aNon-Employee Director elected for the first (1st) time to the Board at an annual meeting of the Company’s stockholders shall only receive an Initial RSU Award in connection with such election, and shall not receive any Subsequent RSU Award on the date of such meeting as well.
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C. Termination of Employment of Employee Directors. Members of the Board who are employees of the Company or any parent or subsidiary of the Company who subsequently terminate their employment with the Company and any parent or subsidiary of the Company and remain on the Board will not receive an Initial RSU Award, but to the extent that they are otherwise entitled, will receive, after termination of employment with the Company and any parent or subsidiary of the Company, a Subsequent RSU Award.
D. Terms of RSU Awards Granted toNon-Employee Directors.
1. Vesting.
a. Initial RSU Awards. Each Initial RSU Award shall vest and become exercisable in substantially equal installments on each of the first three (3) anniversaries of the date of grant, such that the Initial RSU Award shall be fully vested on the third (3rd) anniversary of the date of grant, subject to theNon-Employee Director continuing in service as aNon-Employee Director through each such vesting date.
b. Subsequent RSU Awards. Each Subsequent RSU Award shall vest in a single installment on the day immediately prior to the date of the next annual meeting of the Company’s stockholders occurring after the date of grant, subject to theNon-Employee Director continuing in service as aNon-Employee Director through such vesting date.
c. Forfeiture of RSU Awards; Change in Control Vesting. Unless the Board otherwise determines, any portion of an Initial RSU Award or Subsequent RSU Award which is unvested at the time of aNon-Employee Director’s termination of service on the Board as aNon-Employee Director shall be immediately forfeited upon such termination of service and shall not thereafter become vested. All of aNon-Employee Director’s Initial RSU Awards and Subsequent RSU Awards shall vest in full immediately prior to the occurrence of a Change in Control (as defined in the Equity Plan), to the extent outstanding at such time.
2. Non-Employee Compensation Limit. Notwithstanding anything in this Program to the contrary, the sum of any cash compensation, or other compensation, and the value (determined as of the grant date in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, or any successor thereto) of RSU Awards granted to aNon-Employee Director as compensation for services as aNon-Employee Director during any fiscal year of the Company may not exceed $750,000 (the “NED Limit”), increased to $1,000,000 in the fiscal year in which the Effective Date occurs or in the fiscal year of aNon-Employee Director’s initial service as aNon-Employee Director. The NED Limit shall be applied to reduce compensation in the following order: (A) reduction in any Initial RSU Award granted during such year; (B) reduction in any Subsequent RSU Award granted during such year; (C) reduction on a prorata basis of any cash or other compensation, payments or benefits that are exempt from Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”) and (D) reduction of any cash or other compensation, payments or benefits otherwise payable to theNon-Employee Director on a prorata basis or such other manner that complies with Section 409A. The Board may make exceptions to the NED Limit in extraordinary circumstances, as the Board may determine in its discretion, provided that theNon-Employee Director receiving such additional compensation may not participate in the decision to award such compensation or in other contemporaneous compensation decisions involvingNon-Employee Directors.
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Exhibit A
William Darman shall not be eligible to participate in this Program.
Richard Williams shall not be eligible to participate in this Program.
Evan Morgan shall not be eligible to receive Annual Retainers under this Program (but will remain eligible to receive equity-based compensation under this Program pursuant to the terms of this Program).
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