Equity Compensation
Equity awards will be granted under the Company’s 2021 Equity Incentive Plan, as it may be amended from time to time and including any successor plan thereto (the “Plan”). All stock options granted under this Director Compensation Policy will be Nonstatutory Stock Options (as defined in the Plan) that contain the following terms (i) an exercise price per share equal to 100% of the Fair Market Value (as defined in the Plan) of the underlying Common Stock on the date of grant, (ii) a term of ten years from the date of grant (subject to earlier termination as provided in the Plan), (iii) vesting acceleration in full upon a Change in Control (as defined in the Plan) or upon the Eligible Director’s death or Disability (as defined in the Plan), (iv) a post-termination exercise period for vested options upon the Eligible Director’s termination of Continuous Service other than for Cause (as such terms are defined in the Plan) of three years from the date of termination (subject to earlier termination as provided in the Plan or as a result of the ten year maximum term of the option).
(a) Automatic Equity Grants.
(i) New Directors. Without any further action of the Board, each Eligible Director who, after the IPO Date, is elected or appointed for the first time to join the Board will automatically, upon the date of his or her initial election or appointment to the Board (or, if such date is not a market trading day, the first market trading day thereafter) (the “Start Date”), be granted a Nonstatutory Stock Option to purchase 12,367 shares common stock of the Company (the “Initial Option Grant”) which will vest in a series of 36 equal monthly installments over the three-year period measured from the Start Date, subject to the Eligible Director’s Continuous Service (as defined in the Plan) through each such date. Eligible Directors whose initial election or appointment to the Board occurred within the 30 day period prior to the IPO Date shall receive an Initial Option Grant on the IPO Date, without further action by the Board, and the exercise price per share for such option grants shall be the IPO Price.
In addition to the Initial Option Grant, if such Eligible Director’s Start Date occurs on the date of the Company’s annual meeting of stockholders, such Eligible Director will automatically, upon the date of such annual meeting of stockholders, be granted the Annual Option Grant described in (a)(ii) below. If such Eligible Director’s Start Date occurs on a date other than the date of the Company’s the annual meeting of stockholders, such Eligible Director will automatically, upon the Start Date, be granted the Annual Option Grant described in (a)(ii) below, prorated based on the number of full calendar months between the Start Date and the Company’s next annual meeting of stockholders (the “Prorated Annual Grant”). Each Prorated Annual Grant will vest in equal monthly installments from the Start Date through the date of the Company’s next annual meeting of stockholders. For purposes of calculating the Prorated Annual Grant and its vesting schedule, the Company’s annual meeting of stockholders shall be assumed to occur in May of each year (beginning with and including May 2022), irrespective of when the Company’s annual meeting of stockholders actually occurs. For example, if an Eligible Director was initially appointed or elected to the Board on October 15, 2022, then such Eligible Director would receive a Prorated Annual Grant on October 15, 2022 to purchase 6,184 shares of common stock (50% of the Annual Option Grant) that vests in six equal monthly installments from November 15, 2022 through April 15, 2023. For clarity, for any Eligible Directors whose Start Date occurs in 2021 prior to May 2021, the Prorated Annual Grant will be larger than the Annual Option Grant as a result of the Company not expecting to hold an annual meeting of stockholders in 2021.
Eligible Directors whose Start Date occurred within the 30 day period prior to the IPO Date shall receive a Prorated Option Grant on the IPO Date, without further action by the Board, and the exercise price per share for such option grants shall be the IPO Price.
(ii) Continuing Directors. Without any further action of the Board, at the close of business on the date of each annual meeting of Company stockholders following the IPO Date (the “Grant Date”), each person who is then an Eligible Director will, unless the Board or the Compensation Committee of the Board determines otherwise prior to such time, automatically be granted a Nonstatutory Stock Option to purchase 12,367 shares of common stock (the “Annual Option Grant”). Each Annual Option Grant will vest in a series of 12 equal monthly installments following the date of grant, provided that, in any event the Annual Option Grant will become fully vested on the day before the Company’s next annual meeting of stockholders following the Grant Date, subject to the Eligible Director’s Continuous Service (as defined in the Plan) through each such date.
(c) Non-Employee Director Compensation Limit. Notwithstanding the foregoing, the aggregate value of all compensation granted or paid, as applicable, to any individual for service as a Non-Employee Director (as defined in the Plan) shall in no event exceed the limits set forth in Section 3(d) of the Plan.
(d) Remaining Terms. The remaining terms and conditions of each award, including transferability, will be as set forth in the Plan and the Company’s Standard Option Grant Package applicable to Non-Employee Directors, in the forms adopted from time to time by the Board or Compensation Committee of the Board.
