(c) Annual Option. Subject to Section 11 of the Plan, on the date of each annual meeting of the Companys stockholders following the Effective Date (each, an Annual Meeting), each Outside Director will be automatically granted a nonstatutory stock option (an Annual Option) to purchase 20,000 Shares. Each Annual Option will vest on as to 1/12th of the Shares subject to the Annual Option each month after the date the Annual Option is granted, provided that the Annual Option will vest in full on the earlier of (i) the 12-month anniversary of the date of grant, or (ii) the date of the next regularly scheduled Annual Meeting, in each case subject to the Outside Director continuing to be a Service Provider through the applicable vesting date. Each Annual Option will become fully vested and exercisable immediately prior to a Change in Control, subject to the Outside Director continuing to be a Service Provider.
(d) Additional Terms of Initial Options and Annual Options. The terms and conditions of each Initial Option and Annual Option will be as follows:
(i) The term of each Initial Option and Annual Option will be ten years, subject to earlier termination as provided in the Plan.
(ii) Each Initial Option and Annual Option will have an exercise price per Share equal to 100% of the Fair Market Value per Share on the grant date.
(e) Value. For purposes of this Policy, Value means the grant date fair value (determined in accordance with U.S. generally accepted accounting principles), or such other methodology the Board may determine prior to the grant of the Initial Option or Annual Option becoming effective, as applicable.
In the event of a Change in Control, each Outside Director will fully vest in his or her outstanding Company equity awards, including any Initial Option or Annual Option, provided that the Outside Director continues to be an Outside Director through such date.
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ANNUAL COMPENSATION LIMIT
No Outside Director may be paid, issued or granted, in any fiscal year, cash compensation and Awards with an aggregate value greater than $750,000, increased to $1,000,000 in the fiscal year of his or her initial service as an Outside Director (with the value of each Award based on its Grant Value for purposes of the limitation under this Section 4). Any cash compensation paid or Awards granted to an individual for his or her services as an Employee, or for his or her services as a Consultant (other than as an Outside Director), will not count for purposes of the limitation under this Section 4.
Each Outside Directors reasonable, customary and documented travel expenses to Board meetings will be reimbursed by the Company.