For clarity, each Outside Director who serves as the chair of a committee shall receive only the additional annual cash fee as the chair of the committee, and not the additional annual cash fee as a member of the committee.
Outside Directors will be eligible to receive all types of Awards (except Incentive Stock Options) under the Plan (or the applicable equity plan in place at the time of grant), including discretionary Awards not covered under this Policy. All grants of Awards to Outside Directors pursuant to Section 2 of this Policy will be automatic and nondiscretionary, except as otherwise provided herein, and will be made in accordance with the following provisions:
(a) No Discretion. No person will have any discretion to select which Outside Directors will be granted any Awards under this Policy or to determine the number of Shares to be covered by such Awards.
(b) Initial Award. Each individual who first becomes an Outside Director following the Effective Date will be granted an Option to purchase 60,000 Shares (an Initial Award) on the date on which such individual first becomes an Outside Director, whether through election by the stockholders of the Company or appointment by the Board to fill a vacancy. Subject to Section 14 of the Plan and Section 3 of this Policy, each Initial Award will vest and become exercisable as to 1/36th of such Initial Award on each monthly anniversary of the commencement of the applicable Outside Directors service as an Outside Director, in each case subject to the Outside Director continuing to be a Service Provider (as defined in the Plan) through such date.
(c) Annual Award. On the date of each annual meeting of the Companys stockholders (the Annual Meeting), each Outside Director will be automatically granted an Option to purchase 20,000 Shares (an Annual Award). Subject to Section 14 of the Plan and Section 3 of this Policy, each Annual Award will vest and become exercisable as to 100% of such Annual Award on the earlier of (i) the one-year anniversary of the date of grant of such Annual Award or (ii) the business day prior to the next Annual Meeting that occurs following the grant of such Annual Award, in each case, subject to the applicable Outside Director continuing to be a Service Provider through such date.
(c) Terms. The terms and conditions of each Initial Award or Annual Award will be as follows:
(i) Exercise Price. The per Share exercise price for an Option granted under this Policy will be one hundred percent (100%) of the Fair Market Value on the grant date.
(ii) Term. The maximum term to expiration of an Option granted under this Policy will be ten (10) years, subject to earlier termination as provided in the Plan.
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 Award or Annual Award, provided that the Outside Director continues to be an Outside Director through such date.