amount of the Executives annual incentive compensation for any year, if any, shall be determined in the sole discretion of the Board or the Compensation Committee, subject to the terms of any applicable incentive compensation plan that may be in effect from time to time. Annual incentive compensation shall be paid to the Executive no later than March 15 of the year following the year in which it is earned. To earn any annual incentive compensation, the Executive must be employed by the Company for the entire preceding calendar year. If this Agreement is entered into in connection with the commencement of the Executives employment with the Company, the Executives Target Incentive Compensation, if any, for such year shall be prorated depending on when in the year the Executive first date of employment with the Company occurs.
(c) Expenses. The Executive shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by the Executive during the Term in performing services hereunder, in accordance with and subject to the policies and procedures then in effect and established by the Company for its executive officers.
(d) Other Benefits. During the Term, the Executive shall be eligible to participate in or receive benefits under the Companys employee benefit plans in effect from time to time on a basis no less favorable than other senior management employees of the Company, subject to the terms and conditions of such plans.
(e) Vacations. The Executive shall be eligible for vacation time in accordance with, and subject to, the Companys vacation policy as in effect from time to time. The Executive shall also be entitled to all paid holidays given by the Company to its executives.
(f) Equity. The Executive will be granted options to purchase shares of the Companys common stock (the Options) as follows:
(i) If the IPO becomes effective before November 1, 2020, the Options:
(A) Will be for such number of shares as is equal to 3.5% of the Companys outstanding common stock, calculated on a Fully Diluted Basis (as defined below), and after giving effect to the grant of such Options and any other options granted on that date;
(B) Will be granted as of the effective date of the Companys registration statement for the IPO, with an exercise price per share equal to the public offering price in the IPO;
(C) Will provide that, if the overallotment option is not ultimately exercised, 15% of the Options shall automatically be forfeited and cancelled;
(ii) If the IPO has not become effective before November 1, 2020, the Executive:
(A) Will be granted an initial option on or promptly after such date for such number of shares as is equal to 3.5% of the Companys outstanding common stock as of the date of grant, calculated on a Fully Diluted Basis (and after giving effect to the grant of such initial option and any other options granted on that date), at an exercise price equal to the then fair value of the common stock as of such grant date, as determined by the Board of Directors in accordance with their usual procedures as a private company;
(B) Upon the later completion of the IPO, the Executive will be granted an additional option for such number of additional shares as is equal to 3.5% of the shares ultimately issued in the IPO, assuming the exercise of the underwriters overallotment option, such grant to be made effective on the effective date of the registration statement for such IPO, at an exercise price equal to the IPO price, with 15% of such grant being automatically forfeited and cancelled if the overallotment option is not ultimately exercised.