(b) Upon Appointment or Election of New Director. Without any further action of the Board, each person who, after the Effective Date, is elected or appointed for the first time to be a Eligible Director on a date other than at an annual stockholder meeting will automatically, upon the date of his or her initial election or appointment to be a Eligible Director (except as provided in Section 2.5), be granted an RSU for that number of shares of Company common stock equal to (i) $200,000 multiplied by a fraction, the numerator of which is the number of days between such date of appointment or election and the next June 1, divided by (ii) the Share Price, rounded to the nearest whole share (a Pro-Rated Annual Grant). Each Pro-Rated Annual Grant will vest in a single installment on the earlier to occur of (a) the close of business on the day before the Companys next annual meeting of stockholders and (b) the next June 1, provided that the Eligible Director continues to be an Eligible Director on such vesting date.
2.3 Vesting; Change in Control. Notwithstanding the foregoing vesting schedules, for each Eligible Director in office as of immediately prior to the closing of a Change in Control, the shares subject to his or her then-outstanding equity awards that were granted pursuant to this Policy will become fully vested immediately prior to the closing of such Change in Control. In addition, Annual Grants and Pro-Rated Annual Grants will vest upon the directors death or Disability. Disability means that the director is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment, which impairment can be expected to result in death or that has lasted or can be expected to last for a continuous period of not less than 12 months, as provided in Section 22(e)(3) of the Internal Revenue Code of 1986, as amended, and will be determined by the Board on the basis of such medical evidence as the Board deems warranted under the circumstances.
2.4 Share Price. For any RSU grant to be made under this Policy, the Share Price shall be the average closing price of the Companys common stock, as reported on the primary U.S. exchange for such common stock, over the 30 calendar day period ending five calendar days before the the date of grant.
2.5 Remaining Terms. The remaining terms and conditions of each RSU grant under this Policy, including transferability, will be as set forth in the Companys standard RSU grant notice and agreement, in the form adopted from time to time by the Board or its Compensation Committee. In the event any grant date set forth above for any RSU grant to be made under this Policy is not a trading day on the primary U.S. exchange for the Companys common stock (e.g., is a holiday or on a weekend), then the grant date shall be the next trading day.
The Company will reimburse each Eligible Director for ordinary, necessary and reasonable out-of-pocket travel expenses to cover in-person attendance at and participation in Board and committee meetings; provided that the Eligible Director timely submits to the Company appropriate documentation substantiating such expenses in accordance with the Companys travel and expense policy, as in effect from time to time.
Notwithstanding anything to the contrary in this Policy, all compensation payable under this Policy will be subject to any limits on the maximum amount of Eligible Director compensation set forth in the Plan, as in effect from time to time.