2. Compensation and Related Matters.
(a) Base Salary. The Executives annual base salary shall be $420,000.00, which is subject to review and redetermination by the Companys Board or the Compensation Committee thereof. The base salary in effect at any given time is referred to herein as Base Salary. The Base Salary shall be payable in a manner that is consistent with the Companys usual payroll practices for senior executives.
(b) Incentive Compensation. During the Term, the Executive shall be eligible to receive cash incentive compensation as determined by and in the sole discretion of the Board or the Compensation Committee from time to time. The Executives target annual incentive compensation shall be 40% of his or her Base Salary, as may be redetermined from time to time (the Target Incentive Compensation). To earn incentive compensation, the Executive must be employed by the Company on the day such incentive compensation is paid.
(c) Expenses. The Executive shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by him or her during the Term in performing services hereunder, in accordance with the policies and procedures then in effect and established by the Company for its senior executive officers.
(d) Other Benefits. During the Term, the Executive shall be entitled to continue to participate in or receive benefits under the Companys employee benefit plans in effect from time to time, including paid sick time under applicable law, subject to the terms of such plans and to the Companys ability to amend, modify, replace or terminate such plans and programs.
(e) Vacations. During the Term, the Executive shall be entitled to take paid vacation in accordance with the Companys vacation policy for executives, as may be 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 equity awards provided, however, and notwithstanding anything to the contrary in the Equity Documents, Section 6(a)(ii) of this Agreement shall apply in the event of a termination by the Company without Cause or by the Executive for Good Reason, in either event within the Change in Control Period (as such terms are defined below). Subject to the approval of the Companys Board of Directors, in connection with the commencement of the Executives employment, the Company will grant the Executive a stock option (the Option) for the purchase of 435,000 shares of the Companys common stock (with such number to be proportionally adjusted for any stock split, consolidation or other share capital adjustment occurring following the date of this letter) at an exercise or purchase price equal to the fair market value of the Companys common stock on the date of grant or issuance, subject to the standard terms and conditions of Magenta Therapeutics, Inc.s Stock Incentive Plan and form of Stock Option Agreement, including vesting, subject to continued employment. The Option shall vest over four years, with 25% of the Option vesting on the first anniversary of the commencement date of the Executives employment, and the remainder of the Option vesting on a monthly basis thereafter, in 36 equal monthly installments, all subject to the Executives continued employment.