Director Equity Compensation Plan under 2002 Stock Plan for Non-Employee Directors
This agreement outlines a compensation plan for non-employee directors of the company, granting them monthly stock options instead of cash payments for their board service. The number of options is calculated based on a set formula tied to the stock's fair market value, with grants made on the first trading day of each month. Options are fully vested immediately and exercisable at the market price on the grant date. The plan is administered by the Stock Option Committee and automatically renews annually unless changed by the Board.
Exhibit 10.1
Director Equity Compensation Plan
The Board approved a Director Equity Compensation Plan under the Registrant’s existing 2002 Stock Plan (the “Stock Plan”), which was filed with the Securities and Exchange Commission as Exhibit 10.4 to the Registrant’s Form S-1 on March 6, 2002. The Director Equity Compensation Plan provides for a monthly grant of stock options to each non-employee Director of the Registrant in consideration for services provided to the Registrant and subject to the terms and conditions of the Stock Plan. The number of stock options to be granted monthly shall be determined by the following formula: $10,000 / ([Fair Market Value on the date of grant] * 0.25). Each monthly grant shall be made on the first trading day of the month, shall be fully vested upon grant and shall be exercisable at a strike price equal to the Fair Market Value (as defined in the Stock Plan) on the date of grant. The Registrant’s Directors do not currently receive cash compensation for services they provide as Directors or committee members.
This compensation arrangement will be administered on a non-discretionary basis by the Stock Option Committee of the Registrant’s Board of Directors, provided that only the Board may change the amount or terms of future grants. This compensation arrangement will renew each year unless action is taken to the contrary by the Board.
