Spinal Elements Holdings, Inc. Non-Employee Director Compensation Policy
SPINAL ELEMENTS HOLDINGS, INC.
NON-EMPLOYEE DIRECTOR COMPENSATION POLICY
Effective as of the initial public offering (the IPO) of the common stock of Spinal Elements Holdings, Inc. (the Company), each individual who provides services to the Company as a director, other than a director who is employed by the Company or a subsidiary or a director who serves as an investment professional with Kohlberg & Co., L.L.C. (Kohlberg) (but, for the avoidance of doubt, not including any director who serves as an operating partner of Kohlberg, who shall be eligible to receive compensation hereunder) (a Non-Employee Director), shall be entitled to receive the following compensation, subject to the limitations on annual Non-Employee Director compensation set forth in the Companys 2020 Equity Incentive Plan:
Form of Payment
|Annual cash fee||$40,000 ($90,000 for the chairman of the Board of Directors (the Board))|
|Additional annual cash fee for members of the Audit Committee||$10,000 ($20,000 for the Audit Committee chairman)|
|Additional annual cash fee for members of the Compensation Committee||$7,500 ($15,000 for the Compensation Committee chairman)|
|Additional annual cash fee for members of the Nominating and Corporate Governance Committee||$5,000 ($10,000 for the Nominating and Corporate Governance Committee chairman)|
|Equity compensation|| |
Each Non-Employee Director who is first elected or appointed to the Board following the IPO shall, upon his or her initial election or appointment to the Board, be granted an option to purchase shares of the Companys common stock having a grant date fair value, determined in accordance with FASB ASC Topic 718 (or any successor provision) (ASC Topic 718), approximately equal to $230,000 (the Initial Option), such option to vest in 36 equal monthly installments (with the number of shares that vest on any date being rounded down to the nearest whole share and the option becoming vested as to 100% of the shares on the third anniversary of the grant date), subject to the Non-Employee Directors continued service to the Board through each applicable vesting date.
On the date of the first meeting of the Board following each annual meeting of stockholders of the Company, each Non-Employee Director shall be granted an option to purchase shares of the Companys common stock having a grant date fair
value, determined in accordance with ASC Topic 718, approximately equal to $115,000 (the Annual Option), such option to vest in full on the earlier of the first anniversary of the date of grant or the next annual meeting of the stockholders of the Company, subject to the Non-Employee Directors continued service to the Board through the applicable vesting date.
Each option granted to any Non-Employee Director will have a per share exercise price equal to the fair market value of a share of the Companys common stock on the date of grant, have a term of no more than ten (10) years and will be subject to the terms and conditions of the Companys 2020 Equity Incentive Plan (or any successor plan). Upon a Change in Control (as defined in the Companys 2020 Equity Incentive Plan (or as such term or similar term is defined in any successor plan)), each Initial Option and each Annual Option that is then outstanding will vest in full, subject to the Non-Employee Directors continued service to the Board through such Change in Control.
All cash fees shall be payable in arrears on a quarterly basis or upon the earlier resignation or removal of the Non-Employee Director and shall be prorated for any calendar quarter of partial service, based on the number of calendar days the Non-Employee Director was a member of the Board. For the calendar quarter during which the IPO occurs, all annual cash fees shall be prorated based on the number of calendar days the Non-Employee Director was a member of the Board following the IPO.
In addition, Non-Employee Directors will be reimbursed by the Company for reasonable travel and other expenses incurred in connection with the Non-Employee Directors attendance at Board and committee meetings, in accordance with the Companys policies as in effect from time to time.
For the avoidance of doubt, directors who are employees of the Company or one of its subsidiaries and directors who serve as investment professionals with Kohlberg (other than operating partners of Kohlberg) will not receive compensation for their service as a director, other than, with respect to directors who are so affiliated with Kohlberg, reimbursement for reasonable travel and other expenses as described in the paragraph above.
The Board (or the compensation committee thereof) may amend this Non-Employee Director Compensation Policy at any time.