Exhibit 10.1
GUARDANT HEALTH, INC.
NON-EMPLOYEE DIRECTOR COMPENSATION PROGRAM
(EFFECTIVE JUNE 12, 2020)
In order to further align directors’ interests with those of long-term
stockholders, on June 12, 2020 the Board of Directors (the “Board”) of Guardant
Health, Inc. (the “Company”) approved a number of modifications to its
Non-Employee Director Compensation Program (this “Program”). Specifically, the
Board eliminated the cash compensation component of the Program, effective
immediately, and concurrently revised the terms of the initial and annual equity
awards to be granted under the Program to the Eligible Directors (as defined
below) going-forward.
Eligible Directors on the Board shall be eligible to receive compensation as set
forth in this Program. The compensation described in this Program shall be made,
as applicable, automatically and without further action of the Board, to each
member of the Board who is not an employee of the Company or any of its parents,
affiliates or subsidiaries (each, an “Eligible Director”), who may be eligible
to receive such compensation, unless such Eligible Director declines the receipt
of such compensation by written notice to the Company. This Program shall become
effective upon the date set forth above (the “Effective Date”) and shall remain
in effect until it is revised or rescinded by further action of the Board. This
Program may be amended, modified or terminated by the Board at any time in its
sole discretion. No Eligible Director shall have any rights hereunder, except
with respect to equity awards granted pursuant to Section 1 of this Program.
1.Equity Compensation.
a.General. Eligible Directors shall be granted the equity awards described
below. The awards described below shall be granted under and shall be subject to
the terms and provisions of the Company’s 2018 Incentive Award Plan or any other
applicable Company equity incentive plan then-maintained by the Company (such
plan, as may be amended from time to time, the “Equity Plan”) and may be granted
subject to the execution and delivery of award agreements, including attached
exhibits, in substantially the forms approved by the Board prior to or in
connection with such grants. All applicable terms of the Equity Plan apply to
this Program as if fully set forth herein, and all grants of equity awards
hereby are subject in all respects to the terms of the Equity Plan. Capitalized
terms not otherwise defined herein shall have the meanings ascribed to them in
the Equity Plan.
b.Initial Awards. Each Eligible Director who is initially elected or appointed
to serve on the Board after the Effective Date automatically shall be granted an
Option with a value of $362,500 and a Restricted Stock Unit award with a value
of $362,500 (each, an “Initial Award”). Each Initial Award shall be granted on
the date on which such Eligible Director is appointed or elected to serve on the
Board (the “Election Date”), and each such award shall vest and become
exercisable (as applicable) as to 25% of the Shares subject to such award on the
first anniversary of such Election Date, and as to the remaining 75% of the
Shares subject to such award in substantially equal installments on each monthly
anniversary of the Election Date during the three-year period thereafter,
subject to continued service through the applicable vesting date.
c.Annual Awards. An Eligible Director who has served on the Board for at least
six months as of the date of the annual meeting of the Company’s stockholders
shall be granted, on such annual meeting date, an Option with a value of
$212,500 and a Restricted Stock Unit award with a value of $212,500 (together,
the “Annual Awards”). Each Annual Award shall vest and become exercisable (as
applicable) in full on the earlier to occur of (i) the one-year anniversary of
the applicable grant date and (ii) the date of the next annual meeting of the
Company’s stockholders following the grant date, subject to continued service
through the applicable vesting date.
d.Annual Lead Independent Director Award. An Eligible Director who has served on
the Board for at least six months as of the date of the annual meeting of the
Company’s stockholders and who
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also will serve as Lead Independent Director of the Board immediately following
such date shall be granted, on such annual meeting date, a Restricted Stock Unit
award with a value of $45,000 (the “Annual LID Award”). Each Annual LID Award
shall vest in full on the earlier to occur of (i) the one-year anniversary of
the applicable grant date and (ii) the date of the next annual meeting of the
Company’s stockholders following the grant date, subject to continued service
through the applicable vesting date.
e.Accelerated Vesting Events. Notwithstanding the foregoing, an Eligible
Director’s Initial Awards, Annual Award(s) and/or Annual LID Award shall vest in
full immediately prior to (i) such Eligible Director’s Termination of Service by
the Company without Cause (as defined below) or due to his/her death or
Disability (as defined below) or (ii) the occurrence of a Change in Control, in
each case, to the extent outstanding at such time.
f.Provisions Applicable to Awards. With respect to any Award granted under this
Program:
i.The exercise price per Share with respect to an Option shall be equal to the
Fair Market Value of a Share on the applicable grant date.
ii.An Option shall have a maximum term of ten years from the applicable grant
date.
iii.The number of Shares subject to an Option shall be determined by dividing
the value of the Option by the per share Black-Scholes valuation as of the
applicable grant date, utilizing the same assumptions that the Company uses in
preparation of its financial statements.
iv.The number of Shares subject to a Restricted Stock Unit award shall be
determined by dividing the value by the Fair Market Value of the Company’s
common stock on the applicable grant date.
2.Compensation Limits. Notwithstanding anything to the contrary in this Program,
all compensation payable under this Program shall be subject to any limits on
the maximum amount of non-employee Director compensation set forth in the Equity
Plan, as in effect from time to time.
3.Certain Defined Terms.
a.“Cause” means the occurrence of any one or more of the following events
unless, to the extent capable of correction, the Eligible Director fully
corrects the circumstances constituting Cause within 15 days after receipt of
written notice thereof:
i.the Eligible Director’s willful failure to substantially perform his or her
duties with the Company (other than any such failure resulting from the Eligible
Director’s incapacity due to physical or mental illness), after a written demand
for performance is delivered to the Eligible Director by the Board, which demand
specifically identifies the manner in which the Board believes that the Eligible
Director has not performed his or her duties;
ii.the Eligible Director’s commission of an act of fraud or material dishonesty
resulting in reputational, economic or financial injury to the Company;
iii.the Eligible Director’s material misappropriation or embezzlement of the
property of the Company or any of its affiliates;
iv.the Eligible Director’s commission of, including any entry by the Eligible
Director of a guilty or no contest plea to, a felony (other than a traffic
violation) or other crime involving moral turpitude, or the Eligible Director’s
commission of unlawful harassment or discrimination;
v.the Eligible Director’s willful misconduct or gross negligence with respect to
any material aspect of the Company’s business or a material breach by the
Eligible Director
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of his or her fiduciary duty to the Company, which willful misconduct, gross
negligence or material breach has a material and demonstrable adverse effect on
the Company; or
vi.the Eligible Director’s material breach of the Eligible Director’s
obligations under a written agreement between the Company and the Eligible
Director.
b.“Disability” means a permanent and total disability under Section 22(e)(3) of
the Code.
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