Document:

Exhibit

 

HEALTHEQUITY, INC.
NON-EMPLOYEE DIRECTOR COMPENSATION  POLICY 
(as amended and restated effective as of September 29, 2015)
HealthEquity, Inc. (the “Company”) believes that, in addition to cash compensation, the granting of options (the “Options”) to purchase shares of the Company’s common stock (the “Shares”) to members (“Directors”) of its board of directors (the “Board”) represents a powerful tool to attract, retain and reward Directors who are not employees of the Company (“Non-Employee Directors”) and to align the interests of our Non-Employee Directors with those of our stockholders.  This Non-Employee Director Compensation Policy (this “Policy”) is intended to establish the Company’s policy regarding cash compensation and Options grants to its Non-Employee Directors.  Unless otherwise defined herein, capitalized terms used in this Policy will have the meaning given such term in the Company’s 2014 Equity Incentive Plan, as amended and restated from time to time (the “Plan”).  Non-Employee Directors shall be solely responsible for any tax obligations they incur as a result of any compensation received under this Policy.
I.    Cash Compensation
(a)    Annual Retainer Fee.  The Company will pay each Non-Employee Director (other than any Non-Employee Director who is a representative of Berkley Capital Investors, L.P. or Napier Park Global Capital) an annual fee of $25,000 for serving on the Board (the “Annual Fee”).  Each Annual Fee will be paid ratably on a fiscal quarterly basis at the beginning of each quarter to each Non-Employee Director who will be serving in the relevant capacity for such fiscal quarter.  For purposes of clarification, no ratable payment of an annual retainer will be paid to a Non-Employee Director who is not continuing as a Non-Employee Director following the start of the applicable Company fiscal quarter.
(b)    Annual Audit Committee Chairperson Retainer Fee.  The Company will pay each Non-Employee Director who serves as chairperson of the Audit Committee an additional annual fee of $40,000 for serving as the chairperson (the “Annual Audit Committee Chairperson Fee”).  The Annual Audit Committee Chairperson Fee will be paid ratably on a fiscal quarterly basis at the beginning of each quarter to each such Non-Employee Director who will be serving in the relevant capacity for such fiscal quarter.  For purposes of clarification, no ratable payment of an annual retainer will be paid to a Non-Employee Director who is not continuing as the chairperson of the Audit Committee, following the start of the applicable Company fiscal quarter.
(c)    Annual Compensation Committee Chairperson Retainer Fee.  The Company will pay each Non-Employee Director who serves as chairperson of the Compensation Committee an additional annual fee of $15,000 for serving as the chairperson (the “Annual Compensation Committee Chairperson Fee”).  The Annual Compensation Committee Chairperson Fee will be paid ratably on a fiscal quarterly basis at the beginning of each quarter to each such Non-Employee Director who will be serving in the relevant capacity for such fiscal quarter.  For purposes of clarification, no ratable payment of an annual retainer will be paid to a Non-Employee Director who is not continuing as the chairperson of the Compensation Committee, following the start of the applicable Company fiscal quarter.

 

(d)    Annual Chairman Retainer Fee.  The Company will pay each Non-Employee Director who serves as Chairman of the Board an additional annual fee of $100,000 for serving as the Chairman of the Board (the “Annual Board Chairman Fee”).  The Annual Board Chairman Fee will be paid ratably on a fiscal quarterly basis at the beginning of each quarter to each such Non-Employee Director who will be serving in the relevant capacity for such fiscal quarter.  For purposes of clarification, no ratable payment of an annual retainer will be paid to a Non-Employee Director who is not continuing as the Chairman of the Board, following the start of the applicable Company fiscal quarter.
(e)    Travel Expenses.  Each Non-Employee Director’s reasonable, customary and documented travel expenses to Board and committee meetings will be reimbursed by the Company. 
(f)    Revisions.  The Board in its discretion may change and otherwise revise the terms of the cash compensation granted under this Policy (including, without limitation, the amount of cash compensation to be paid) on or after the date the Board determines to make any such change or revision.
(g)    Section 409A.  Payments under this Policy are intended to be exempt from Section 409A of the Internal Revenue Code of 1986, as amended, under Treasury Regulation §§ 1.409A-1(b)(4) (“short-term deferrals”) and this Policy shall be administered, interpreted and construed accordingly.
II.    Equity Compensation
Non-Employee Directors will be entitled to receive all types of Awards (except Incentive Stock Options) under the Plan, including discretionary Awards not covered under this Policy.  All grants of Awards to Non-Employee Directors pursuant to Sections II.(b) and (c) of this Policy will be automatic and nondiscretionary, except as otherwise provided herein, and will be made in accordance with the following provisions:
(a)    No Discretion.  No person will have any discretion to select which Non-Employee Directors will be granted Awards under this Policy or to determine the number of Shares to be covered by such Awards (except as provided in Sections II.(e) and (f) below and Section 10 of the Plan).
(b)    Initial Award.  Each person who first becomes a Non-Employee Director following the effective date of this Policy will be automatically granted an Award of Nonstatutory Stock Options for 25,000 Shares (the “Initial Award”) on or about the date on which such person first becomes a Non-Employee Director, whether through election by the stockholders of the Company or appointment by the Board to fill a vacancy; provided, however, that a Director who is an Employee of the Company (an “Inside Director”) who ceases to be an Inside Director, but who remains a Director, will not receive an Initial Award.
(c)    Annual Award.  Each Non-Employee Director will be automatically granted an Award of Nonstatutory Stock Options for 15,000 Shares (an “Annual Award”) on the first day of each fiscal year which occurs following the effective date of this Policy.

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(d)    Chairman Award.  Each Non-Employee Director who serves as Chairman of the Board will be automatically granted an additional Award of Nonstatutory Stock Options for 25,000 Shares (the “Chairman Additional Award”) on the date on which such person first becomes Chairman of the Board.
(e)    Terms.  The terms of each equity Award granted pursuant to this Policy will be as follows:
(i)    The Options subject to the Initial Award and the Chairman Additional Award will vest and become exercisable over a four (4) year period with twenty-five percent (25%) of the Options subject to the Award vesting on each of the first four (4) annual anniversaries of the date on which the recipient first becomes a Director or Chairman of the Board, as applicable; provided that the Director continues to serve as a Director through such dates.  The Options subject to the Annual Award will vest and become exercisable over a one (1) year period with fifty percent (50%) of the Options subject to the Annual Award vesting on the date of the annual meeting of the stockholders of the Company held during the fiscal year during which such Annual Award is granted and the remainder vesting on the last day of the fiscal year during which such Annual Award is granted; provided that the Director continues to serve as a Director through such dates.
(ii)    Notwithstanding anything to the contrary in this Policy, the Initial Award, Annual Award and the Chairman Additional Award shall be subject to the terms and conditions of the Plan and an applicable Award Agreement.
(f)    Revisions.  The Board in its discretion may change and otherwise revise the terms of Awards granted under this Policy, including, without limitation, the types of Awards, the number of Shares, the exercise prices, and vesting schedules, for Awards granted on or after the date the Board determines to make any such change or revision.  
(g)    Adjustments.  The number of Shares issuable pursuant to Initial Awards, Annual Awards and Chairman Additional Awards to be granted under Sections II.(b), (c) and (d) of this Policy shall be adjusted in accordance with Section 9 of the Plan.
*    *    *

3Exhibit 10.1

 

FIRST AMENDMENT

 

TO

 

EMPLOYMENT AGREEMENT

 

THIS FIRST AMENDMENT TO EMPLOYMENT AGREEMENT
(this “Amendment”), dated the 8th day of December, 2015, is made and entered into by and between Cornerstone
Community Bank, a banking corporation organized under the laws of the State of Tennessee (the “Bank”), and James
R. Vercoe, Jr., a resident of the State of Tennessee (the “Employee”). The Bank and the Employee are sometimes
referred to collectively in this Amendment as the “Parties,” and each of the Bank and the Employee is sometimes
referred to individually in this Amendment as a “Party.”

 

RECITALS

 

WHEREAS, the Parties are party to that certain
Employment Agreement dated December 5, 2014 (the “Employment Agreement”), providing for the Employee’s
employment by the Bank;

 

WHEREAS, effective after the close of business
on August 31, 2015, SmartFinancial, Inc., a Tennessee corporation, merged with and into Cornerstone Bancshares, Inc., a Tennessee
corporation and the sole shareholder of and bank holding company for the Bank (the “Company”) (such merger,
the “Merger”), with the Company being the corporation to survive the Merger;

 

WHEREAS, as a result of the Merger, the
Employee’s position with the Bank changed, and the Parties desire to amend the Employment Agreement to reflect such change
in the Employee’s position with the Bank; and

 

WHEREAS, Section 17 of the Employment
Agreement requires that any amendment to the Employment Agreement be set forth in a written instrument signed by all of the Parties.

 

NOW, THEREFORE, in consideration of the
foregoing and the respective agreements and covenants set forth herein, and other good and valuable consideration, the receipt
and sufficiency of all of which are hereby acknowledged, the Parties, intending to be legally bound, agree as follows:

 

1.                 
Defined Terms. Capitalized terms used but not defined in this Amendment shall have the respective meanings ascribed
to such terms in the Employment Agreement.

 

2.                 
Employment Agreement Amendments. The Parties acknowledge and agree that the Employment Agreement is hereby amended
as follows:

 

(a)               
Amendment of Recitals. Paragraph “A” of the Recitals to the Employment Agreement is amended to read in
its entirety as follows:

 

A.The Bank desires to employ
the Employee as Executive Vice President and Relationship Team Manager, and the Employee desires to accept such employment.

 

(b)              
Amendment of Section 2(a). Section 2(a) of the Employment Agreement is amended to read in its entirety as follows:

 

(a)Position(s).
The Employee will be employed as Executive Vice President and Relationship Team Manager of the Bank and shall perform and discharge
faithfully the duties and responsibilities which may be assigned to the Employee from time to time in connection with the conduct
of the Bank’s business. The duties and responsibilities of the Employee shall be commensurate with those of individuals holding
similar positions at other banks similarly situated. The Employee will report directly to the President of the Bank or such other
officer as the Board of Directors may determine.

 

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(c)               
Amendment of Section 6(b). Section 6(b) of the Employment Agreement is amended to read in its entirety as follows:

 

(b)If
within 12 months following a Change of Control the Employee terminates the Employee’s employment with the Bank (or any successor
of or to the Bank) for Cause, the Employee (or in the event of the Employee’s subsequent death the Employee’s estate
or designated beneficiary or beneficiaries, as the case may be) shall receive, as liquidated damages, in lieu of all other claims,
a severance payment equal to (i) if termination is for Cause as defined in Section 1(f)(ii)(1) or Section 1(f)(ii)(3),
two times the Employee’s Annual Base Salary as of the date of termination, such amount to be paid in full in one lump sum
payment on the last day of the month following the date of termination of the Employee’s employment, or (ii) if termination
is for Cause as defined in Section 1(f)(ii)(2), two times the Employee’s Annual Base Salary immediately before
the reduction in salary and other compensation and benefits giving rise to termination, such amount to be paid in full in one lump
sum payment on the last day of the month following the date of termination of the Employee’s employment. Additionally, the
Employee will continue to receive the health insurance plan benefits then in effect for employees of the Bank for the lesser of
(i) 12 months following termination and (ii) until such time as the Employee obtains other employment providing health insurance
plan benefits, to include payment of any Bank-funded portion of the plan; provided, however, that the Bank may discontinue
paying insurer(s) COBRA premiums for health insurance coverage for the applicable time period and instead provide a cash payment
to the Employee (for the Employee to use as the Employee deems appropriate) equal to the amount of the remainder of such COBRA
premiums in the event that the Bank determines that continued provision of a COBRA subsidy would cause a violation of applicable
nondiscrimination rules.

 

3.                 
Counterparts. This Amendment may be executed by the Parties in any number of counterparts (which may be delivered
by facsimile, email, or other similar means of electronic transmission), each of which, when duly executed, shall be deemed an
original and all of which together shall constitute one and the same instrument. 

 

4.                 
Governing Law. This Amendment shall in all respects be governed by and construed, interpreted, and enforced in accordance
with the laws of the State of Tennessee, without regard to principles of conflict of laws.

 

5.                 
Captions. The captions, headings, and section numbers appearing in this Amendment have been inserted for purposes
of convenience of reference only and shall be given no force or effect in the construction or interpretation of this Amendment.

 

6.                 
Ratification. Except as expressly amended by this Amendment, the Employment Agreement is ratified and confirmed in
all respects and shall remain in full force and effect in accordance with its terms.

 

7.                 
Effective Date. This Amendment is entered into by the parties on the date first above written to be effective as
of September 1, 2015.

 

 

(Signature Page Follows)

 

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IN WITNESS WHEREOF, each
Party has executed and delivered this Amendment as of the day and year first above written.

 

	BANK:	CORNERSTONE COMMUNITY BANK
	 	 	 
	 	 	 
	 	By:	/s/ Robert B. Watson
	 	 	Robert B. Watson
	 	 	President 
	 	 	 
	 	 	 
	EMPLOYEE:	 	/s/ James R. Vercoe,
Jr.
	 	 	James R. Vercoe,
Jr.

 

 

 

 

 

 

(Signature Page to First Amendment to
Employment Agreement)

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