Document:

10.47 Non-Employee Director Comp Policy

Non-Employee Director Compensation Policy for
Cellular Dynamics International, Inc.

(Adopted May 7, 2013, effective for Director service as of January 1, 2013)
		
	1.
	Definitions

Unless the context otherwise requires, the following terms shall have the meanings set forth below:

		
	(a)
	“Director” shall mean each non-employee director member of the Board of Directors.  

		
	(b)
	“Equity Plan” shall mean the 2013 Equity Incentive Plan of Cellular Dynamics International, Inc.

		
	(c)
	“IPO Date” shall mean the date that the initial public offering of the Company’s Shares occurs. 

Any capitalized terms used below which are not otherwise defined above will have the meanings assigned to them in the Equity Plan.

		
	2.
	Cash Retainer.

Except as otherwise provided by Board resolution at the time of the adoption of this policy or in advance of a Director’s term of service, each individual serving as a Director shall be entitled to receive an annual cash retainer of $40,000 per year during his or her service as a Director.  The cash retainer shall be paid to the Director in four quarterly installments, paid at the end of each calendar quarter (or the first business day thereafter) in arrears, beginning following the IPO Date.  Payments for a Director’s service during a partial calendar quarter shall be prorated.  The first payment for 2013 shall occur on the last day of the first calendar quarter which includes the IPO Date and shall include payment for any full or partial calendar quarter served by the Director since January 1, 2013.  Each individual serving as a Director shall also be entitled to receive an additional cash retainer for serving on a committee of the Board of Directors as follows:  $7,500 per year for Audit Committee or Compensation Committee, and $4,000 for Nominating and Governance Committee.  Further, for each Director who serves as the Chairperson for a committee of the Board of Directors shall, in lieu of the fee in the immediately preceding sentence, be entitled to a cash retainer as follows:  $25,000 per year for Audit Committee or Compensation Committee, and $15,000 per year for the Nominating and Governance Committee.  The cash retainers for committee service and for committee chairpersons shall be paid to the Directors at the same time and on the same basis as the regular annual cash retainer for Directors.

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3.Annual Grant of Stock Options.  
(a)  After the IPO Date, except as otherwise provided by Board resolution in advance of the grant date, each individual serving as a Director on the date of the Company’s annual meeting shall be granted on that annual meeting date, automatically and specifically without further action of the Board of Directors, an Option to purchase 75,000 Shares.  For the first option grant in 2013 under this Policy, on the IPO Date, except as otherwise provided by Board resolution in advance of the grant date, each individual serving as a Director on the IPO Date shall be granted, automatically and specifically without further action of the Board of Directors, an Option to purchase a number of Shares equal to (x) 75,000, multiplied by (y) a fraction, the numerator of which is (1) the number of days during which the Director has served as a Director between January 1, 2013 and the IPO Date, plus (2) the number of days between the IPO Date and the estimated date of the Company’s next annual meeting, and the denominator of which is 365 (rounded to the nearest whole share).  Any Option granted under this Paragraph 3(a) shall vest over a one-year period in twelve equal monthly installments on each monthly anniversary of the date of grant. 
(b)  After the IPO Date, except as otherwise provided by Board resolution in advance of the grant date, for any individual becoming a Director on a date other than the Company’s annual meeting date, such Director shall be granted, automatically and specifically without further action of the Board of Directors, an Option to purchase a number of Shares equal to (i) 75,000, multiplied by (ii) a fraction, the numerator of which is the number of days between the date the Director becomes a Director and the estimated date of the Company’s next annual meeting – and the denominator of which is 365 (rounded to the nearest whole share).  The date of grant of such Option shall be the date the Director becomes a Director.  Such an Option shall vest in equal monthly installments on the last day of each month starting with the month of grant and ending with the month immediately prior to the Company’s next annual meeting.  
(c)  Options granted under paragraph 3(a) and 3(b) above will not vest if the Director is no longer a member of the Board of Directors on the vesting date, and any Options held by a Director which remain unvested at the time the Director ceases to be a member of the Board of Directors shall be forfeited.
(d)  Options granted under paragraph 3(a) and 3(b) above will remain exercisable until the earlier of:  (i) three (3) years after a Director ceases to be a member of the Board of Directors; or (ii) the original expiration date of the Option. 
		
	4.
	Application of Plan.  

Except as otherwise provided in this Non-Employee Director Compensation Policy, the Equity Plan shall apply to any Options granted pursuant to this Policy.  
9396755_3 

210.48 Amendment to Thomson Letter Agreement

Cellular Dynamics International, Inc.
University Research Park
525 Science Drive, Suite 200
Madison, WI 53711

May 7, 2013
Dr. James A. Thomson
3420 Genetics-Biotechnology Center Bldg.
425 Henry Mall
Madison, WI  53706

Dear Jamie:

As you know, you and Cellular Dynamics International, Inc. (the “Company”) are parties to a Consulting Agreement dated December 19, 2008 (the “Consulting Agreement”), the terms and conditions of which were supplemented but not superseded by that certain letter agreement dated October 18, 2010, as amended by the letter agreement dated January 24, 2012 (the “2010 Letter Agreement”).

This letter (when fully executed and delivered by you as contemplated below, this “Agreement”) will confirm our understanding, effective as of the date of closing of the IPO (as defined below) (the “Effective Date”), regarding the amendment of the Consulting Agreement and the 2010 Letter Agreement and your undertakings regarding the license or transfer to the Company of certain intellectual property in connection with, and as consideration for, the grant to you of an option for the purchase of 1,462,500 shares of the Company’s common stock (“Common Stock”) under the Company’s 2013 Equity Incentive Plan (the “Plan”), as further described in this paragraph.  Such option grant would be made on, or on the day immediately before, the Effective Date, would be subject to the condition for the benefit of the Company that the IPO closes, and would provide for an exercise price per share equal to the price per share at which Common Stock is sold to the public in the IPO.  The number of shares specified above as being subject to such option is subject to adjustment for any stock combination or reverse stock split occurring after May 7, 2013 and before or on the Effective Date.  For purposes hereof, (i) the “IPO” means the sale by the Company of its common stock pursuant to the registration statement initially submitted by the Company to the Securities and Exchange Commission on a confidential basis on February 26, 2013 and thereafter declared effective by the Securities and Exchange Commission; and (ii)  the “IPO-related Option Grant” means the option grant described above in this paragraph.

1.    Amendment of 2010 Letter Agreement regarding Noncompetition Agreement.  As consideration for the IPO-related Option Grant, you hereby agree that the definition of the “Restricted Period” in Section 3(b)(v) of the 2010 Letter Agreement shall be amended by deleting such definition in its entirety and inserting in place thereof the following:

“(v)    “Restricted Period” is:  (i) for purposes hereof and of, and with respect to, the Nonstatutory Stock Option Agreement dated October 18, 2010 between the Company and you (including with respect to the Option evidenced thereby and any Shares issued upon the exercise of such Option), the four year period commencing on October 18, 2010; (ii) for purposes hereof and of, and with respect to, the Nonstatutory Stock Option Agreement dated December 20, 2011 between the Company and you (including with respect to the Option evidenced thereby and any Shares issued upon the exercise of such Option), the four year period commencing on December 20, 2011; and (iii) for purposes hereof and of, and with respect to, the Nonstatutory Stock Option Agreement dated the Effective Date between the Company and you (including with respect to the Option evidenced thereby), which agreement confirms the IPO-related Option Grant, the period commencing on the Effective Date except in no event shall the “Restricted Period” continue for longer than the second anniversary of the termination of the Consulting Agreement, as amended.”
2.    Amendment of Consulting Agreement.  As consideration for the IPO-related Option Grant, you hereby agree as follows:
(a)    Section 4 of the Consulting Agreement shall be amended by deleting the section in its entirety and inserting in its place thereof the following:
		
	“4)
	Term.  This Agreement shall be effective as of the date first written above and will continue until the one year anniversary of the sale by the Company of its common stock pursuant to the registration statement initially submitted by the Company to the Securities and Exchange Commission on a confidential basis on February 26, 2013 and thereafter declared effective by the Securities and Exchange Commission upon which one-year anniversary this Agreement automatically will terminate.”

(b)    The definition of “Inventions” in the second paragraph of Section 6 of the Consulting Agreement shall be amended by deleting the paragraph in its entirety and inserting in its place thereof the following:
The term “Inventions” as used in this Agreement means all ideas, designs, modifications, formulations, concepts, know-how, trade secrets, discoveries, inventions, data, software, developments and copyrightable works, whether or not patentable or registrable, which Consultant originates, discovers or develops, either alone or jointly with others while Consultant has provided or hereafter during the Term provides consulting services to the Company which are (i) originated, 

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discovered or developed during Consultant’s hours working for the Company at the Company’s facilities under this Agreement, (ii) originated, discovered or developed in whole or in part using materials, labor, facilities, Confidential Information, trade secrets, or equipment furnished by the Company, or (iii) related to the Company’s business; provided, however, such clause (iii) shall not encompass ideas, designs, modifications, formulations, concepts, know-how, trade secrets, discoveries, inventions, data, software, developments and copyrightable works, whether or not patentable or registrable, that a third party, by contract or under applicable law, has an outstanding claim to as of May 7, 2013.
(c)    Exhibit A of the Consulting Agreement shall be amended to insert before the final bullet point in the definition of “Services” the following services: 
		
	•
	provide such advice and assistance regarding, and participate in meetings with, actual or potential customers, user groups, investors, and strategic partners of or in the Company as the Company from time to time may reasonably request;

		
	•
	allow the Company to use Consultant’s name and image in product literature and marketing and promotional materials, subject to the approval of Consultant, which Consultant agrees will not be unreasonably conditioned, delayed or withheld; and

		
	•
	provide advice and assistance to the Company in identifying and recruiting scientists whose expertise or services would be valuable to the Company.

3.    Transfer of Certain Intellectual Property.  As consideration for the IPO-related Option Grant and subject to the condition that from and after May 7, 2013 you have not taken or omitted to take any action inconsistent with what is provided below in this Paragraph 3, you hereby agree as follows:  (a) to use your reasonable best efforts to cause an agreement granting a license under, or document(s) of conveyance to assign all rights in (whichever such transaction the parties may agree upon), the inventions covered by the claims of the following invention disclosure  (the “Subject IP”) to the Company without any additional consideration to you (other than the IPO-related Option Grant) for your interest therein; and (b) in consultation with the Company, to assist the Company in obtaining such license or assignment of the Subject IP on terms and conditions acceptable to the Company.
4.    Certain Capitalized Terms.  Certain capitalized terms used, but not otherwise defined, in this Agreement shall have the meanings assigned to such terms in the Plan.
5.    No Other Amendment of Consulting Agreement or 2010 Letter Agreement.  Except for the amendment set forth above, the Consulting Agreement and 2010 Letter Agreement shall remain in full force and effect.

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If this letter correctly sets forth your understanding of our agreement, please sign a copy in the space provided below and return it to the Company.
Very truly yours,

Cellular Dynamics International, Inc.

Thomas M. Palay
President
I confirm my agreement with 
the terms and conditions of this letter.

_______________________________
James A. Thomson
 
Date:___________________________

9405748_3 

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