Document:

irwd_Ex10_4

		

			Exhibit 10.4

		

		
			 
		

			
					
						Name:

					
					
						 

				
	
					
						Number of Shares of Restricted Stock:

					
					
						 

				
	
					
						Date of Grant:

					
					
						 

				
	
					
						Vesting Start Date:

					
					
						 

				

		
			 
		

		
			Ironwood Pharmaceuticals, Inc.
2019 Equity Incentive Plan
		

		
			Non-Employee Director Restricted Stock Agreement
		

		
			 
		

		
			This agreement (this “Agreement”) evidences the grant of shares of restricted Stock by Ironwood Pharmaceuticals, Inc. (the “Company”) to the individual named above (the “Participant”), pursuant to and subject to the terms of the Ironwood Pharmaceuticals, Inc. 2019 Equity Incentive Plan (as amended from time to time, the “Plan”).  Except as otherwise defined herein, all capitalized terms used herein have the same meaning as in the Plan.
		

			
	
			
				 1.
			Grant of Restricted Stock.  The Company hereby issues to the Participant on the date of grant set forth above (the “Date of Grant”), pursuant to and subject to the terms set forth in this Agreement and in the Plan, the number of shares of restricted Stock set forth above (the “Restricted Stock”), subject to adjustment pursuant to Section 7 of the Plan in respect of transactions occurring after the date hereof.

			
	
			
				 2.
			Vesting.  The term “vest” as used herein with respect to any share of Restricted Stock means the lapsing of the restrictions described herein with respect to such share.  Unless earlier terminated, forfeited, relinquished or expired, the Restricted Stock will vest as follows, subject to the Participant remaining in continuous service as a director of the Company from the Date of Grant through such vesting date:

		
			[Insert Vesting Schedule]
		

		
			In the event of a Covered Transaction, the Administrator may require that any amounts delivered, exchanged or otherwise paid in respect of outstanding and then unvested shares of Restricted Stock be placed in escrow or otherwise made subject to such restrictions as the Administrator deems appropriate to carry out the intent of the Plan.  References in this Agreement to the shares of Restricted Stock refer, mutatis mutandis, to any such restricted amounts.
		

			
	
			
				 3.
			Forfeiture Risk.  

			
	
			
				 (a).
			

			
	
			
			If the Participant’s service as a director of the Company ceases for any reason, including death, any then outstanding and unvested shares of Restricted Stock acquired by the Participant hereunder will be automatically and immediately forfeited.  The Participant hereby (i) appoints the Company as his or her attorney-in-fact to take such actions as may be necessary or appropriate to effectuate a transfer of the record ownership of any such shares that are unvested and forfeited hereunder, (ii) agrees to deliver to the Company, as a precondition to the issuance of any certificate or certificates with respect to unvested shares of Restricted Stock hereunder, one or more stock powers, endorsed in blank, with respect to such 

		 

	shares, and (iii) agrees to sign such other powers and take such other actions as the Company may reasonably request to accomplish the transfer or forfeiture of any unvested shares of Restricted Stock that is forfeited hereunder.

			
	
			
				 (b).
			

			
	
			
			The Administrator may cancel, rescind, withhold or otherwise limit or restrict this Award at any time if the Participant is not in compliance with all applicable provisions of this Agreement and the Plan.  By accepting, or being deemed to have accepted, the Restricted Stock, the Participant expressly acknowledges and agrees that his or her rights, and those of any permitted transferee of the Restricted Stock, under this Agreement, including the right to any Shares acquired under this Award or proceeds from the disposition thereof, are subject to Section 6(a)(5) of the Plan (including any successor provision).  Nothing in the preceding sentence may be construed as limiting the general application of Section 10 of this Agreement.

			
	
			
				 4.
			Retention of Certificates.  Any certificates representing unvested shares of Restricted Stock will be held by the Company.  If unvested shares of Restricted Stock are held in book entry form, the Participant agrees that the Company may give stop transfer instructions to the depository to ensure compliance with the provisions hereof.

			
	
			
				 5.
			Legend.  All certificates representing unvested shares of Restricted Stock will contain a legend substantially in the following form:

		
			THE TRANSFERABILITY OF THIS CERTIFICATE AND THE SHARES OF STOCK REPRESENTED HEREBY ARE SUBJECT TO THE TERMS AND CONDITIONS (INCLUDING FORFEITURE) OF THE IRONWOOD PHARMACEUTICALS, INC. 2019 EQUITY INCENTIVE PLAN AND A RESTRICTED STOCK AWARD AGREEMENT ENTERED INTO BETWEEN THE REGISTERED OWNER AND IRONWOOD PHARMACEUTICALS, INC.  COPIES OF SUCH PLAN AND AGREEMENT ARE ON FILE IN THE OFFICES OF IRONWOOD PHARMACEUTICALS, INC.
		

		
			 
		

		
			As soon as practicable following the vesting of any such shares of Restricted Stock the Company shall cause a certificate or certificates covering such shares, without the aforesaid legend, to be issued and delivered to the Participant.  If any shares of Restricted Stock are held in book-entry form, the Company may take such steps as it deems necessary or appropriate to record and manifest the restrictions applicable to such shares. 
		

		
			 
		

			
	
			
				 6.
			Dividends, etc.  The Participant will be entitled to (a) receive any and all dividends or other distributions paid with respect to those shares of Restricted Stock of which he or she is the record owner on the record date for such dividend or other distribution, and (b) vote any shares of Restricted Stock of which he or she is the record owner on the record date for such vote; provided, however, that any property distributed with respect to a share of Restricted Stock (the “associated share”) acquired hereunder, including without limitation a distribution of Stock by reason of a stock dividend, stock split or otherwise, or a distribution of other securities with respect to an associated share, will be subject to the restrictions of this Agreement in the same manner and for so long as the associated share remains subject to such restrictions, and will be promptly forfeited if and when the associated share is so forfeited; and further provided, that the 

		 

		

			-2-

		

	Administrator may require that any cash distribution with respect to the shares other than a normal cash dividend be placed in escrow or otherwise made subject to such restrictions as the Administrator deems appropriate to carry out the intent of the Plan.  References in this Agreement to Restricted Stock refer, mutatis mutandis, to any such restricted amounts.

			
	
			
				 7.
			Sale of Vested Shares; Transferability of Shares.  

			
	
			
				 (a).
			

			
	
			
			The Participant understands and agrees that, on and after the Ownership Date (as defined in the Company’s 2019 Non-Employee Director Compensation Policy (the “Director Compensation Policy”)) the Participant shall not sell, transfer, assign, hypothecate, pledge, encumber, or otherwise dispose of (collectively, “Transfer”) shares of Stock or any interest therein (other than with respect to the shares of Stock no longer subject to the vesting requirements set forth in Section 2 in an amount approved by the Company to be required with respect to the Participant’s estimated total federal, state, and local tax obligations associated with the vesting of the Restricted Stock), even when such shares of Stock are vested, unless and until the Participant satisfies and continues to satisfy as of each Measurement Date (as defined in the Director Compensation Policy) the stock ownership guidelines applicable to the Participant sent forth in the Director Compensation Policy, which may be amended from time to time.  For the avoidance of doubt, this Section 7(a) will not limit any Transfer permissible under Section 7(b) and otherwise permitted under this Agreement if, following such Transfer, the Participant would be considered the “beneficial owner” of such shares of Stock under the Securities Exchange Act of 1934 and the Treasury Regulations and applicable guidance issued thereunder; provided, however, that unexercised stock options and/or unvested equity awards do not count towards satisfaction of the stock ownership requirements.

			
	
			
				 (b).
			

			
	
			
			Subject to the Transfer restrictions set forth in Section 7(a) above to satisfy the stock ownership guidelines set forth in the Director Compensation Policy and notwithstanding anything else to the contrary contained in this Agreement, the Participant understands that he or she will be free to sell any share of Restricted Stock once it has vested, subject to (i) satisfaction of any applicable tax withholding requirements with respect to the vesting or transfer of such share; (ii) the completion of any administrative steps (for example, but without limitation, the transfer of certificates) that the Company may reasonably impose; and (iii) applicable requirements of federal and state securities laws.  The shares of Restricted Stock may not be transferred except as expressly permitted under Section 6(a)(3) of the Plan.

			
	
			
				 8.
			Certain Tax Matters.  

			
	
			
				 (a).
			

			
	
			
			The Participant has been advised to confer promptly with a professional tax advisor to consider whether the Participant should make a so-called “83(b) election” with respect to the Restricted Stock.  Any such election, to be effective, must be made in accordance with applicable regulations and within 30 days following the date of “transfer” of the shares (as determined under Section 83 of the Code).  The 

		 

		

			-3-

		

	Company has made no recommendation to the Participant with respect to the advisability of making such an election.   If the Participant makes an 83(b) election, the Participant agrees to execute and deliver to the Company a copy of the Acknowledgement and Statement of Decision Regarding Election Pursuant to Section 83(b) of the Code, substantially in the form attached hereto as Exhibit A, together with a copy of the Election Pursuant to Section 83(b) of the Code (the “Election Form”), substantially in the form attached hereto as Exhibit B.  The Election Form must be filed by the Participant with the appropriate Internal Revenue Service office no later than 30 days after the date of the transfer of the shares noted above.

			
	
			
				 (b).
			

			
	
			
			The Participant is responsible for satisfying and paying all taxes arising from or due in connection with the award, vesting or payments under this award of Restricted Stock.  The Company will have no liability or obligation related to the foregoing.

			
	
			
				 9.
			Effect on Service.  Neither the grant of the Restricted Stock, nor the issuance of Shares upon the vesting of any portion of the Restricted Stock, will give the Participant any right to be retained in the employ or service of the Company or any of its subsidiaries, affect the right of the Company or any of its subsidiaries to discharge the Participant at any time, or affect any right of the Participant to terminate his or her service as a director of the Company at any time.

			
	
			
				 10.
			Provisions of the Plan.  This Agreement is subject in its entirety to the provisions of the Plan and the Director Compensation Policy, which are incorporated herein by reference.  A copy of the Plan as in effect on the Date of Grant has been furnished to the Participant.  By accepting, or being deemed to have accepted, all or any portion of the Restricted Stock, the Participant agrees to be bound by the terms of the Plan, the Director Compensation Policy and this Agreement.  In the event of any conflict between the terms of this Agreement, the Director Compensation Policy, and the Plan, the terms of the Plan and then the Director Compensation Policy will control.

			
	
			
				 11.
			Form S-8 Prospectus.  The Participant acknowledges that the Participant has received and reviewed a copy of the prospectus required by Part I of Form S-8 relating to shares of Stock that may be issued under the Plan.

			
	
			
				 12.
			Jurisdiction.  By accepting (or being deemed to have accepted) the Restricted Stock, the Participant agrees to (i) submit irrevocably and unconditionally to the jurisdiction of the federal and state courts located within the geographic boundaries of the United States District Court for the District of Delaware for the purpose of any suit, action or other proceeding arising out of or based upon the Plan or this Agreement; (ii) not commence any suit, action or other proceeding arising out of or based upon the Plan or this Agreement, except in the federal and state courts located within the geographic boundaries of the United States District Court for the District of Delaware; and (iii) waive, and not assert, by way of motion as a defense or otherwise, in any such suit, action or proceeding, any claim that he or she is not subject personally to the jurisdiction of the above-named courts that his or her property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper or that the Plan or this Agreement or the subject matter thereof may not be enforced in or by such court.

		
			

		 

		

			-4-

		

		

			
	
			
				 13.
			Acknowledgements.  The Participant acknowledges and agrees that (a) this Agreement may be executed in two or more counterparts, each of which will be an original and all of which together will constitute one and the same instrument, (b) this Agreement may be executed and exchanged using facsimile, portable document format (PDF) or electronic signature, which, in each case, will constitute an original signature for all purposes hereunder, and (c) such signature by the Company will be binding against the Company and will create a legally binding agreement when this Agreement is countersigned by the Participant.

		
			 
		

		
			 
		

		
			[Signature page follows.]
		

		
			 
		

		
			 
		

		
			

		 

		

			-5-

		

		

		
			 
		

		
			The Company, by its duly authorized officer, and the Participant have executed this Agreement as of the date first set forth above.
		

		
			 
		

		
			 

		

			
					
						 

					
					
						IRONWOOD PHARMACEUTICALS, INC.

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						By:

					
					
						/s/ Mark Mallon

				
	
					
						 

					
					
						Name:

					
					
						Mark Mallon

				
	
					
						 

					
					
						Title:

					
					
						Chief Executive Officer

				

		
			 
		

		
			

		 

		

			Signature Page to Non-Employee Director Restricted Stock Agreement

		

Exhibit  A
		

		
			 
		

		
			ACKNOWLEDGMENT AND STATEMENT OF DECISION REGARDING ELECTION
PURSUANT TO SECTION 83(b) OF THE INTERNAL REVENUE CODE
		

		
			 
		

		
			The undersigned, a grantee of restricted shares of common stock (the “Restricted Stock”) of Ironwood Pharmaceuticals, Inc., a Delaware corporation (the “Company”), pursuant to a Non-Employee Director Restricted Stock Agreement, dated as of [●], between the undersigned and the Company (the “Restricted Stock Agreement”), hereby states, as of the date of grant of the Restricted Stock, as follows:
		

			
	
			
				 1.
			The undersigned acknowledges receipt of a copy of the Restricted Stock Agreement.  The undersigned has carefully reviewed the Restricted Stock Agreement.

			
	
			
				 2.
			The undersigned either:  (a) has consulted, and has been fully advised by, the undersigned’s own tax advisor regarding the federal, state and local tax consequences of purchasing the Restricted Stock under the Restricted Stock Agreement, and particularly regarding the advisability of making elections pursuant to Section 83(b) of the Internal Revenue Code of 1986, as amended (the “Code”), and pursuant to the corresponding provisions, if any, of applicable state laws or (b) has knowingly chosen not to consult such tax advisor.

			
	
			
				 3.
			The undersigned hereby states that the undersigned has decided to make an election pursuant to Section 83(b) of the Code and is submitting to the Company together with the undersigned’s executed Restricted Stock Agreement, a copy of an executed election form which is attached as Exhibit B to the Restricted Stock Agreement.

			
	
			
				 4.
			Neither the Company nor a representative of the Company has made any warranty or representation to the undersigned with respect to the tax consequences of his or her purchasing the Restricted Stock pursuant to the Restricted Stock Agreement or of the making or failure to make an election pursuant to Section 83(b) of the Code or corresponding provisions, if any, of applicable state law.

			
	
			
				 5.
			The undersigned is also submitting to the Company, together with the undersigned’s executed Restricted Stock Agreement, a copy of an executed election form, if an election is made, by the undersigned pursuant to provisions of state law corresponding to Section 83(b) of the Code, if any, that apply to the purchase of the Restricted Stock by the undersigned.

		
			 
		

			
					
						 

					
					
						 

				
	
					
						Date: _________________

					
					
						
Participant

				

		
			 
		

		
			

		 

		

			 

		

Exhibit B
		

		
			 
		

		
			Election Pursuant to Section 83(b) of the Internal Revenue Code
		

		
			 
		

		
			The undersigned taxpayer hereby elects, pursuant to Section 83(b) of the Internal Revenue Code of 1986, as amended, to include in gross income as compensation for services the excess (if any) of the fair market value of the property described below over the amount paid for such property. 
		

		
			 
		

		
			The following information is submitted in accordance with Treas. Regs. § 1.83-2(e):
		

		
			 
		

			
	
			
				 1.
			

			
	
			
			Name of Taxpayer:[insert name of person making the election].

		
			 
		

		
			Address:[insert street address, city or town, state and ZIP code of person making the election].
		

		
			 
		

		
			Taxpayer Identification No.: [insert Social Security Number]
		

		
			 
		

			
	
			
				 2.
			

			
	
			
			Property for which election is made:  [●] shares (the “Shares”) of Common Stock of Ironwood Pharmaceuticals, Inc. (the “Company”).

		
			 
		

			
	
			
				 3.
			

			
	
			
			Date of Transfer:  [●].

		
			 
		

		
			Taxable year for which election is made:  Calendar year [●].
		

		
			 
		

			
	
			
				 4.
			

			
	
			
			Restrictions to which property is subject:  The Shares are subject to forfeiture in the event the Taxpayer’s service as a director of the Company terminates prior to the vesting of the Shares.  

		
			 
		

		
			5.The fair market value of the Shares at the time of their transfer (without regard to restrictions) was $[●] ($[●] per share).
		

		
			 
		

		
			6.Amount paid for the property:  $[●].
		

		
			 
		

			
	
			
				 7.
			

			
	
			
			A copy of this election has been furnished to the Company and to each other person, if any, required to receive the election pursuant to Treas. Regs. § 1.83-2(d)

		
			 
		

		
			The undersigned taxpayer will file this election with the Internal Revenue Service office with which the taxpayer files his or her annual income tax return not later than 30 days after the date of transfer of the property.  The undersigned taxpayer is the person performing the services in connection with which the property was transferred.
		

		
			 
		

		
			Please acknowledge receipt of this election by signing or stamping the enclosed copy of this election and return it in the enclosed, self-addressed, stamped envelope.
		

		
			 
		

			
					
						 

					
					
						 

				
	
					
						Date: _________________

					
					
						
Taxpayerirwd_Ex10_5

		
			Exhibit 10.5
		

		
			 
		

		
			Ironwood Pharmaceuticals, Inc.
		

		
			2019 Non-Employee Director Compensation Policy 
		

		
			 
		

		
			Effective as of the date immediately preceding the date of the 2019 annual meeting of stockholders of Ironwood Pharmaceuticals, Inc. (the “Company) (the “Effective Date”), each individual who provides services to the Company as a member of its Board of Directors (the “Board”), other than a director who is employed by the Company or a subsidiary of the Company (a “Non-Employee Director”), will be entitled to receive the following compensation:
		

		
			 
		

			
					
						 

					
						 

					
					
						 

					
						 

				
	
					
						Type of

					
						Compensation

					
					
						Amount and

					
						Form of Payment

				
	
					
						Annual retainer

					
					
						$50,000 ($80,000 for the chair of the Board)

				
	
					
						Additional annual retainer for members of the Audit Committee

					
					
						$10,000 ($20,000 for the chair)

				
	
					
						Additional annual retainer for members of the Compensation and HR Committee

					
					
						$7,500 ($15,000 for the chair)

				
	
					
						Additional annual retainer for members of the Governance and Nominating Committee

					
					
						$5,000 ($10,000 for the chair)

				
	
					
						Initial equity award

					
					
						Each Non-Employee Director who is first elected to the Board following the Effective Date will, upon his or her initial election to the Board, be granted restricted shares of the Company’s Class A common stock (“Restricted Stock”) having a grant date fair value of $250,000, determined based on the average closing price of the Company’s Class A common stock on the NASDAQ Global Select Market (or the stock exchange on which the Company’s Class A common stock is being actively traded) for the six months preceding the month in which the award is granted, as may be adjusted by the Board (the “Average Stock Price”), rounded down to the nearest whole share.  For example, if the award is being granted on May 29, 2019, the Average Stock Price is the average closing price of the Company’s Class A common stock on the NASDAQ Global Select Market (or the stock exchange on which the Company’s Class A common stock is being actively traded) from November 1, 2018 – April 30, 2019.

					
						 

					
						Such award will vest in three equal annual installments on the first three anniversaries of the date of grant, subject to the Non-Employee Director’s continued service on the Board through each applicable vesting date. For clarity, if a Non-Employee Director ceases serving as a member of the Board at any time prior to the date on which the award of Restricted Stock is fully vested, any shares of Restricted Stock that remain unvested on the date of such Non-Employee Director’s termination of service will be forfeited on the date of such termination of service.

				

		 

	
					
						

					
						Annual equity award

					
					
						Beginning with the 2019 annual meeting of stockholders of the Company (the “2019 Annual Meeting”), on the date of each annual meeting of stockholders of the Company, each Non-Employee Director shall be granted Restricted Stock having a grant date fair value of $250,000, determined based on the Average Stock Price, rounded down to the nearest whole share, provided, however, that such awards made in connection with the 2019 Annual Meeting shall be granted on the date immediately preceding the 2019 Annual Meeting.  

					
						 

					
						If a Non-Employee Director is initially elected to the Board other than at an annual meeting of the stockholders of the Company, upon his or her initial election to the Board (the “Start Date”), such Non-Employee Director shall be granted an award of Restricted Stock equal to the number of shares of Restricted Stock granted to the Non-Employee Directors in connection with the last annual meeting of the stockholders of the Company preceding the Start Date multiplied by a ratio equal to (i) 365 minus the number of days between the last annual meeting of the stockholders of the Company preceding the Start Date and the Start Date (ii) divided by 365.  

					
						 

					
						Such awards will vest in full on the date immediately preceding the date of the next annual meeting of stockholders, subject to the Non-Employee Director’s continued service on the Board through such vesting date. For clarity, if a Non-Employee Director ceases serving as a member of the Board at any time prior to the award’s vesting date, the award will be forfeited on the date of such Non-Employee Director’s termination of service.

				

		
			 
		

		
			Cash Fees.  All cash fees will be payable in arrears on a quarterly basis on March 15, June 15, September 15, and December 15 of each year (or if such date is not a trading day, the last trading day preceding such date) (each, a “Grant Date”) and will be prorated for any calendar quarter of partial service, based on the number of calendar days during the quarter the Non-Employee Director was a member of the Board, served on a committee, or served as Board or committee chair, as applicable.  
		

		
			 
		

		
			Annual Election to Receive Cash or Stock.  Each Non-Employee Director may elect to receive fully vested shares of the Company’s Class A common stock (each, a “Stock Grant”), at no cash cost to the Non-Employee Director, in lieu of his or her annual cash retainer and any additional cash retainers for Board chair, committee or committee chair service set forth above.  If a Stock Grant is so elected, the shares shall automatically be issued to the Non-Employee Director as of the applicable Grant Date without further action by the Board.  The number of shares of the Company’s Class A common stock to be issued will be determined by dividing the applicable cash retainer(s) the Non-Employee Director would be eligible to receive on such Grant Date, by the Fair Market Value (as defined in the Equity Incentive Plan) of a share of the Company’s Class A common stock on the Grant Date, rounded down to the nearest whole share.  
		

		
			 
		

		
			Any election to receive Company Class A common stock in lieu of a cash retainer must be received by the Company prior to January 1 of the year with respect to which the election is effective, except as otherwise 
		

		
			
		

		
			

		 

		

			2

		

		

		
			permitted by the Company.  In the event that a Non-Employee Director has not submitted his or her election for the applicable year by December 31 of the preceding year, then the election of such Non-Employee Director shall be deemed the same as the election made by such Non-Employee Director for the prior year.  If a Non-Employee Director has never made an election, all such retainer amounts shall be paid in cash.
		

		
			 
		

		
			Equity Grants.  Each award of Restricted Stock and Stock Grants, other than those awards of Restricted Stock granted in connection with the 2019 Annual Meeting, will be subject to the terms and conditions of the Company’s 2019 Equity Incentive Plan (or any successor plan) (the “Equity Incentive Plan”), including any individual limits contained therein, with respect to Non-Employee Directors and otherwise, and transfer restrictions, and, in the case of a Restricted Stock Award, a Restricted Stock agreement thereunder.  Each award of Restricted Stock granted in connection with the 2019 Annual Meeting will be subject to the terms and conditions of the Company’s Amended and Restated 2010 Employee, Director and Consultant Equity Incentive Plan (the “2010 Plan”), including any individual limits contained therein, with respect to Non-Employee Directors and otherwise, and transfer restrictions, and a Restricted Stock agreement thereunder.  Each award of Restricted Stock that is then outstanding will vest in full upon the Non-Employee Director’s death or (i) if the award of Restricted Stock was granted under the Equity Incentive Plan, upon a Covered Transaction (as defined in the Equity Incentive Plan) following which the Non-Employee Director is not appointed to the board of directors of the surviving entity, and (ii) if the award of Restricted Stock was granted under the 2010 Plan, upon a Corporate Transaction (as defined in the 2010 Plan), following which the Non-Employee Director is not appointed to the board of directors of the surviving entity.  Directors will be responsible for the satisfaction of any state or federal income taxation liabilities resulting from each award of Restricted Stock and Stock Grants.  Each award of Restricted Stock or Stock Grants shall be rounded down to the nearest whole number of shares so that no fractional shares shall be issued, and no cash shall be paid in lieu of fractional shares.
		

		
			 
		

		
			Stock Ownership Requirements.  Each Non-Employee Director must accumulate and continuously hold shares of the Company’s Class A common stock with a value equal to or greater than three (3) times the amount of the then-current annual retainer paid to the Non-Employee Director for service on the Board (excluding additional Board chair, committee, or committee chair retainers, if any).  Non-Employee Directors are required to achieve the applicable level of ownership by the later of (a) two years from the Effective Date and (b) two years from the date the individual first became a Non-Employee Director (the “Ownership Date”).
		

		
			 
		

		
			Interests that count towards satisfaction of these stock ownership requirements include shares of the Company’s Class A common stock owned by the Non-Employee Director under the definition of “beneficial ownership” under the Securities Exchange Act of 1934 or the Treasury Regulations and guidance thereunder.  Notwithstanding the foregoing, unexercised stock options and/or unvested equity awards do not count towards satisfaction of the stock ownership requirements.
		

		
			 
		

		
			Compliance with the stock ownership requirements will be measured on the date of the annual meeting of stockholders of the Company each year (each, a “Measurement Date”), based on the annual retainer then in effect for Non-Employee Directors. The value of shares of the Company’s Class A common stock will be based on the average closing price of the Company’s Class A common stock on the NASDAQ Global Select Market (or the stock exchange on which the Company’s Class A common stock is being actively traded) for the six months preceding the month in which the Measurement Date occurs.
		

		
			 
		

		
			Following the Ownership Date, until a Non-Employee Director holds the required ownership level and if such Non-Employee Director does not hold the number of shares of the Company’s Class A common stock to meet this requirement at any time thereafter, such Non-Employee Director shall be required to retain 100% of any shares of Company Class A common stock, net of shares sold to cover applicable taxes and the payment of any exercise or purchase price (if applicable), held or received upon the vesting or settlement 
		

		
			
		

		
			

		 

		

			3

		

		

		
			of equity awards or the exercise of stock options, in each case, in accordance with the applicable award agreement.  Further, following the Ownership Date, to the extent a Non-Employee Director does not a hold the number of shares of the Company’s Class A common stock that meets this threshold, the Non-Employee Director will be automatically deemed to have elected to receive his or her annual cash retainer and any additional cash retainer for service as Board chair, committee service, or service as a committee chair in the form of shares of the Company’s Class A common stock in an amount that satisfies the threshold shortfall.  
		

		
			 
		

		
			Expense Reimbursement.  In addition, Non-Employee Directors will be reimbursed by the Company for reasonable travel and other expenses incurred in connection with the Non-Employee Director’s attendance Board and committee meetings, in accordance with the Company’s policies as in effect from time to time.
		

		
			 
		

		
			Employee Directors.  For the avoidance of doubt, directors who are employees of the Company or one of its subsidiaries will not receive compensation for their service as a director.
		

		
			 
		

		
			Administration.  This Non-Employee Director Compensation Policy shall be administered by the Compensation and HR Committee of the Board.
		

		
			 
		

		
			Amendment and Termination.  The Board (or the Compensation and HR Committee thereof if so delegated authority) may terminate or amend this Non-Employee Director Compensation Policy at any time, including any amendments in the type and amount of compensation provided herein.
		

		 

		

			4

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