Document:

Document

Exhibit 10.1

THIRD AMENDMENT TO CREDIT AGREEMENT

This Third Amendment to Credit Agreement (this “Third Amendment”) is entered into as of February 19, 2021, and effective in accordance with Section 2 below, by and among COBANK, ACB (“CoBank”) for its own benefit as a Syndication Party, and as the Administrative Agent for the benefit of the present and future Syndication Parties (in that capacity, “Administrative Agent”), the Syndication Parties party hereto, and CHS INC., a cooperative corporation formed under the laws of the State of Minnesota, whose address is 5500 Cenex Drive, Inver Grove Heights, Minnesota 55077 (“Borrower”).

Recitals:

A.    CoBank, in its capacity as Administrative Agent (“Administrative Agent”) and as a Syndication Party, the Syndication Parties signatory thereto (collectively with any Persons who have become or who become Syndication Parties, “Syndication Parties”), and Borrower have entered into that certain 2015 Credit Agreement (10-Year Term Loan) dated as of September 4, 2015 (as amended by that First Amendment to Credit Agreement dated as of June 30, 2016, that Second Amendment to Credit Agreement dated as of July 16, 2019, and as further amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), pursuant to which the Syndication Parties have extended certain credit facilities to Borrower under the terms and conditions set forth in the Credit Agreement. 

B.    Borrower has requested that the Administrative Agent and the Syndication Parties amend certain terms of the Credit Agreement, which the Administrative Agent and the Syndication Parties are willing to do under the terms and conditions as set forth in this Third Amendment.

Agreement:

Now, therefore, in consideration of the mutual covenants and agreements herein contained and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto hereby agree as follows:

1.    Amendments to Credit Agreement.  The Credit Agreement is hereby amended as follows:

(a)    The following definitions are hereby added to Article 1 of the Credit Agreement in the appropriate alphabetical order: 

Third Amendment:  means that certain Third Amendment to Credit Agreement dated as of the Third Amendment Effective Date, by and among Borrower, the Syndication Parties party thereto and the Administrative Agent.

Third Amendment Effective Date:  means February 19, 2021.

(b)    The definition of “Existing Loans” in Article 1 of the Credit Agreement, is hereby amended in its entirety to read as follows: 

Existing Loans:  means (a) all term loans outstanding immediately prior to the effectiveness of the Third Amendment and (b) all Loans which were converted into a separate tranche of term loan pursuant to Section 2.1.4 of this Agreement (prior to giving effect to the Third Amendment), with the sum of clauses (a) and (b) set forth on Schedule 1 hereto. 

(c)    The definition of “Revolving Availability Period” in Article 1 of the Credit Agreement is hereby amended in its entirety to read as follows

Revolving Availability Period:  means the period from the Third Amendment Effective Date until February 19, 2022. 

(d)    The definition of “Revolving Commitment” in Article 1 of the Credit Agreement is hereby amended in its entirety to read as follows:  

Revolving Commitment:  means $366,000,000, subject to reduction as provided in Section 2.8 or 2.1.4 hereof.  For the avoidance of doubt, the Revolving Commitment shall be fully drawn and funded on the Third Amendment Effective Date pursuant to Section 2.1.3. 

(e)    The definition of “Revolving Loan Credit Agreement” in Article 1 of the Credit Agreement is hereby amended in its entirety to read as follows:

Revolving Loan Credit Agreement: means the 2019 Second Amended and Restated Credit Agreement (5-Year Revolving Loan) entered into on July 16, 2019 (as amended, restated, supplemented or otherwise modified) by and among CoBank, as joint lead arranger, administrative agent and bid agent, Coöperatieve Rabobank U.A., New York Branch and Sumitomo Mitsui Banking Corporation., as syndication agents, the other joint lead arrangers party thereto, the syndication parties party thereto and CHS Inc., as borrower.

(f)    In the definition of “Term Commitment” in Article 1 of the Credit Agreement, the reference to “First Amendment Effective Date” is hereby replaced with a reference to “Third Amendment Effective Date”.

(g)    Section 2.1.3 of the Credit Agreement is hereby amended in its entirety to read as follows: 

2.1.3    Converted Existing Loans.  On the Third Amendment Effective Date:

(a)    the entirety of the Existing Loans in the aggregate outstanding principal amount of $366,000,000 (the “Converted Existing Loans”) shall be converted into a separate tranche of Revolving Loans hereunder (the “Initial Revolving Loans”) to be held by each Syndication Party pro rata based on such Syndication Party’s Applicable Percentage on the Third Amendment Effective Date;

(b)    the Initial Revolving Loans shall be deemed to continue as LIBO Rate Loans with the same interest rate and LIBO Rate Period as the then current interest rate and LIBO Rate Period with respect to the Converted Existing Loans;

(c)    [reserved];

(d)    the Administrative Agent shall, in consultation with Borrower, make such reallocations, sales, assignments or other relevant actions in respect of each Syndication Party’s credit and loan exposure under the Original Credit Agreement as are necessary in the judgment of the Administrative Agent in order that each such Syndication Party’s outstanding Loans hereunder reflect such Syndication Party’s ratable share of the Loans on the Third Amendment Effective Date; and

(e)    Borrower hereby agrees to compensate each Syndication Party for any and all losses, costs and expenses incurred by such Syndication Party in connection with the conversion of the Converted Existing Loans or the sale and assignment of any LIBO Rate Loans and such reallocation described above, in each case on the terms and in the manner set forth in Section 4.7.

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(g)    Section 3.6 of the Credit Agreement is hereby amended in its entirety to read as follows:

3.6     Revolving Facility Commitment Fees.  Subject to Section 13.30, Borrower shall pay or cause to be paid a non-refundable fee (“Revolving Facility Commitment Fee”) calculated in arrears and which shall accrue beginning on the Third Amendment Effective Date and each month thereafter, until the earlier of (a) the Revolving Commitments have been terminated and the Syndication Parties have no further obligation to make a Revolving Loan and (b) the termination of the Revolving Availability Period.  The Revolving Facility Commitment Fee for each such period shall be equal to (a) the average daily result of (i) the Revolving Commitment in effect during such period minus (ii) Revolving Loans during such period, (b) multiplied by the average daily Revolving Facility Commitment Fee Amount in effect during such period, as converted to a daily rate using a year of 360 days, (c) with the product thereof being further multiplied by the number of days in such period.  The Revolving Facility Commitment Fee shall be payable to the Administrative Agent in arrears on the Banking Day coinciding with, or immediately preceding the fifth (5th) day after the close of each such month, for distribution to each Syndication Party in the ratio that its Individual Commitment with respect to the Revolving Facility bears to the Revolving Commitment as calculated by the Administrative Agent on the last day of each such month.

(h)    Exhibit 13.28 is hereby renamed “Third Amendment Effective Date Voting Participants” and amended and restated in its entirety to read as set forth on Exhibit 13.28 attached hereto.

(i)    Schedules 1 and 2 of the Credit Agreement are hereby amended and restated in their entireties to read as set forth on Schedule 1 and 2 attached hereto. 

2.    Condition to Effectiveness of this Third Amendment.  The effectiveness of this Third Amendment is subject to satisfaction, in the Administrative Agent’s sole discretion, of each of the following conditions precedent:

2.1    Delivery of Executed Loan Documents.  Borrower and Syndication Parties (including any Replacement Lender) shall have delivered to the Administrative Agent this Third Amendment (or their approval thereof, in the case of Voting Participants), duly executed.

2.2    Representations and Warranties.  The representations and warranties of Borrower in the Credit Agreement shall be true and correct in all material respects on and as of the Third Amendment Effective Date as though made on and as of such date.

2.3    No Potential Default or Event of Default.  No Potential Default or Event of Default shall have occurred and be continuing under the Credit Agreement as of the Third Amendment Effective Date.

2.4    Payment of Fees and Expenses.  Borrower shall have paid the Administrative Agent, by wire transfer of immediately available funds, all fees and expenses presently due under the Credit Agreement (as amended by this Third Amendment) and any other fees owing to the Administrative Agent or the Syndication Parties which are due on the Third Amendment Effective Date.

2.5    Appointment of Agent for Service.  The Administrative Agent shall have received evidence satisfactory to the Administrative Agent that Borrower has appoint Corporation Service Company to serve as its agent for service of process at the New York, New York office, and that Corporation Service Company has accepted such appointment by Borrower.

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2.6    Documentation Required by Regulatory Authorities.  The Syndication Parties shall have received, to the extent requested on or prior to five (5) Banking Days before the Third Amendment’s Effective Date, (a) all documentation and other information required by regulatory authorities under applicable “Know Your Customer” and anti-money laundering rules and regulations, including, without limitation, the USA Patriot Act and (b) a Beneficial Ownership Certification in relation to Borrower.

2.7    Organizational Documents.  The Administrative Agent shall have received: (a) a good standing certificate, dated no more than thirty (30) days prior to the Third Amendment Effective Date, for Borrower for its state of incorporation; (b) a copy of the articles of incorporation of Borrower (and any amendments thereto), certified as true and complete by the Secretary or Assistant Secretary of Borrower; and (c) a copy of the bylaws of Borrower, certified as true and complete by the Secretary or Assistant Secretary of Borrower.

2.8    Evidence of Corporate Action.  The Administrative Agent shall have received in form and substance satisfactory to the Administrative Agent: (a) documents evidencing all corporate action taken by Borrower to authorize (including the specific names and titles of Authorized Officers) the execution, delivery and performance of the Third Amendment, certified to be true and correct by the Secretary or Assistant Secretary of Borrower; and (b) a certificate of the Secretary or Assistant Secretary of Borrower, dated the Third Amendment Effective Date, certifying the names and true signatures of the Authorized Officers.

3.    General Provisions.

3.1    No Other Modifications.  The Credit Agreement, as expressly modified herein, shall continue in full force and effect and be binding upon the parties thereto.

3.2    Successors and Assigns.  This Third Amendment shall be binding upon and inure to the benefit of Borrower, Administrative Agent, and the Syndication Parties, and their respective successors and assigns, except that Borrower may not assign or transfer its rights or obligations hereunder without the prior written consent of all the Syndication Parties.

3.3    Definitions.  Capitalized terms used, but not defined, in this Third Amendment shall have the meaning set forth in the Credit Agreement (as amended hereby).

3.4    Severability.  Should any provision of this Third Amendment be deemed unlawful or unenforceable, said provision shall be deemed several and apart from all other provisions of this Third Amendment and all remaining provision of this Third Amendment shall be fully enforceable.

3.5    Governing Law.  To the extent not governed by federal law, this Third Amendment and the rights and obligations of the parties hereto shall be governed by, interpreted and enforced in accordance with the laws of the State of New York.

3.6    Loan Document.  This Third Amendment shall constitute a “Loan Document” for all purposes of the Credit Agreement and the other Loan Documents.

3.7    Headings.  The captions or headings in this Third Amendment are for convenience only and in no way define, limit or describe the scope or intent of any provision of this Third Amendment.

3.8    Counterparts.  This Third Amendment may be executed by the parties hereto in separate counterparts, each of which, when so executed and delivered, shall be an original, but all such counterparts shall together constitute one and the same instrument. Each counterpart may consist of a number of copies hereof, each signed by less than all, but together signed by all of the parties hereto. 
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Copies of documents or signature pages bearing original signatures, and executed documents or signature pages delivered by a party by telefax, facsimile, or e-mail transmission of a PDF document shall, in each such instance, be deemed to be, and shall constitute and be treated as, an original signed document or counterpart, as applicable. Any party delivering an executed counterpart of this Third Amendment by telefax, facsimile, or e-mail transmission of an Adobe ® file format document also shall deliver an original executed counterpart of this Third Amendment, but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Third Amendment.

IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment to be executed as of the Third Amendment Effective Date.

[Signature Pages Follow]

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BORROWER:

CHS INC., a cooperative corporation formed under the laws of the State of Minnesota

						
	By:	/s/ Olivia Nelligan
	Name:	Olivia Nelligan
	Title:	Executive Vice President and Chief Financial Officer

CHS INC.
THIRD AMENDMENT TO 2015 CREDIT AGREEMENT (10-YEAR TERM LOAN)
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ADMINISTRATIVE AGENT:

COBANK, ACB

						
	By:	/s/ Michael Tousignant
	Name:	Michael Tousignant
	Title:	Vice President 

CHS INC.
THIRD AMENDMENT TO 2015 CREDIT AGREEMENT (10-YEAR TERM LOAN)
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SYNDICATION PARTIES:                                    COBANK, ACB

						
	By:	/s/ Michael Tousignant
	Name:	Michael Tousignant
	Title:	Vice President 

CHS INC.
THIRD AMENDMENT TO 2015 CREDIT AGREEMENT (10-YEAR TERM LOAN)
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COMPEER FINANCIAL, PCA, as a Syndication Party

						
	By:	/s/ Daniel J. Best 
	Name:	Daniel J. Best
	Title:	Director, Capital Markets

CHS INC.
THIRD AMENDMENT TO 2015 CREDIT AGREEMENT (10-YEAR TERM LOAN)
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COMPEER FINANCIAL, FLCA, as a Voting Participant

						
	By:	/s/ Daniel J. Best 
	Name:	Daniel J. Best
	Title:	Director, Capital Markets

CHS INC.
THIRD AMENDMENT TO 2015 CREDIT AGREEMENT (10-YEAR TERM LOAN)
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FARM CREDIT SERVICES OF AMERICA, PCA, as a Syndication Party

						
	By:	/s/ Curt A. Brown
	Name:	Curt A. Brown
	Title:	Vice President

CHS INC.
THIRD AMENDMENT TO 2015 CREDIT AGREEMENT (10-YEAR TERM LOAN)
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AGCOUNTRY FARM CREDIT, FLCA, as a Voting Participant

						
	By:	/s/ Warren Shoen
	Name:	Warren Shoen
	Title:	Sr. Vice President

CHS INC.
THIRD AMENDMENT TO 2015 CREDIT AGREEMENT (10-YEAR TERM LOAN)
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AGFIRST FARM CREDIT BANK, as a Voting Participant

						
	By:	/s/ Michael C. Hawkins
	Name:	Michael C. Hawkins
	Title:	AVP

CHS INC.
THIRD AMENDMENT TO 2015 CREDIT AGREEMENT (10-YEAR TERM LOAN)
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AMERICAN AGCREDIT, FLCA, as a Voting Participant

						
	By:	/s/ Daniel K. Hansen
	Name:	Daniel K. Hansen
	Title:	Vice President

CHS INC.
THIRD AMENDMENT TO 2015 CREDIT AGREEMENT (10-YEAR TERM LOAN)
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FARM CREDIT BANK OF TEXAS, as a Voting Participant

						
	By:	/s/ Luis M. H. Requejo
	Name:	Luis M. H. Requejo
	Title:	Director Capital Markets

CHS INC.
THIRD AMENDMENT TO 2015 CREDIT AGREEMENT (10-YEAR TERM LOAN)
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FARM CREDIT EAST, ACA, as a Voting Participant

						
	By:	/s/ Benjamin Thompson
	Name:	Benjamin Thompson
	Title:	Vice President 

CHS INC.
THIRD AMENDMENT TO 2015 CREDIT AGREEMENT (10-YEAR TERM LOAN)
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FARM CREDIT MID-AMERICA, FLCA, as a Voting Participant

						
	By:	/s/ Steven L. Moore
	Name:	Steven L. Moore
	Title:	Vice President 

CHS INC.
THIRD AMENDMENT TO 2015 CREDIT AGREEMENT (10-YEAR TERM LOAN)
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FARM CREDIT WEST, FLCA, as a Voting Participant

						
	By:	/s/ Nathan Garcin
	Name:	Nathan Garcin
	Title:	Vice President, Capital Markets 

CHS INC.
THIRD AMENDMENT TO 2015 CREDIT AGREEMENT (10-YEAR TERM LOAN)
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FRESNO MADERA PRODUCTION CREDIT ASSOCIATION, as a Voting Participant

						
	By:	/s/ Robert Herrick
	Name:	Robert Herrick
	Title:	D.C.M.

CHS INC.
THIRD AMENDMENT TO 2015 CREDIT AGREEMENT (10-YEAR TERM LOAN)
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GREENSTONE FARM CREDIT SERVICES, FLCA, as a Voting Participant

						
	By:	/s/ Bradley Hibbert
	Name:	Bradley Hibbert
	Title:	VP of Capital Markets

CHS INC.
THIRD AMENDMENT TO 2015 CREDIT AGREEMENT (10-YEAR TERM LOAN)
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NORTHWEST FARM CREDIT SERVICES, FLCA, as a Voting Participant

						
	By:	/s/ Casey Kinzer
	Name:	Casey Kinzer
	Title:	Vice President

CHS INC.
THIRD AMENDMENT TO 2015 CREDIT AGREEMENT (10-YEAR TERM LOAN)
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CAPITAL FARM CREDIT, FLCA, as a Voting Participant

						
	By:	/s/ Vladimir Kolesnikov
	Name:	Vladimir Kolesnikov
	Title:	Capital Markets Director

CHS INC.
THIRD AMENDMENT TO 2015 CREDIT AGREEMENT (10-YEAR TERM LOAN)
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Exhibit 13.28 
to Credit Agreement 
Third Amendment Effective Date Voting Participants

						
	Name	Participation Amount
	AgCountry Farm Credit Services, FLCA	$35,380,000.00
	AgFirst Farm Credit Bank	$24,400,000.00
	American AgCredit, FLCA	$9,150,000.00
	Capital Farm Credit, FLCA	$18,479,950.00
	Compeer Financial, FLCA 1
	$29,280,000.00
	Farm Credit Bank of Texas	$44,350,050.00
	Farm Credit East, ACA	$6,710,000.00
	Farm Credit Mid-America, FLCA	$29,280,000.00
	Farm Credit West, FLCA	$12,200,000.00
	Fresno Madera Production Credit Association, ACA	$5,063,000.00
	GreenStone Farm Credit Services, FLCA	$14,640,000.00
	Northwest Farm Credit Services, FLCA	$10,980,000.00
	Yankee Farm Credit, ACA	$7,500,000.00

1 Immediately after giving effect to the Third Amendment, CoBank’s participation to Compeer Financial, FLCA shall be cancelled and Compeer Financial, FLCA shall no longer be a Voting Participant.
Exhibit 13.28

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Schedule 1 
to Credit Agreement 
SYNDICATION PARTIES AND INDIVIDUAL COMMITMENTS AND OUTSTANDING LOANS

												
	Syndication Party Name	Existing Loans2
	Individual Commitment – Revolving Facility	Revolving Loans3

	CoBank, ACB4
	$317,200,000.00	86.666666667%	$317,200,000.00
	Compeer Financial, PCA (successor to AgStar Financial Services, PCA)
	$29,280,000.00	8.000000000%	$29,280,000.00
	Farm Credit Services of America, PCA5
	$19,520,000.00	5.333333333%	$19,520,000.00
	TOTAL	$366,000,000.00	100.00000000%	$366,000,000.00

2 Principal amount outstanding immediately prior to giving effect to the Third Amendment.
3 Principal amount outstanding as of the Third Amendment Effective Date. 
4 Immediately after giving effect to the Third Amendment, CoBank will assign $29,280,000.00 of its Individual Commitment – Revolving Facility, to Compeer Financial, PCA.
5 Immediately after giving effect to the Third Amendment, Farm Credit Services of America, PCA, will assign $19,520,000.00 of its Individual Commitment – Revolving Facility, to CoBank, ACB. 

Schedule 1

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Schedule 2 
to Credit Agreement 
APPLICABLE MARGIN AND COMMITMENT FEE AMOUNT

Subject to the provisions of Sections 3.5 and 3.6, the determination of the Applicable Margin, Revolving Facility Commitment Fee Amount and Term Facility Commitment Fee Amount will be (i) made effective five (5) Banking Days after the Administrative Agent receives quarterly financial statements from Borrower and (ii) determined, subject to Sections 3.5 and 3.6, as applicable, as set forth in the most recent Compliance Certificate received pursuant to Sections 9.2.1 and 9.2.2; however, no adjustments will be made to the LIBO Rate applicable to LIBO Rate Loans then outstanding until the end of their then current LIBO Rate Period. For the period from the Third Amendment Effective Date and until the Administrative Agent receives quarterly financial statements from Borrower for the Fiscal Quarter ended February 28, 2021, the Applicable Margin, Revolving Facility Commitment Fee Amount and Term Facility Commitment Fee Amount shall be determined pursuant to Tier 2.

															
	TIER	Ratio of Consolidated Funded Debt to Consolidated Cash Flow	LIBO Rate Applicable Margin	Base Rate Applicable Margin	Revolving / Term Facility Commitment Fee Amount
	Tier 1	≤ 2.00	150.0 basis points	50.0 basis points	15.0 basis points
	Tier 2	> 2.00 ≤ 3.00	175.0 basis points	75.0 basis points	20.0 basis points
	Tier 3	˃ 3.00	200.0 basis points	100.0 basis points	27.5 basis points

Schedule 2

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EXHIBIT 10.12

ADAPTIVE BIOTECHNOLOGIES CORPORATION

NON-EMPLOYEE DIRECTOR COMPENSATION POLICY

 

Last updated February 14, 2021

Adaptive Biotechnologies Corporation, a Washington corporation (the “Company”), believes that the granting of cash and equity compensation to the members of its Board of Directors (the “Board,” and members of the Board, the “Directors”) represents an effective tool to attract, retain and reward Directors who are not employees of the Company (the “Non-Employee Directors”).  This Non-Employee Director Compensation Policy (this “Policy”) is intended to formalize the Company’s policy regarding cash compensation and grants of equity 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 2019 Equity Incentive Plan (the “Plan”).  Each Non-Employee Director will be solely responsible for any tax obligations incurred by such Non-Employee Director as a result of the cash payments paid and equity awards granted to such Non-Employee Director under this Policy.

1.ANNUAL CASH COMPENSATION

Annual Cash Retainer

Each Non-Employee Director will be paid an annual cash retainer of $50,000.  There are no per-meeting attendance fees for attending Board or shareholder meetings.

Additional Chair and Lead Director Annual Cash Retainer

Each Non-Employee Director who serves as a lead director or chairman of a committee of the Board will be paid additional annual cash fees as follows:

		
	
Lead Independent Director:
	
$35,000

	
Audit Committee Chair:
	
$20,000

	
Compensation Committee Chair:
	
$15,000

	
Nominating and Corporate Governance Committee Chair:
	
$10,000

All cash compensation will be paid quarterly in arrears.

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.

2.EQUITY COMPENSATION

Non-Employee Directors will be entitled to receive all types of Awards (excluding Incentive Stock Options) under the Plan (or the applicable equity plan in place at the time of grant).  All grants of Awards to Non-Employee Directors pursuant to Section 2 of this Policy will be 

 

 

automatic and nondiscretionary, except as otherwise provided herein, and will be made in accordance with the following provisions and subject to Sections 4.5 and 13 of the Plan:

	
 
	
a.
	
Initial Award.  Each individual who first becomes a Non-Employee Director after the most recent update to this Policy will be granted an Award (the “Initial Award”), which grant will be effective on the date on which such individual first becomes a Non-Employee Director, whether through election by the shareholders of the Company or appointment by the Board to fill a vacancy.  The Initial Award will have an estimated fair value of $400,000, using valuation methodologies deemed appropriate by the Compensation Committee of the Board or the Board from time to time, in light of commercial considerations deemed necessary to fulfill the goals set forth in this Policy and to align directors with shareholder interests.  Fifty percent (50%) of the estimated fair value target of the Initial Award will be comprised of Nonstatutory Stock Options, and fifty percent (50%) of the estimated fair value target of the Initial Award will be comprised of Restricted Stock Units.

	
 
	
b.
	
Annual Award.  Each Non-Employee Director will be granted an Award (an “Annual Award”), on the date of the first Board meeting of each calendar year (unless the Board determines to award them on a different date), beginning with 2021, following the election or appointment of such Non-Employee Director to the Board; provided that any Non-Employee Director who is not continuing as a Director during the calendar year following such Board meeting will not receive an Annual Award with respect to such meeting.  The Annual Award will have an estimated fair value of $200,000 using valuation methodologies deemed appropriate by the Compensation Committee of the Board or the Board from time to time, in light of commercial considerations deemed necessary to fulfill the goals set forth in this Policy and to align directors with shareholder interests. Fifty percent (50%) of the estimated fair value target of the Annual Award will be comprised of Nonstatutory Stock Options, and fifty percent (50%) of the estimated fair value target of the Annual Award will be comprised of Restricted Stock Units.  

	
 
	
c.
	
Vesting.  Subject to Sections 2(d) and 5 below: (a) the Nonstatutory Stock Option portion of each Initial Award will vest over four (4) years, with 25% vesting on the one (1)-year anniversary of the vesting commencement date and monthly thereafter for thirty-six (36) months; (b) the Restricted Stock Unit portion of each Initial Award will vest annually over four (4) years following the vesting commencement date; (c) the Nonstatutory Stock Option portion of each Annual Award will vest monthly over one (1) year following the vesting commencement date; and (d) the Restricted Stock Unit portion of each Annual Award will vest entirely on the one (1) year anniversary of the vesting commencement date.

 

 

 

 

	
 
	
d.
	
Change in Control.  In the event of a Change in Control, each Non-Employee Director will fully vest in his or her Initial Award and/or each Annual Award provided that the Non-Employee Director continues to provide Service through such date.

3.TRAVEL EXPENSES

Each Non-Employee Director’s reasonable, customary and documented travel expenses to Board meetings will be reimbursed by the Company.

4.ADDITIONAL PROVISIONS

All provisions of the Plan not inconsistent with this Policy will apply to Awards granted to Non-Employee Directors.

5.ADJUSTMENTS

In the event that any dividend or other distribution (whether in the form of cash, Stock, other securities or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of Stock or other securities of the Company or other change in the corporate structure of the Company affecting the Stock occurs, the Board, in order to prevent diminution or enlargement of the benefits or potential benefits intended to be made available under this Policy, will adjust the number of shares of Stock issuable pursuant to Awards granted under this Policy.

6.LIMITATIONS

No Non-Employee Director may be issued in any fiscal year cash payments (including the fees under Section 1 above) and Awards (including Awards under Section 2 above) with aggregate value greater than $600,000, increased to $750,000 in the fiscal year of his or her initial service as a Non-Employee Director.  Any Awards or other compensation granted to an individual for his or her services as an employee, or for his or her services as a consultant other than a Non-Employee Director, will be excluded for purposes of the limitations under this Section 6.

7.SECTION 409A

In no event will cash compensation or expense reimbursement payments under this Policy be paid after the later of (a) the fifteenth (15th) day of the third (3rd) month following the end of the Company’s fiscal year in which the compensation is earned or expenses are incurred, as applicable, or (b) the fifteenth (15th) day of the third (3rd) month following the end of the calendar year in which the compensation is earned or expenses are incurred, as applicable, in compliance with the “short-term deferral” exception under Section 409A of the Internal Revenue Code of 1986, as amended, and the final regulations and guidance thereunder, as may be amended from time to time (together, “Section 409A”).  It is the intent of this Policy that this Policy and all payments hereunder be exempt from or otherwise comply with the requirements of Section 409A so that none of the compensation to be provided hereunder will be subject to the 

 

 

 

 

additional tax imposed under Section 409A, and any ambiguities or ambiguous terms herein will be interpreted to be so exempt or comply.  In no event will the Company reimburse a Non-Employee Director for any taxes imposed or other costs incurred as a result of Section 409A.

8.REVISIONS

The Board or any committee designated by the Board may amend, alter, suspend or terminate this Policy at any time and for any reason.  No amendment, alteration, suspension or termination of this Policy will materially impair the rights of a Non-Employee Director with respect to compensation that already has been paid or awarded, unless otherwise mutually agreed between the Non-Employee Director and the Company.  Termination of this Policy will not affect the Board’s or the Compensation Committee’s ability to exercise the powers granted to it under the Plan with respect to Awards granted under the Plan pursuant to this Policy prior to the date of such termination.

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