VCEL Vericel Corporation

 

(e) Adoption of a Material Compensatory Plan

 

On May 3, 2023, the Board of Directors of Vericel Corporation (the “Company”) approved and adopted the Vericel Corporation Deferred Compensation Plan (the “Plan”). The Plan is a non-qualified deferred compensation plan that is intended to comply with Section 409A of the Internal Revenue Code of 1986, as amended. Participation in the Plan is limited to non-employee directors and, as determined by the Compensation Committee of the Board (the “Compensation Committee”) in its sole discretion, a select group of management or highly compensated employees of the Company. With respect to non-employee directors, the Plan is intended to amend, restate and supersede the Vericel Corporation Non-Employee Directors Deferred Compensation Program.

 

Pursuant to the Plan, a Plan participant may elect to defer up to 100% of his or her annual base salary, annual bonus and/or cash director fees, as applicable. In addition, a Plan participant may elect to defer up to 100% of each of his or her grants of restricted stock units (“RSUs”) under the Company’s 2022 Omnibus Incentive Equity Plan, as may be amended from time to time (the “Equity Plan”). The Company may also be required, in accordance with employment or other agreements, to contribute amounts to a Plan participant’s Plan account. The Plan also permits, but does not require, the Company to make discretionary contributions to participants’ Plan accounts.

 

Any RSUs deferred under the Plan shall, at the time the RSU would otherwise vest and become transferable to the Plan participant under the terms of the Equity Plan, but for the election to defer, be reflected on the books of the Company as an unfunded, unsecured promise to deliver to the Participant a specific number of actual shares of common stock in the future. All other deferrals under the plan shall be paid in cash to the participants. Participants’ deferrals of cash compensation shall at all times be 100% vested. All unvested contributions to a Plan participant’s account from the Company shall become 100% vested in the event of a change of control (as defined in the Plan) or upon a Plan participant’s death or disability.

 

Each participant’s deferred compensation account will be deemed invested in investments selected by the participant from a list of measurement funds selected by the Compensation Committee. Plan distributions will be made in a lump sum or annual installment payments as elected by the Plan participant in accordance with the Plan’s terms and conditions.

 

Obligations of the Company under the Plan represent at all times an unfunded and unsecured promise to pay money in the future. Each participant in the Plan is an unsecured general creditor of the Company with respect to deferred compensation obligations. Any amounts set aside to defray the liabilities assumed by the Company will remain the general, unpledged unrestricted assets of the Company.

 

The forgoing description is qualified in its entirety by reference to the Plan, a copy of which is attached hereto as Exhibit 10.1 and incorporated by reference into this Current Report on Form 8-K.