Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On May 26, 2020, independent directors of the Board of Directors (the "Board")
of Guardant Health, Inc. (the "Company") approved the grant of a long-term
performance-based restricted stock unit award ("PSUs") to each of the Company's
founders, Helmy Eltoukhy, the Company's Chief Executive Officer and AmirAli
Talasaz, the Company's President and Chief Operating Officer (the "Founders").
The Founders each received a grant of 1,695,574 PSUs, which vest based on the
Company's sustained achievement of pre-determined increases in the Company's
stock price over a seven-year period, as further described below.
The PSUs are intended to retain and incentivize the Founders to lead the Company
to sustained, long-term superior financial and operational performance. In
particular, the PSUs will focus the Founders on the long-term operational and
strategic development of the Company, including the successful development and
commercialization of the key LUNAR programs. The design of the PSUs builds upon
the successful Company performance that the Founders have led to-date, and the
Board believes the PSUs further align the Founders' interests with those of the
Company's long-term stockholders because the vesting, in addition to the value
the Founders will realize from the PSUs, if any, will depend on the creation of
significantly enhanced stockholder value over the following seven years. In
designing the PSUs the Compensation Committee was advised by an external,
independent compensation consultant.
The PSUs are the first equity compensation award granted to the Founders since
July 2017 (over a year prior to the Company's initial public offering). In
connection with the grants each Founder has entered into a letter agreement (the
"Waiver Letter") pursuant to which he agreed that he will not be eligible to
receive another equity-based or long-term incentive compensation award prior to
calendar year 2027. In addition, under the Waiver Letters each Founder agreed
(i) to reduce his annual base salary to $1 until the seventh anniversary of the
grant date and (ii) to not be eligible to receive an annual bonus with respect
to 2020 or for any period prior to the seventh anniversary of the grant date.
The Board believes that the nominal cash compensation, coupled with PSUs' design
(of vesting upon the achievement of significant stock price appreciation goals),
ensures that the Founders' compensation over the next seven years is directly
tied to the Company's achievement of superior performance.
The number of PSUs was determined by dividing $131,000,000 by the Company's
volume-weighted average stock price over the 180 days ending on the grant date
(such price, the "VWAP Price"). The PSUs generally will vest as to 1/3 of the
total PSUs upon the Company's common stock closing price achieving and
sustaining, for 30 consecutive calendar days, $120, $150 or $200 per share. No
PSUs will vest if the Company's stock price does not attain $120 per share (and
maintain such appreciation for 30 calendar days) prior to the Expiration Date
(defined below). Any PSUs that remain unvested on May 26, 2027 (the "Expiration
Date") automatically will be terminated without consideration.
Upon a termination of a Founder's employment, the PSUs will be treated as
follows, subject to the Founder's timely execution and non-revocation of a
general release of claims:
•      If the Founder's employment is terminated by the Company without cause or
       by the Founder for good reason, then one-third of the total PSUs will
       vest. Any then-remaining unvested PSUs will stay outstanding for up to six
       months following the Founder's termination of employment and will vest to
       the extent the Company achieves a stock price goal during such time
       period.


•      The PSUs will vest in full upon a termination of the Founder's employment
       due to his death.

--------------------------------------------------------------------------------



•      If the Founder's employment terminates due to his disability, then the
       PSUs will remain outstanding and eligible to vest through the later to
       occur of (x) the one-year anniversary the termination date and (y) the
       four-year anniversary of the grant date (but not beyond the Expiration
       Date).


In the event of a change in control of the Company:
•      If the price per share received by the Company's common stockholders in a
       change in control exceeds the greater of (i) the fair market value of the
       Company's stock on the grant date and (ii) the VWAP Price, but is less
       than $120 per share, then one-third of the total PSUs will vest.


•      If the price per share received by the Company's common stockholders in a
       change in control equals or exceeds $120 per share, then the PSUs will
       vest with respect to any stock price goal achieved by the deal price. In
       addition, if the deal price is between two stock price goals, then either
       50% or 100% of the PSUs associated with the greater goal will vest
       (depending on whether the deal price is more or less than 50% between the
       two goals).


•      In addition, if any then-remaining unvested PSUs are assumed, they will
       continue to be eligible to vest following the transaction based on the
       achievement of stock price goals adjusted to reflect the transaction.


To the extent any PSUs vest and the Founders receive shares of the Company's
common stock in settlement of such PSUs, such shares may not be transferred for
a period of time following the vesting date (subject to certain limited
exceptions). For shares received in settlement of PSUs vesting within three
years of the grant date, the Founders must hold such shares for one year
following their vesting date, and for shares received in settlement of PSUs
vesting more than four years from the grant date, for six months following their
vesting date.
The foregoing description of the PSUs is a summary only and does not describe
all terms and conditions applicable to these awards. The description is subject
to an qualified in its entirety by the terms of the form of Performance-Based
Restricted Stock Unit Agreement, a copy of which is filed as Exhibit 10.1 to
this Form 8-K, and is incorporated by reference herein.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No.   Description
   10.1         Form of Performance-Based Restricted Stock Unit Agreement
   10.2         Form of Waiver Letter Agreement

--------------------------------------------------------------------------------

© Edgar Online, source Glimpses