Exhibit 10.55

INSPIRE PHARMACEUTICALS, INC.

DIRECTOR COMPENSATION POLICY

 

Amended and Restated: December 18, 2009   Page 1 of 5

 

 

All non-employee members (each, a “Director” and, collectively, the “Directors”)
of the Inspire Pharmaceuticals, Inc. (the “Company”) Board of Directors (the
“Board”) shall receive the following compensation pursuant to this Director
Compensation Policy (this “Policy”):

 

A. Cash Compensation.

1. Each Director shall receive $40,000 annually to cover general availability
and participation in meetings and conference calls of the Board;

2. Each member of the Audit Committee, Corporate Governance Committee,
Compensation Committee and Development Committee shall receive $15,000 annually
to cover general availability and participation in Audit Committee conference
calls and meetings;

3. The Chairman of each of the committees identified above shall receive an
additional $15,000 annually, for a total of $30,000 in respect of service for
such committee; and

4. All cash compensation payments made pursuant to this Policy shall be paid
quarterly in arrears as soon as practicable, but not later than 10 days, after
the last day of such quarter.

 

B. Equity Compensation – Stock Option Grants.

1. A stock option grant in a number of shares equal in value to $80,000, rounded
to the nearest whole number, which value shall be based on the closing price of
the Company’s common stock on the date of grant, will be granted to each
Director upon initial election to the Board, which stock option will vest over
three years commencing on the date of grant as follows: 40% of such shares in
year one (10% of the total shares per quarter), 30% of such shares in year two
(7.5% of the total shares per quarter) and 30% of such shares in year three
(7.5% of the total shares per quarter); provided, however, that all vesting will
cease if the Director resigns from the Board or otherwise ceases to serve as
Director, unless the Board determines that the circumstances warrant
continuation of vesting;

2. A stock option grant in a number of shares equal in value to $40,000, rounded
to the nearest whole number, which value shall be based on the closing price of
the

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Company’s common stock on the date of grant, will be granted to each Director at
the time of each annual meeting of the Board of Directors, which stock option
will vest over the one year period commencing on the date of grant (25% of the
total shares per quarter); provided, however, that all vesting will cease if the
Director resigns from the Board or otherwise ceases to serve as Director, unless
the Board determines that the circumstances warrant continuation of vesting; and

3. A stock option grant in a number of shares equal in value to $20,000, rounded
to the nearest whole number, which value shall be based on the closing price of
the Company’s common stock on the date of grant, will be granted to the Chairman
of the Board at the time of the annual meeting of the Board of Directors, which
stock option grant will vest over the one year period commencing on the date of
grant (25% of the total shares per quarter); provided, however, that all vesting
will cease if such person resigns from the position of Chairman of the Board or
otherwise ceases to serve as Chairman of the Board, unless the Board determines
that the circumstances warrant continuation of vesting.

 

C. Equity Compensation – Restricted Stock Units.

1. A restricted stock unit grant in a number of units equal in value to $80,000,
rounded to the nearest whole number, which value shall be based on the closing
price of the Company’s common stock on the date of grant, will be granted to
each Director upon initial election to the Board, which grant will vest over
three years as follows: 40% of such units on June 1st of the year following the
date of grant, 30% of such units on June 1st of the second year following the
date of grant, and 30% of such units on June 1st of the third year following the
date of grant (or the date of the annual meeting of stockholders such year, if
earlier); provided, however, that all vesting will cease if the Director resigns
from the Board or otherwise ceases to serve as Director, unless the Board
determines that the circumstances warrant continuation of vesting;

2. A restricted stock unit grant in a number of shares equal in value to
$40,000, rounded to the nearest whole number, which value shall be based on the
closing price of the Company’s common stock on the date of grant, will be
granted to each Director at the time of each annual meeting of the Board of
Directors, which grant will vest on June 1st of the year following the date of
grant (or the date of the annual meeting of stockholders such year, if earlier);
provided, however, that all vesting will cease if the Director resigns from the
Board or otherwise ceases to serve as Director, unless the Board determines that
the circumstances warrant continuation of vesting; and

3. A restricted stock unit grant in a number of shares equal in value to
$20,000, rounded to the nearest whole number, which value shall be based on the
closing price of the Company’s common stock on the date of grant, will be
granted to the Chairman of the Board at the time of the annual meeting of the
Board of Directors, which grant will vest on June 1st of the year following the
date of grant (or the date of the annual meeting of stockholders such year, if
earlier); provided, however, that all vesting will cease if such person resigns
from the position of Chairman of the Board or otherwise ceases to serve as

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INSPIRE DIRECTOR COMPENSATION POLICY    PAGE 3 OF 5

 

Chairman of the Board, unless the Board determines that the circumstances
warrant continuation of vesting.

 

D. Equity Compensation – Miscellaneous. All equity compensation awarded pursuant
to this Policy (other than equity compensation granted pursuant to Paragraph E
and, in certain circumstances options granted pursuant to Paragraph B.1 and
restricted stock units grant pursuant to Paragraph C.1) shall be granted on the
date of the annual meeting of the Board of Directors. The exercise price for
each share available under a stock option will be equal to the closing price of
the Company’s common stock on the date of grant. No equity compensation granted
pursuant to this Policy shall be awarded for a fraction of a share.

 

E. Vacancies. In the event that a Director is appointed to fill a vacancy on the
Board, any Committee of the Board, or as Chairman of the Board, the Board will
determine the amount and timing of cash and equity compensation appropriate to
provide such Director with comparable compensation for the period such Director
will so serve for the remainder of the term.

 

F. Effective Date. All provisions of this Policy shall be effective as of
January 1, 2010; provided, however, that all equity compensation provisions of
this Policy shall be effective on the date of the 2010 annual meeting of the
Board of Directors for Directors serving on the Board prior to January 1, 2010.

 

G. Change of Control Provisions. Notwithstanding the foregoing, all equity
compensation granted under this Policy shall vest immediately if: (i) there is a
Change of Control (as hereinafter defined); and (ii) the optionee will cease to
serve as a Director of the Company as a result of such Change of Control.

1. For purposes of this Policy, a “Change of Control” means the determination
(which may be made effective as of a particular date) by the Board, made by a
majority vote that a Change of Control has occurred, or is about to occur. Such
a change shall not include, however, a restructuring, reorganization, merger or
other change in capitalization in which the Persons (as defined below) who own
an interest in the Company on the date hereof (the “Current Owners”) (or any
individual or entity which receives from a Current Owner an interest in the
Company through will or the laws of descent and distribution or otherwise)
maintain more than a fifty percent (50%) interest in the resultant entity.
Regardless of the vote of the Board or whether or not the Board votes, a Change
of Control will be deemed to have occurred as of the first day any one (1) or
more of the following subsections shall have been satisfied:

 

  (a)

Any Person (other than the Person in control of the Company as of the date of
this Agreement, or other than a trustee or other fiduciary holding securities
under an employee benefit plan of the Company, or a company owned directly or
indirectly by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company), becomes the beneficial
owner, directly or indirectly, of securities of the Company representing more
than thirty-five percent

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(35%) of the combined voting power of the Company’s then outstanding securities;
or

 

  (b) The stockholders of the Company approve:

 

  (i) A plan of complete liquidation of the Company;

 

  (ii) An agreement for the sale or disposition of all or substantially all of
the Company’s assets; or

 

  (iii) A merger, consolidation or reorganization of the Company with or
involving any other company, other than a merger, consolidation or
reorganization that would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) at least fifty percent (50%) of the combined voting power of
the voting securities of the Company (or such surviving entity) outstanding
immediately after such merger, consolidation or reorganization.

2. However, in no event shall a Change of Control be deemed to have occurred,
with respect to the optionee, if the optionee is part of a purchasing group
which consummates the Change of Control transaction. The optionee shall be
deemed “part of the purchasing group” for purposes of the preceding sentence if
the optionee is an equity participant or has agreed to become an equity
participant in the purchasing company or group (except for (i) passive ownership
of less than five percent (5%) of the voting securities of the purchasing
company; or (ii) ownership of equity participation in the purchasing company or
group which is otherwise deemed not to be significant, as determined prior to
the Change of Control by a majority of the continuing non-employee Directors).

3. For purposes of this Paragraph G, “Person(s)” shall have the meaning given in
Section 3(a)(9) of the Securities Exchange Act of 1934 (the “Exchange Act”), as
modified and used in Sections 13(d) and 14(d) thereof, except that such term
shall not include (A) the Company or any of its subsidiaries; (B) a trustee or
other fiduciary holding securities under an employee benefit plan of the Company
or any of its subsidiaries; (C) an underwriter temporarily holding securities
pursuant to an offering of such securities; (D) a corporation owned, directly or
indirectly, by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company; or (E) an entity or
entities which are eligible to file and have filed a Schedule 13G under Rule
13d-l(b) of the Exchange Act, which Schedule indicates beneficial ownership of
fifteen percent (15%) or more of the outstanding shares of common stock of the
Company or the combined voting power of the Company’s then outstanding
securities.

 

H. Equity Ownership Guidelines.

1. To further align the interests of the Directors with stockholders, the Board
has established the following minimum stock ownership guidelines that apply to
the Directors:

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each Director is expected to own shares of the Company’s common stock or common
stock equivalents equal in value to three times the amount of their annual cash
retainer, which annual cash retainer amount is set forth in Section A.1 above.

2. Equity that counts toward satisfaction of these guidelines include: shares of
the Company’s common stock purchased on the open market by the Director and his
or her immediate family members who share the same household, whether held
individually or jointly; shares of the Company’s common stock acquired through
stock option exercise; restricted stock, restricted stock units and deferred
stock units, where the restrictions have lapsed; and shares of common stock
beneficially owned in a trust for estate planning purposes.

3. To achieve the ownership amount set forth in this guideline, until these
guidelines are met, it is expected that each Director will retain at least fifty
percent (50%) of the net number of shares of common stock received upon the
exercise of a stock option or vesting of other equity compensation received from
the Company after accounting for the sale of shares necessary to pay applicable
taxes associated therewith.

4. There may be instances where these guidelines would place a severe hardship
on a Director or prevent a Director from complying with a court order. In these
circumstances, upon the request of a Director, the Board or the Compensation
Committee of the Board will make a decision as to whether an exemption will be
granted and an alternative equity ownership guideline established for the
applicable Director that reflects the intention of these guidelines and the
Director’s individual circumstances.