Exhibit 10.7

 

Compensation Policy

 

CYCLERION THERAPEUTICS, INC.

 

NON-EMPLOYEE DIRECTOR COMPENSATION POLICY

 

The purpose of this Non-Employee Director Compensation Policy (this “Policy”) of
Cyclerion Therapeutics, Inc. (the “Company”) is to set forth the total
compensation payable to non-employee directors of the Company for their service
as members of the Company’s Board of Directors (the “Board”). In furtherance of
this purpose, effective as of June 1, 2019, all non-employee directors shall be
entitled to receive the compensation described in, and subject to the terms and
conditions of, this Policy.

 

General Compensation Limit

 

The aggregate value of all compensation granted or paid to any non-employee
director with respect to any calendar year for his or her services as a
director, including awards under the Company’s 2019 Equity Incentive Plan (the
“2019 Equity Plan”), for his or her services as a director during such calendar
year may not exceed $400,000, with the value of any awards under the 2019 Equity
Plan calculated based on the grant date fair value and assuming maximum payout.

 

Non-Employee Director Compensation

 

Each non-employee director shall be entitled to receive the compensation
described below while serving as a director of the Company. The form of equity
compensation and amounts of equity compensation and cash compensation described
below may be modified for years after 2019 by the Board in its discretion.

 

Equity Compensation

 

Annual Stock Option Grant. On June 1, 2019, for the current year, and for
subsequent years, on the date of each annual meeting of stockholders of the
Company, each non-employee director shall be granted an equity award in the form
of a Stock Option to purchase 10,000 shares of the Company’s common stock, no
par value (the “Common Stock”), under the 2019 Equity Plan, having an exercise
price per share equal to the closing price of the Common Stock on the date of
grant.  Following June 1, 2019, if a non-employee director commences service or
terminates service on the Board at a time other than on the date of the annual
meeting, the number of shares subject to the Stock Option will be pro-rated
based on the number of days the director is expected to serve on the Board
before the next annual meeting.

 

General. The Stock Option awards to the non-employee directors shall vest in
full on the first anniversary of the grant date, and be subject to the terms and
conditions of the 2019 Equity Plan and the Stock Option Award Agreement entered
into with each director in connection with such awards.

 

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Cash Compensation

 

The cash fees to be paid to non-employee directors for service on the Board, for
service on each committee of the Board on which the non-employee director is
then a member and for service in such additional Board positions shall be as
follows:

 

1.                                      Annual Board Service Retainer:

 

a.                                      Non-Employee Directors, other than the
Chairperson: $35,000

 

b.                                      Chairperson: $65,000

 

2.                                      Annual Committee Chair Service Retainer:

 

a.                                      Chairperson of the Audit Committee:
$15,000

 

b.                                      Chairperson of the Compensation
Committee: $10,000

 

c.                                       Chairperson of the Nominating and
Corporate Governance Committee: $8,000

 

3.                                      Annual Committee Member Service
Retainer:

 

a.                                      Member of the Audit Committee: $7,500

 

b.                                      Member of the Compensation Committee:
$5,000

 

c.                                       Member of the Nominating and Corporate
Governance Committee: $4,000

 

The foregoing fees are payable in arrears in quarterly installments, with such
installments to be paid for any quarter during which the director served on the
Board, on such committee or in such position.  Following June 1, 2019, if a
non-employee director commences service or terminates service on the Board or a
committee of the Board at a time other than the annual meeting date, each annual
retainer set forth above will be pro-rated based on days served in the
applicable quarter, with the pro-rated amount paid for the first quarter in
which the non-employee director provides the service and regular full quarterly
payments thereafter. All annual cash fees are vested upon payment.

 

Expenses

 

The Company will reimburse non-employee directors for reasonable out-of-pocket
expenses incurred in connection with their service as members of the Board or
any committee of the Board; provided, that non-employee directors timely submit
to the Company appropriate documentation substantiating such expenses in
accordance with the Company’s expense reimbursement policy, as in effect from
time to time. The amount of such reimbursed expenses shall not apply toward or
otherwise be subject to the compensation limits set forth in this Policy under
the heading “General Compensation Limit.”

 

Additional Compensation

 

The Company will not provide additional compensation to non-employee directors,
directly or indirectly, other than as disclosed in this Policy or the Company’s
filings with the U.S. Securities and Exchange Commission.

 

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Amendments; Termination

 

This Policy may be amended or terminated upon the adoption of a resolution of
the Board.

 

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