Exhibit 10.1

 

GENPREX, INC.

OUTSIDE DIRECTOR COMPENSATION POLICY

 

 

Genprex, Inc. (the “Company”) believes that the granting of equity and cash
compensation to its members of the 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 “Outside
Directors”). This Outside Director Compensation Policy (the “Policy”) is
intended to formalize the Company’s policy regarding cash compensation and
grants of equity to its Outside Directors. Unless otherwise defined herein,
capitalized terms used in this Policy will have the meaning given such term in
the Company’s 2018 Equity Incentive Plan (the “Plan”). Each Outside Director
will be solely responsible for any tax obligations incurred by such Outside
Director as a result of the equity and cash payments such Outside Director
receives under this Policy.

1.CASH COMPENSATION

a.Annual Cash Retainer. Each Outside Director will be paid an annual cash
retainer of $40,000. There are no per-meeting attendance fees for attending
Board meetings.

b.Committee Chair and Membership Annual Cash Retainer. Each Outside Director who
serves as chairman or a member of a committee of the Board will be paid
additional annual fees as follows:

 

•

Chairman of Audit Committee:   $20,000

 

•

Member of Audit Committee (other than the Chairman of the Audit
Committee):  $10,000

 

•

Chairman of Compensation Committee:  $10,000

 

•

Member of Compensation Committee (other than the Chairman of the Compensation
Committee):  $5,000

 

•

Chairman of Nominating and Corporate Governance Committee:  $10,000

 

•

Member of Nominating and Corporate Governance Committee (other than the Chairman
of the Nominating and Corporate Governance Committee):  $5,000

Each annual cash retainer and additional annual fee will be paid quarterly in
arrears on a prorated basis.

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

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compensation to be paid, on or after the date the Board determines to make any
such change or revision.

2.EQUITY COMPENSATION

Outside Directors will be entitled to receive all types of Awards (except
Incentive Stock Options) under the Plan (or the applicable equity plan in place
at the time of grant), including discretionary Awards not covered under this
Policy. All grants of Awards to Outside 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:

a.Initial Award. Each individual who first becomes an Outside Director following
the effective date of the registration statement in connection with the initial
public offering of the Company’s securities (the “Registration Date”) and
following the first annual meeting of the Company’s stockholders (an “Annual
Meeting”) following the Registration Date will automatically be granted an Award
(the “Initial Award”), which grant will be effective on the date on which such
individual first becomes an Outside Director, whether through election by the
stockholders of the Company or appointment by the Board to fill a vacancy. The
Initial Award will have a Value (as defined below) of $80,000 multiplied by a
fraction (1) the numerator of which is (x) 12 minus (y) the number of full
months between the date of the last Annual Meeting and the date the Outside
Director becomes a member of the Board and (2) the denominator of which is 12
(with the result rounded down to the nearest whole Share). For example, if nine
months have lapsed between the last Annual Meeting and the Outside Director’s
start date, his or her Initial Award will have a Value of $20,000. The Initial
Award will be comprised solely of Nonstatutory Stock Options.

b.Exceptions.  Notwithstanding the foregoing, a Director who is an Employee (an
“Inside Director”) who ceases to be an Inside Director, but who remains a
Director, will not receive an Initial Award.

c.Annual Award. Each Outside Director will be automatically granted an Award (an
“Annual Award”) with a Value of $80,000 (rounded down to the nearest whole
Share), which grant will be effective on the date of each Annual Meeting,
beginning with the first Annual Meeting following December 31, 2018; provided
that any Outside Director who is not continuing as a Director following the
applicable Annual Meeting will not receive an Annual Award with respect to such
Annual Meeting. The Annual Award will be comprised solely of Nonstatutory Stock
Options.

d.Exercise Price and Vesting. The Exercise Price of a Nonstatutory Stock Option
Award may not be less than 100% of the Fair Market Value on the date of grant of
the Award.  Subject to Sections 2.g and 5 below and Section 14 of the Plan, each
Initial Award and Annual Award will vest as to 100% of the Shares subject
thereto upon the earlier of the one (1) year anniversary of the grant date or
the day prior to the Company’s next Annual Meeting occurring after the grant
date, in each case, provided that the Outside Director continues to serve as a
Service Provider through the applicable vesting date.

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e.Value. For purposes of this Policy, “Value” of an Award of a Nonstatutory
Stock Option will equal the value of such Award, calculated in accordance with
the Black Scholes Model in a manner consistent with the Company’s policies and
practices for calculating the value of stock options for purposes of the
Company’s financial statements.

f.No Discretion. No person will have any discretion to select which Outside
Directors will be granted an Initial Award or Annual Awards under this Policy or
to determine the number of Shares to be covered by such Initial Award or Annual
Awards, as applicable (except as provided in Sections 5 and 9 below).

g.Change in Control. In the event of a Change in Control, each Outside Director
will fully vest in his or her Initial Award or Annual Awards provided that the
Outside Director continues to serve as a Director through such date.

3.TRAVEL EXPENSES

Each Outside 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 Outside Directors.

5.ADJUSTMENTS

In the event that any dividend or other distribution (whether in the form of
cash, Shares, other securities or other property), recapitalization, stock
split, reverse stock split, reorganization, merger, consolidation, split-up,
spin-off, combination, repurchase, or exchange of Shares or other securities of
the Company or other change in the corporate structure of the Company affecting
the Shares occurs, the Administrator, 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 issuable pursuant to Awards
granted under this Policy.

6.LIMITATIONS

No Outside Director may be issued, in any Fiscal Year, cash payments (including
the fees under Section 1 above) with a value greater than $175,000, provided
that such limit shall be $250,000 with respect to any Outside Director who
serves in the capacity of Non-Executive Chairman of the Board, Lead Director
and/or Audit Committee Chair at any time during the Fiscal Year. No Outside
Director may be granted, in any Fiscal Year, Awards with a grant date Value
greater than $600,000, increased to $900,000 in the Fiscal Year of his or her
initial service as an Outside 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 an Outside Director, will be excluded for
purposes of the limitations under this Section 6.

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7.INDEPENDENT COMPENSATION CONSULTANTS

The Board shall have the authority to retain one or more independent
compensation consultants to provide advice, analysis and recommendations to the
Board in connection with compensation decisions under the Policy.

8.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 an Outside Director for any taxes imposed or
other costs incurred as a result of Section 409A.

9.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 an
Outside Director with respect to compensation that already has been paid or
awarded, unless otherwise mutually agreed between the Outside 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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