exv10w2



 






Exhibit 10.2




Superconductor Technologies Inc.




Compensation Policy for Non-Employee Directors




(March 18, 2005)




I. Introduction




     Similar to its philosophy for the compensation of executive officers, the Board of Directors
(the “Board”) of Superconductor Technologies Inc. (the “Company”) believes that the
Company’s future success depends in part on its ability to attract and retain highly qualified
individuals to serve on the Board. With this goal in mind, the Board periodically reviews the
compensation arrangements for non-employee directors. Based on those reviews and the consideration
of director compensation practices at comparable companies, the Board has from time to time
approved certain compensation policies and practices which it believes are necessary to maintain a
competitive compensation package for its non-employee directors. The Board has further concluded
that it would be appropriate and useful to consolidate and formalize those policies and practices
in one comprehensive document.



II. Scope of Policy




     This policy governs the compensation of non-employee directors of the Company. For purposes
of this policy, a “non-employee director” means a director who (i) is not employed as an
officer or other employee of the Company or any of its subsidiaries and (ii) does not receive more
than $60,000 in compensation, directly or indirectly, in the relevant year from the Company or any
of its subsidiaries for services as a consultant or in any other capacity other than as a director.



III. Board Fees.



     A. Annual Retainer. Non-employee directors will receive an annual retainer of $10,000
per year provided the director attends at least 75% of the regular meetings of the Board.
Attendance may be in person or by telephone, but attendance in person is encouraged. The Company
will pay the retainer in quarterly installments of $2,500. Any non-employee Chairman of the Board
will receive an annual retainer of $20,000 per year.



     B. Meeting Fee. Non-employee directors (other than the Chairman of the Board) will
receive a $2,000 meeting fee for attendance at each meeting of the Board. The Chairman of the
Board will receive a $4,000 meeting fee for attendance at each meeting of the Board. Directors
will receive meetings fees for attendance in person or, where necessary, by telephone. However, no
meeting fees will be paid for participation in meetings of the Board which are held entirely by
telephone, except as otherwise agreed by the Board. The Company will pay meeting fees promptly
following each meeting.



 









 





     C. Committee Service. The Chairman of the Audit Committee will receive an annual
retainer of $5,000 per year. The Chairman of the Compensation Committee and the Chairman of the
Governance and Nominating will each receive an annual retainer of $3,000 per year. The Company
will pay the annual retainers in quarterly installments. There will be additional compensation for
service on committees of the Board which will consist of stock option awards as specified below in
Section IV(C).



IV. Stock Option Awards




     A. Initial Grants. Non-employee directors will receive a stock option grant of 25,000
shares of common stock upon their initial election or appointment to the Board. The exercise price
will be the closing price of the common stock on the date of their appointment or election, as
applicable. These options will vest in four equal annual installments with the first 25% vesting
on the twelve month anniversary of the date of grant.



     B. Annual Service Grants. Non-employee directors (other than the Chairman of the
Board) who have served for at least six months will receive an annual stock option grant of 15,000
shares of common stock on the date of each annual meeting of stockholders at which they are
re-elected. The Chairman of the Board will receive an annual stock option grant of 20,000 shares
of common stock on the same terms. The exercise price for the annual option grants will be the
closing price of the common stock on the date of the annual stockholder meeting.



     C. Committee Service Grants. Non-employee directors (other than the committee
chairman) will receive a stock option grant of 2,000 shares of common stock for attendance at each
committee meeting. The chairman of the committee will receive a stock option grant of 4,000 shares
of common stock for attendance at each committee meeting. Committee members may attend meetings in
person or, where necessary, by telephone, and committee service grants will apply to telephonic
committee meetings. The exercise price for the committee service grants will be the closing price
of the common stock on the date of the applicable committee meeting.



     D. Grant Date, Duration and Vesting. Unless otherwise specified in this policy, all
stock options awarded to non-employee directors under this policy will (1) be non-qualified stock
options, (2) have an effective grant date that is the same as the date used to determine the
exercise price, (3) have a duration of ten years from the date of grant, and (4) vest in two equal
annual installments with the first 50% vesting on the twelve month anniversary of the date of
grant.



V. Expense Reimbursement




     Non-employee directors are entitled to reimbursement for all reasonable and customary out of
pocket and travel expenses incurred in the normal course of Company business.



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VI. Administration and Interpretation




     The Board will have complete discretion to resolve any questions relating to the
administration or interpretation of this policy, and their decision will be final and binding on
all non-employee directors. Unless otherwise required by the context, all references in this
policy to a “year” refer to the year between annual stockholder meetings.



VII. Amendments




     The Board has adopted this policy based on the business and economic conditions in existence
at the time of adoption and intends to periodically review the policy in light of changes in those
conditions. Therefore, the Board reserves the right to amend this policy at any time and in any
manner that it deems necessary, appropriate or desirable to reflect the best interests of the
Company. The Board also reserves the right to vary from the policy from time to time without
amending it and shall do so by resolution of the Board.



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