Document:

reta-ex1037_1164.htm

Exhibit 10.37

REATA PHARMACEUTICALS, INC.

FIFTH AMENDED AND RESTATED NON-EMPLOYEE DIRECTOR COMPENSATION POLICY

 

Each member of the Board of Directors (the “Board”) who is not also serving as an employee of or consultant to Reata Pharmaceuticals, Inc. (“Reata”) or any of its subsidiaries (each such member, an “Eligible Director”) will receive the compensation described in this Fifth Amended and Restated Non-Employee Director Compensation Policy (the “Policy”) for his or her Board service or service on a committee of the Board (“Committee”). This Policy is effective as of December 2, 2020 (the “Effective Date”) and may be amended at any time in the sole discretion of the Board or the Compensation Committee of the Board.

 

Annual Cash Compensation

 

The annual cash compensation amount set forth below is payable in equal quarterly installments, payable after each regular quarterly Board meeting, beginning with the Board meeting held on September 2, 2020 (collectively, the “Annual Cash Fees”). All Annual Cash Fees are vested upon payment.

 

	
 
	
1.
	
Annual Board Service Retainer:

	
 
	
a.
	
All Eligible Directors: $45,000

	
 
	
b.
	
Lead Independent Director Service Retainer (in addition to Annual Board Service Retainer): $25,000

	
 
	
2.
	
Annual Committee Member Service Retainer:

	
 
	
a.
	
Member of the Audit Committee: $10,000

	
 
	
b.
	
Member of the Compensation Committee: $7,500

	
 
	
c.
	
Member of the Nominating and Corporate Governance Committee: $5,000

	
 
	
3.
	
Annual Committee Chair Service Retainer (in addition to Annual Committee Member Service Retainer):

	
 
	
a.
	
Chairman of the Audit Committee: $25,000

	
 
	
b.
	
Chairman of the Compensation Committee: $7,500

	
 
	
c.
	
Chairman of the Nominating and Corporate Governance Committee: $5,000

Beginning with the second regular Board meeting held after the 2021 annual stockholder meeting, the Annual Cash Fees shall be as follows:

 

 

 

	
 
	
1.
	
Annual Board Service Retainer:

	
 
	
a.
	
All Eligible Directors: $50,000

	
 
	
b.
	
Lead Independent Director Service Retainer (in addition to Annual Board Service    Retainer): $25,000

	
 
	
2.
	
Annual Committee Member Service Retainer:

	
 
	
a.
	
Member of the Audit Committee: $10,000

	
 
	
b.
	
Member of the Compensation Committee: $7,500

	
 
	
c.
	
Member of the Nominating and Corporate Governance Committee: $5,000

	
 
	
3.
	
Annual Committee Chair Service Retainer (in addition to Annual Committee Member Service Retainer):

	
 
	
d.
	
Chairman of the Audit Committee: $25,000

	
 
	
e.
	
Chairman of the Compensation Committee: $7,500

	
 
	
f.
	
Chairman of the Nominating and Corporate Governance Committee: $5,000

 

Equity Compensation

 

The equity compensation set forth below will be granted under the Reata’s Second Amended and Restated Long Term Incentive Plan (the “Plan”). All stock options granted under this Policy will be nonstatutory stock options to purchase shares of Class A common stock of Reata (“Common Stock”), with (a) an exercise price per share equal to 100% of the Fair Market Value (as defined in the Plan) of the underlying Common Stock on the date of grant, which shall be the closing price on the date of grant (or, if not a business day, the first business day thereafter) of a share of Reata’s Class A common stock on the Nasdaq Global Market, and (b) a term of ten years from the date of grant. The other terms and provisions of the stock options, including vesting on termination of service, Disability (as defined in the form stock option agreement), death and Change in Control (as defined in the Plan) will be in conformity with the Plan and the form of stock option agreement and notice of grant previously approved by the Board for members of the Board, as the Plan or any such form may be amended from time to time. The terms and provisions of the stock options as set forth in this paragraph are referred to herein as the “Terms”. 

 

	
 
	
1.
	
Initial Grant: On the date of the Eligible Director’s initial election or appointment to the Board (or, if such date is not a market trading day, the first market trading day thereafter), the Eligible Director will automatically, and without further action by the Board or Compensation Committee of the Board, be granted a stock option to purchase 10,000  shares of Common Stock if the date of the grant is prior to the date of the 2021 annual stockholder meeting, and 7,500 shares of Common Stock if the date of grant is on or after the date of the 2021 annual stockholder meeting (the “Initial Grant”). The stock option 

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constituting each Initial Grant will vest in equal annual installments over a three-year period so that the Initial Grant will become fully vested on the third anniversary of the date of grant, subject to the Terms.

 

	
 
	
2.
	
Annual Grant: On the date of the first regular Board meeting held after each Reata annual stockholder meeting, for each Eligible Director who continues to serve as a non-employee member of the Board (or who is first elected to the Board at such annual stockholder meeting), the Eligible Director will automatically, and without further action by the Board or Compensation Committee of the Board, be granted a stock option to purchase 5,000 shares of Common Stock (the “Annual Grant”). In addition, each Eligible Director who is first elected or appointed to the Board other than at the first regular Board meeting held after a Reata annual stockholder meeting will automatically, and without further action by the Board or Compensation Committee of the Board, be granted an Annual Grant on the date of the Eligible Director’s initial election or appointment to the Board, prorated by multiplying 5,000 by a fraction (1) the numerator of which is the number of subsequent regular Board meetings remaining until (and including) the first regular Board meeting held after Reata’s next annual stockholder meeting and (2) the denominator of which is four. Subject to the Terms, the stock options constituting the Annual Grant will vest in the number of equal quarterly installments that is the number of regular quarterly Board meetings scheduled to be held following the date of grant to and including Reata’s regular Board meeting scheduled to be held after Reata’s next annual stockholder meeting following the date of grant. An example of the above proration procedures follows: if an Eligible Director is appointed to the Board on January 5, 2021, then the Eligible Director would receive an Annual Grant of 2,500 shares on January 5, 2021,  which Annual Grant would vest 50% on April 5, 2021, and 50% on July 5, 2021, subject to the Terms;  the new Eligible Director and all other Eligible Directors would receive an Annual Grant of 5,000 shares on the date of the June regular Board meeting (held after the June annual stockholder meeting) following the January date of grant, which would vest in four equal quarterly installments, subject to the Terms. 

 

Election to Receive Stock Options in Lieu of Cash Compensation

 

An Eligible Director may elect to receive a grant of stock options pursuant to the Equity Compensation provisions of this Policy in lieu of receiving future cash compensation payments, or any portion thereof, of the Annual Board Service Retainer, the Lead Independent Director Service Retainer, the Annual Committee Member Service Retainer, and/or the Annual Committee Chair Service Retainer (the “Election Grant”). This election to receive an Election Grant may be made by an Eligible Director  on the date of Reata’s first regular Board meeting held after an annual stockholder meeting by submitting an executed election form (the “Election Form”) to Reata’s chief legal counsel in the form and pursuant to procedures established by the Company.  The stock options granted pursuant to an Election Grant will be granted on the day of Reata’s first regular Board meeting held after each annual stockholder meeting, will have a Black-Scholes value equal to the annual amount of the applicable Retainer, and will otherwise be subject to the Terms. In addition, each Eligible Director who is first elected or appointed to the Board following the Effective Date and not at an annual stockholder meeting may execute an 

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Election Form on a date other than the date of Reata’s first regular Board meeting held after an annual stockholder meeting, in which case, in addition to receiving a grant of stock options pursuant to an Election Grant on the day of Reata’s first regular Board meeting held after each annual stockholder meeting, such Eligible Director will also be granted on the date of execution of the Election Form a prorated Election Grant with a Black-Scholes value equal to the Black-Scholes value of the applicable Retainer multiplied by a fraction (1) the numerator of which is the number of subsequent regular Board meetings that will be held after the date of grant to, and including, the first regular Board meeting held after Reata’s next annual stockholder meeting, and (2) the denominator of which is 4, and will otherwise be subject to the Terms. The stock options constituting Election Grants will vest in the number of equal quarterly installments that is the number of regular quarterly Board meetings scheduled to be held following the date of grant to and including Reata’s regular Board meeting scheduled to be held after Reata’s next annual stockholder meeting following the date of grant, subject to the Terms. Any election to receive an Election Grant will be irrevocable until the third anniversary of such election. Once an Election Form has been executed and delivered to Reata, no additional Election Form is required to be executed, unless (1) an Eligible Director has revoked an election to receive an Election Grant and thereafter determines to again receive an Election Grant or (2) an Eligible Director becomes entitled to receive a Retainer which the Eligible Director was not entitled to receive at the time of the execution of an Election Form. If the amount of any Retainer is changed, no additional Election Form is required to be executed if it included an election as to that type of Retainer.

 

Fractions

 

Stock options granted pursuant to an Election Grant shall be for a number of whole shares of Common Stock. Any fractional share of Common Stock shall be rounded down to the nearest whole share of Common Stock. Fractions of shares of Common Stock subject to a stock option shall not vest on a vesting date of an Initial Grant, an Annual Grant, an Interim Annual Grant, or an Election Grant, and the shares of Common Stock that do vest on a vesting date shall be rounded down to the nearest whole share of Common Stock; provided, however, that such fractions of shares of Common Stock shall be added to the number of shares of Common Stock that vest on the final vesting date or that otherwise vest due to the vesting acceleration (with any resulting fraction of a share of Common Stock being rounded down to the nearest whole share of Common Stock).

 

Waiver

 

An Eligible Director may, at any time and from time to time, waive receipt of any or all cash or equity compensation payable to such Eligible Director pursuant to the Policy (a “Waiver”). After a Waiver, the Eligible Director may, at any time and from time to time, withdraw the Waiver and begin receiving future cash and equity compensation pursuant to the Policy. Any Waiver or withdrawal of a Waiver shall be made by providing written notice to an officer of Reata.

 

Equity Value Cap

 

The number of stock options that would otherwise be granted pursuant to an Initial Grant, an Annual Grant, an Interim Grant, or an Election Grant shall be reduced, including if necessary to 

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zero, in order to comply with Section 5 of the Plan (such number of stock options not granted pursuant to this sentence being referred to as the “Reduced Options”). If two or more types of grants would otherwise be made simultaneously pursuant to the provisions of the Policy and the number of stock options permitted to be granted must be reduced in order to comply with Section 5 of the Plan, then, in order to allocate the Reduced Options to the applicable grant, an Interim Grant, an Annual Grant, and an Election Grant will be reduced, in that order, before an Initial Grant is reduced; and an Annual Grant will be reduced before an Election Grant is reduced.

 

Prior Policies

 

Cash payments and equity grants made pursuant to the terms and provisions of any prior version of this Policy shall be governed by the terms and provisions of such prior version of this Policy.

5reta-ex1038_1163.htm

Exhibit 10.38

 

Date

 

	
	
Notice of Grant of Restricted Stock Units

(Directors/Consultants)

 

Award Details

 

	
	
Name :

	
 

	
Address :

	
 

	
 

	
Employee ID :

	
 

	
Award Amount :

	
 

	
Grant ID :

	
 

	
Date of Grant:

	
 

	
Award Type :

	
 

	
Vesting Schedule :

	
 

	
 

	
Expiration Date :

	
 

	
Deadline to Accept : 30 days from grant notification

 

Award Vesting Summary

The Forfeiture Restrictions on the Restricted Stock Units granted pursuant to the Restricted Stock Unit Agreement (the “Agreement”) will expire and the Restricted Stock Units will vest and become nonforfeitable as set in Section 6 of the Agreement, as detailed in the table above under “Vesting Schedule”; provided, however, that the vesting of the Restricted Stock Units shall be subject to the standard methodology for handling fractions of vested Restricted Stock Units that is applied by the Company’s third-party Restricted Stock Unit administrator; provided further, however, that, except as otherwise provided in the Agreement, such unvested Restricted Stock Units will become vested Restricted Stock Units on such dates only if you remain a director or employee of or a service provider to the Company or its Subsidiaries continuously from the Date of Grant through the applicable vesting date.

Notwithstanding the foregoing, in the event of (i) a Change in Control, (ii) a separation from service by reason of death, or (iii) a separation of service by reason of Disability (as defined in the Agreement), any Restricted Stock Units that are unvested on the date of such event shall become vested Restricted Stock Units on such date.

 

 

The Restricted Stock Units shall not be settled with a fraction of a share of Stock, and, on the expiration date of the Restricted Stock Units, any fraction of a share of Stock, unless otherwise determined by the Committee, shall be canceled and terminated without consideration.

Settlement Event

Stock will become issuable (which Stock will be fully transferrable when issued) and Dividend Equivalents payable to you on the date of vesting of the Restricted Stock Units, which is referred to as the Settlement Event. Absent a provision in the Agreement or the Plan to the contrary, Stock and Dividend Equivalents with respect to vested Restricted Stock Units will be delivered to you no later than 45 days following the Settlement Event. 

Online Grant Acceptance

By your acceptance of the Restricted Stock Units, you hereby acknowledge your receipt of the Restricted Stock Units granted on the Date of Grant indicated above, which have been issued to you under the terms and conditions of this Notice of Grant, the Second Amended and Restated  Long Term Incentive Plan (the ”Plan”) and the Agreement, including the vesting and risk of forfeiture provisions set forth therein. Capitalized terms used but not defined in this Notice of Grant shall have the meanings set forth in the Plan or the Agreement.

By your acceptance of the Restricted Stock Units, you agree to the following provisions of this paragraph. You acknowledge and agree that (a) you are not relying upon any written or oral statement or representation of the Company, its affiliates, or any of their respective employees, directors, officers, attorneys or agents (the “Company Parties”) regarding the tax effects associated with your acceptance of the Restricted Stock Units and your receipt and holding of the Restricted Stock Units, and (b) in deciding to accept the Restricted Stock Units, you are relying on your own judgment and the judgment of the professionals of your choice with whom you have consulted.  You hereby release, acquit and forever discharge the Company Parties from all actions, causes of actions, suits, debts, obligations, liabilities, claims, damages, losses, costs and expenses of any nature whatsoever, known or unknown, on account of, arising out of, or in any way related to the tax effects associated with your acceptance of the Restricted Stock Units and your receipt and holding of the Restricted Stock Units. You consent to receive documents from the Company and any plan administrator by means of electronic delivery, provided that such delivery complies with applicable law, including, without limitation, documents pursuant or relating to any equity award granted to you under the Plan or any other current or future equity or other benefit plan of the Company (collectively, a “Company Plan”).  This consent shall be effective for the entire time that you are a participant in a Company Plan.

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