Document:

Exhibit 10.38
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Outlook Therapeutics, Inc.
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Non-Employee Director Compensation Policy
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As Amended and Restated Effective October 1, 2020
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Each member of the Board of Directors (the “Board”) who is not also serving as an employee of Outlook Therapeutics, Inc. (the “Company”) or any of its subsidiaries (each such member, an “Eligible Director”) will receive the compensation described in this Non-Employee Director Compensation Policy (the “Policy”) for his or her Board service with respect to the Company’s fiscal year beginning on October 1 (each, a “Fiscal Year”). This Non-Employee Director Compensation Policy will be effective as of October 1, 2020 (the “Effective Date”). An Eligible Director may decline all or any portion of his or her compensation by giving notice to the Company prior to the date cash is to be paid or equity awards are to be granted, as the case may be.  This policy may be amended at any time in the sole discretion of the Board or the Compensation Committee of the Board (the “Committee”).  The terms and conditions of this Policy shall supersede any prior Non-Employee Director Compensation Policy of the Company.
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Annual Cash Compensation
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Eligible Directors are eligible to receive the following annual cash compensation in the amounts and subject to the terms and conditions as set forth below.  If an Eligible Director joins the Board or a committee of the Board at a time other than effective as of the first day of a fiscal quarter, each annual retainer set forth below will be pro-rated based on days served in the applicable fiscal year, with the pro-rated amount paid for the first fiscal quarter in which the Eligible Director provides the service, and regular full quarterly payments thereafter. All annual cash fees are vested upon payment.  In addition, each Eligible Director may elect to receive all of the annual cash compensation set forth below that the Eligible Director is eligible to earn beginning with the Fiscal Year commencing on October 1, 2020 and each subsequent Fiscal Year in the form of stock options granted pursuant to the Company’s 2015 Equity Incentive Plan, as amended (the “Plan”) subject to the terms and conditions as set forth below.
​
	1.
	Annual Board Service Retainers: 

a.All Eligible Directors: $40,000
		b.
	Chairman of the Board Service Retainer (in addition to Annual Board Service Retainer): $30,000

		c.
	Executive Chairman of the Board Service Retainer (in addition to Annual Board Service Retainer): $120,000

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2.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
d.Member of the Executive Committee: $30,000
​

​

Exhibit 10.38
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	3.
	Annual Committee Chair Service Retainer (in lieu of Annual Committee Member Service Retainer):

a.Chairman of the Audit Committee: $15,000
b.Chairman of the Compensation Committee: $10,000
c.Chairman of the Nominating and Corporate Governance Committee: $8,000
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Timing of Elections Regarding Annual Cash Compensation; Time and Form of Payment
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1.Current Eligible Directors: If an Eligible Director’s service as an Eligible Director commences prior to the beginning of a Fiscal Year, then the Eligible Director must make an election, prior to the beginning of such Fiscal Year, to receive the Eligible Director’s (i) Annual Board Service Retainer(s) for such Fiscal Year and (ii) any Annual Committee Member Service Retainer(s) or Annual Committee Chair Service Retainer(s) that is or may become payable for such Fiscal Year (each, a “Retainer”) in the form of either cash or stock options.  The Retainer(s) will be paid or granted as follows:
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		•
	Cash: If the Eligible Director elects to receive the Retainers in cash, (i) the Retainers other than the Executive Chairman of the Board Service Retainer will be paid in the form of cash in arrears in equal installments over the applicable number of fiscal quarters during such Fiscal Year, with payment occurring on the last day of the applicable fiscal quarter (i.e., December 31st, March 31st, June 30th or September 30th), and (ii) the Executive Chairman of the Board Service Retainer will be paid in the form of cash in arrears in equal monthly installments on the last day of each month.

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		•
	Stock Options: If the Eligible Director elects to receive the Retainers in the form of stock options, such stock options will automatically, and without further action by the Board or Committee of the Board, be granted on the third business day in October of such Fiscal Year.  Any such award will vest as follows: (i) 25% will vest on the last day of the first fiscal quarter during such Fiscal Year; and (ii) 25% will vest on the last day of each subsequent fiscal quarter during such Fiscal Year, provided that the Eligible Director is in service as a Director on the first day of the fiscal quarter of the applicable scheduled vesting date.  Notwithstanding the foregoing, if the Eligible Director becomes a chairperson of a Committee, Chairman of the Board or Executive Chairman of the Board after the third business day in October of such Fiscal Year, then the portion (if any) of his or her Annual Committee Chair Service Retainer, Chairman of the Board Service Retainer or Executive Chairman of the Board Service Retainer, as applicable, that is to be granted in the form of stock options will automatically, and without further action by the Board or Committee of the Board,  be granted on the third business day after the date that the Eligible Director becomes a chairperson of a Committee, Chairman of the Board or Executive Chairman of the Board, as applicable.  Any such award will vest in equal installments as follows: (i) the first installment will vest on the last day of the fiscal quarter of the date of grant; and (ii) any remaining installment(s) will vest on the last day of any subsequent fiscal quarter(s) during such Fiscal Year, provided that the Eligible Director is in service as a Director on the first day of the fiscal quarter of the applicable scheduled vesting date. 

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Exhibit 10.38
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2.New Eligible Directors: If an Eligible Director’s service as an Eligible Director commences on or after the beginning of a Fiscal Year, then the Eligible Director must make an election, within 30 days following the commencement of such service, with respect to his or her Retainers that are or may become payable for such Fiscal Year; provided, however, that (a) such election will be applicable only to the portion of the applicable Retainer payable for any fiscal quarter during such Fiscal Year that begins after the date of such election, and (b) no such election may be made if such service commences during the final fiscal quarter of such Fiscal Year.  Each such Retainer will be paid or granted as follows:
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		•
	Cash:  If the Eligible Director elects to receive the Retainers in cash, (i) any Retainers other than the Executive Chairman of the Board Service Retainer with respect to any fiscal quarter during such  Fiscal Year that begins after the date of such election will be paid in the form of cash in arrears in equal installments over the applicable number of fiscal quarters during such Fiscal Year, with payment occurring on the last day of the applicable fiscal quarter, and (ii) the Executive Chairman of the Board Service Retainer with respect to the remaining portion of the Fiscal Year that begins after the date of such election will be paid in the form of cash in arrears in equal monthly installments on the last day of each month.

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		•
	Stock Options:  If the Eligible Director elects to receive the Retainers in the form of stock options, with respect to any fiscal quarter (or month with respect to the Executive Chairman of the Board Service Retainer) during such Fiscal Year that begins after the date of such election, such stock options will automatically, and without further action by the Board or Committee of the Board, be granted on the first business day of the first fiscal quarter that begins after the date of such election.  Any such award will vest in equal installments as follows: (i) the first installment will vest on the last day of the fiscal quarter of the date of grant; and (ii) any remaining installment(s) will vest on the last day of any subsequent fiscal quarter(s) during such Fiscal Year, provided that the Eligible Director is in service as a Director on the first day of the fiscal quarter of the applicable scheduled vesting date.  Notwithstanding the foregoing, if the Eligible Director becomes a chairperson of a Committee, Chairman of the Board or Executive Chairman of the Board after the first business day of the first fiscal quarter that begins after the date of such election, then the portion (if any) of his or her Annual Committee Chair Service Retainer, Chairman of the Board Service Retainer or Executive Chairman of the Board Service Retainer, as applicable, that is to be granted in the form of stock options, will automatically, and without further action by the Board or Committee of the Board, be granted on the third business day after the date that the Eligible Director becomes a chairperson of a Committee, Chairman of the Board or Executive Chairman of the Board, as applicable.  Any such award will vest in equal installments as follows: (i) the first installment will vest on the last day of the fiscal quarter of the date of grant; and (ii) any remaining installment(s) will vest on the last day of any subsequent fiscal quarter(s) during such Fiscal Year, provided that the Eligible Director is in service as a Director on the first day of the fiscal quarter of the applicable scheduled vesting date.

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Terms of Elections Regarding Annual Cash Compensation:

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Exhibit 10.38
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	•
	Once an election is submitted for a Fiscal Year, it will be irrevocable with respect to such Fiscal Year.

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	•
	An Eligible Director must submit a new election for each Fiscal Year.

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	Elections with respect to an Eligible Director’s Retainers must be allocated 100% in either cash or stock options.  An Eligible Director may not make an election to receive cash or stock options with respect to an individual Retainer or any portion thereof.

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Terms of Stock Options Granted Pursuant to Elections:
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	•
	Any stock options granted pursuant to an Eligible Director’s election will be granted under the Plan and will be subject to the terms and conditions of (i) this Policy, (ii) the Plan and (iii) the form stock option grant notices and agreements approved by the Board for the grant of such awards to Non-Employee Directors (as defined in the Plan).

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	•
	The actual number of shares subject to any stock options granted pursuant to this Policy and an Eligible Director’s election to receive the Retainers in the form of stock options will be determined by dividing the Retainers by the “fair value” of a share of the Company’s common stock (“Common Stock”) on the third business day in October of the Fiscal Year in which the stock option is granted, determined using a Black-Scholes or binominal valuation model regularly used by the Company.

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	•
	The shares subject to any stock options granted pursuant to an Eligible Director’s election will vest in installments subject to the Eligible Director’s Continuous Service (as defined in the Plan) through such vesting dates on the terms specified above; provided, however, that all unvested shares subject to such stock options will accelerate and vest in full upon a Change in Control (as defined in the Plan), subject in each case to the Eligible Director’s Continuous Service as of immediately prior to the Change in Control.

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	•
	Any stock options granted pursuant to this Policy will be nonqualified stock options, will have an exercise price per share equal to 100% of the Fair Market Value (as defined in the Plan) of the Common Stock on the date of grant and will have a term of ten years from the date of grant (subject to earlier termination in connection with the Eligible Director’s termination of service or certain corporate transactions and in accordance with the terms of the Plan).  Any such stock option will become exercisable when vested and the vested portion of any such stock option will remain exercisable in accordance with the stock option grant notice and agreement governing the stock option.  

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Equity Compensation
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The equity compensation set forth below will be granted under the Plan, and will be nonstatutory stock options, with 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, and a term of ten years from 

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Exhibit 10.38
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the date of grant (subject to earlier termination in connection with a termination of service as provided in the Plan).  
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1.Initial Grant: On the date of the Eligible Director’s initial election to the Board, for each Eligible Director who is first elected to the Board following the Effective Date (or, if such date is not a market trading day, the first market trading day thereafter), the Eligible Director will be automatically, and without further action by the Board or Compensation Committee of the Board, granted a stock option for 25,000 shares.  The shares subject to each such stock option will vest in three equal installments on the first, second and third anniversary of the date of grant (with the first two tranches rounded down and the third tranche rounded up to the nearest share) such that the stock option will be fully vested as of the third anniversary of the date of grant, subject to the Eligible Director’s Continuous Service through such vesting dates, provided, however, that all unvested shares subject to such stock options will accelerate and vest in full upon a Change in Control, subject in each case to the Eligible Director’s Continuous Service as of immediately prior to the Change in Control.
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2.Annual Grant: On the date of each annual stockholders meeting of the Company held after the Effective Date, each Eligible Director who continues to serve as a non-employee member of the Board following such stockholders meeting will be automatically, and without further action by the Board or Compensation Committee of the Board, granted a stock option to purchase Common Stock with an aggregate “fair value” of $35,000 as of such date, determined using a Black-Scholes or binominal valuation model regularly used by the Company.  The shares subject to each such stock option will vest on the first anniversary of the date of grant, provided that such shares will in any case be fully vested on the date of Company’s next annual stockholders meeting, subject in each case to the Eligible Director’s Continuous Service through such vesting date, provided, however, that all unvested shares subject to such stock options will accelerate and vest in full upon a Change in Control, subject in each case to the Eligible Director’s Continuous Service as of immediately prior to the Change in Control.

​EX-10.1

 Exhibit 10.1 

LEASE TERMINATION AGREEMENT 

This Lease Termination Agreement (this “Agreement”) is executed as of December 23, 2022, between ARE-SD REGION
NO. 34, LLC, a Delaware limited liability company (“Landlord”), and OTONOMY, INC., a Delaware corporation (“Tenant”), for the purpose of terminating the Lease Agreement between Landlord and
Tenant dated May 11, 2015 (the “Lease”). Capitalized terms used but not defined herein shall have the meanings assigned to them in the Lease. 

RECITALS: 

Pursuant to the terms of the Lease, Tenant is currently leasing the entire 3-story Building, including premises in the subterranean parking
garage located at 4796 Executive Drive, San Diego, California 92121, consisting of approximately 61,755 rentable square feet of space, which leased premises is more particularly described in the Lease (the “Premises”).
Landlord and Tenant desire to terminate the obligations, liabilities and benefits under the Lease to the extent hereinafter provided. 

AGREEMENTS: 
 For
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Landlord and Tenant hereby agree as follows: 
 1. Termination
of Lease. Landlord and Tenant hereby terminate the Lease effective as of 11:59 p.m., December 31, 2022 (the “Termination Date”). 

2. Termination Payment. Tenant shall pay to Landlord on or before January 1, 2023, the sum of $4,440,732.90. 

3. Security Deposit. Landlord is permitted to keep the Security Deposit in the amount of $694,743.75. 

4. Contingency Payment. If Landlord re-lets the entire Premises and begins collecting rent in an amount equal to or greater than the Base Rent
on or before April 5, 2023, Landlord shall refund the Termination Payment to Tenant as a contingency payment (“Contingency Payment”) in an amount to be determined by the date of Landlord’s receipt of the first rent
payment (“Re-Let Date”), as follows: 
  

					
	 Re-Let Date
	  	Contingency Payment	 
	 January 1, 2023, or earlier
	  	$	4,440,732.90	 
	 January 2, 2023 to April 5, 2023
	  	$	3,000,000.00	 

 5. Surrender of the Premises. On or before January 13, 2023, Tenant shall vacate and surrender the
Premises, leaving the Premises in the same condition as of the walk-through of the Premises performed on December 14, 2022, subject to removal of all of Tenant’s remaining property (which property is subject to Section 6 of this
Agreement) without material damage to the Premises. Tenant shall decommission the Premises in accordance with the plan by Zoubek Consulting, LLC, as submitted to facility manager Noble Aeschbacher on December 20, 2022, and 

  
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 shall deliver to Landlord evidence that the approved plan has been completed to the reasonable satisfaction
of Landlord and its environmental consultant by January 31, 2023. If Tenant fails to vacate the Premises in accordance with this Section 5, then Tenant shall be a holdover tenant with respect thereto pursuant to Section 8 of the Lease
(and shall pay to Landlord the holdover rent with respect to the Premises as set forth in such Section 8). 
 6. Surrender of Furniture.
Notwithstanding anything to the contrary in the Lease, Tenant shall surrender all office and conference room furniture, desks, work-stations and furniture in seating areas of the Premises to Landlord upon termination of the Lease. 

7. Access to the Premises. Notwithstanding anything to the contrary in the Lease, from and after the Termination Date, Landlord and its
employees, agents, contractors, and representatives shall have the right to enter the Premises for any purpose, including, without limitation, to show the Premises to prospective tenants and to permit inspection of the Premises by space planners,
contractors and other parties in connection with improvements which may be constructed in the Premises. 
 8. Release of Landlord. Upon the
termination of the Lease as set forth above, except to the extent caused by the gross negligence or intentional misconduct of Landlord or Landlord’s Released Parties (hereinafter defined), Tenant (for itself and any other party that may claim
through or under Tenant) agrees that, without further acts, Landlord, together with Landlord’s employees, agents, representatives, asset manager, consultants, attorneys, fiduciaries, servants, officers, directors, partners, shareholders,
members, predecessors, successors and assigns (collectively, the “Landlord Released Parties”), shall be released and forever discharged from any and all actions, causes of action, judgments, executions, suits, investigations,
debts, claims, demands, liabilities, obligations, damages, and expenses of any and every character that arise out of or in any way connected to the Lease, or any of the transactions associated therewith (collectively, the “Released
Matters”), including, without limitation, all Released Matters that are known or unknown, direct and/or indirect, existing at law or in equity, of whatsoever kind or nature, whether heretofore or hereafter accruing, for or because of
any matter or thing done, omitted, or suffered to be done by any of the Landlord Released Parties prior to and including the date of actual execution of this Agreement by Landlord and Tenant, INCLUDING ANY AND ALL CLAIMS BASED IN WHOLE OR IN PART
ON THE NEGLIGENCE OR STRICT LIABILITY OF SUCH LANDLORD RELEASED PARTY. Tenant acknowledges and agrees that Landlord shall have no liability whatsoever for any acts or omissions of any previous owner of the Building. 

9. Release of Tenant. Upon the termination of the Lease as set forth above, Landlord (for itself and any other party that may claim through or
under Landlord) agrees that, without further acts, Tenant, together with Tenant’s employees, agents, representatives, consultants, attorneys, fiduciaries, servants, officers, directors, partners, shareholders, predecessors, successors and
assigns (collectively, the “Tenant Released Parties”), shall be released and forever discharged from all Released Matters, including, without limitation, all Released Matters that are known or unknown, direct and/or indirect,
existing at law or in equity, of whatsoever kind or nature, whether heretofore or hereafter accruing, for or because of any matter or thing done, omitted, or suffered to be done by any of the Tenant Released Parties prior to and including the date
of actual execution of this Agreement by Tenant and Landlord, INCLUDING ANY AND ALL CLAIMS BASED 

  
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IN WHOLE OR IN PART ON THE NEGLIGENCE OR STRICT LIABILITY OF SUCH TENANT RELEASED PARTY. Notwithstanding the foregoing release, Tenant shall not be released from (a) any indemnity,
hold harmless, or defense obligation of Tenant under the Lease as to claims by third parties, (b) any obligation under this Agreement, (c) any claim arising from or in connection with any inaccurate representation or warranty made by
Tenant hereunder, or (d) any default by Tenant hereunder. 
 10. California Civil Code Section 1542. In giving the releases above,
each of the parties expressly waives the provisions of California Civil Code Section 1542, which provides as follows: 
 A general
release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release that, if known by him or her, would have materially affected his or her settlement with
the debtor or released party. 
 11. Mechanic’s Lien. Tenant hereby represents and warrants that Tenant has not engaged anyone who has
provided materials or labor in connection with the Premises that would give rise to the filing of a lien against the Premises or that such parties have been paid in full. 

12. No Transfer. Tenant represents and warrants to Landlord that Tenant is the owner and holder of the leasehold estate of the
“Tenant” under the Lease. Landlord and Tenant represent and warrant to each other that each has not heretofore assigned or transferred, or purported to assign or transfer, to any person, firm or corporation whatsoever, any claim, debt,
liability, demand, obligation, cost, attorneys’ fees, expense, action or cause of action herein released. 
 13. Attorneys’ Fees. If
any legal action or proceeding is brought by any party against the other arising out of this Agreement, the prevailing party shall be entitled to recover reasonable attorneys’ fees and costs incurred in such action (including, without
limitation, all costs of appeal), and such amount shall be included in any judgment rendered in such proceeding. 
 14. Entire Agreement. This
Agreement contains all of the agreements of the parties hereto with respect to the subject matter hereof and no prior agreement, understanding, or representation pertaining to any such matter shall be effective for any purpose. No provision of this
Agreement may be amended except by an express agreement in writing signed by the parties hereto or their respective successors-in-interest. 
 15.
Counterparts. This Agreement may be executed in multiple counterparts, each of which shall constitute an original, but all of which shall constitute one document. This Agreement may be executed in multiple counterparts, each of which
shall be deemed to be an original, and all of such counterparts shall constitute one document. To facilitate execution of this Agreement, the parties hereto may execute and exchange, by telephone facsimile or electronically, counterparts of the
signature pages. Signature pages may be detached from the counterparts and attached to a single copy of this Agreement to physically form one document. 

16. Invalidity. If any covenant, condition, or provision herein contained is held to be invalid by final judgment of any court of competent
jurisdiction, the invalidity of such covenant, condition, or provision shall not in any way affect any other covenant, condition, or provision herein contained. 

  
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 17. Tenant’s Authority. Tenant represents and warrants to Landlord as follows: Tenant is
a duly organized and existing corporation under the laws of the State of Delaware; Tenant has full right and authority to enter into this Agreement; Tenant’s execution of this Agreement does not result in the violation of any law or the breach
of any agreement to which Tenant may be bound; each person signing on behalf of Tenant was and continues to be authorized to do so; and upon execution by Tenant and Landlord, this Agreement shall be an enforceable agreement binding upon Tenant. 

18. Binding Effect; Controlling Agreement; Governing Law. The terms and provisions hereof shall be binding upon and inure to the benefit of the
parties hereto, their transferees, representatives, successors and assigns. In the event of a conflict between the terms and provisions of this Agreement and those contained in the Lease, the terms and provisions of this Agreement shall control.
This Agreement and the rights and duties of the parties hereto shall be controlled by and interpreted in accordance with the laws of the State in which the Premises are located. 

19. Time is of the Essence. Time is of the essence with respect to each and every provision of this Agreement. 

[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK] 

  
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 Executed as of the date first written above. 

 

					
	LANDLORD:	 	ARE-SD REGION NO. 33, LLC, a Delaware limited liability
company
			
		 	By:	 	 /s/ Gary Dean

		 	Name:	 	Gary Dean
		 	Title:	 	Executive Vice President Legal Affairs
		
	TENANT:	 	OTONOMY, INC., a Delaware corporation
			
		 	By:	 	 /s/ Paul E. Cayer

		 	Name:	 	Paul E. Cayer
		 	Title:	 	President, Secretary, Chief Financial and Business Officer

  
 5

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